31st July ‘08 - Loan Company Receives FSA Fine
The Financial Services Authority (FSA) has handed down a £840,000 fine to loans company Liverpool Victoria after it emerged that it has been miss-selling payment protection insurance to many of its customers.
This is not the first time a loan company has received such a fine in 2008. The fine nearly matches one issued earlier this year when the FSA penalised HSBC subsidiary HFC Bank more thank £1 million for similar indiscretions.
At the time the FSA commented, “We are determined to see much better practice in the PPI market. We announced in September that we would be imposing higher fines for serious failings in the retail market including against firms who fall short in relation to PPI. The fine against HFC – the biggest PPI fine to date and first since our September announcement – is evidence of our determination in this area. HFC's failings put its customers at risk of buying unsuitable protection insurance and the financial impact on them of unsuitable advice was likely to be significant.”
This time Margaret Cole, the FSA’s director of enforcement, commented, “If… conversations are unclear or misleading it will be no defence for firms to say that full details were included in paperwork which customers received later.
”Liverpool Victoria is now proposing a comprehensive programme to contact its customers and pay them compensation where appropriate.”
Around 14,500 of the loans company’s customers may now be compensated for their losses.