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Capital One fined over PPI sales | Capital One fined over PPI sales |
(about 1 hour later) | |
Capital One has been fined £175,000 by the Financial Services Authority (FSA) over payment protection insurance (PPI) sales failings. | Capital One has been fined £175,000 by the Financial Services Authority (FSA) over payment protection insurance (PPI) sales failings. |
The fine relates to 50,000 policies sold to customers between January 2005 and April 2006. | The fine relates to 50,000 policies sold to customers between January 2005 and April 2006. |
The FSA said the card provider had failed to provide full information to customers about policy exclusions. | The FSA said the card provider had failed to provide full information to customers about policy exclusions. |
PPI is a form of insurance that covers people in case they cannot pay loans as a result of illness or unemployment. | PPI is a form of insurance that covers people in case they cannot pay loans as a result of illness or unemployment. |
It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time Margaret Cole, FSA | It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time Margaret Cole, FSA |
Capital One is the latest firm to be penalised for sales breaches. Last month, GE Capital bank was fined a record £610,000 for similar failings. | Capital One is the latest firm to be penalised for sales breaches. Last month, GE Capital bank was fined a record £610,000 for similar failings. |
In response, Capital One said it accepted the fine and had amended its sales practices. | In response, Capital One said it accepted the fine and had amended its sales practices. |
Failings | Failings |
Capital One has some four million customers throughout the UK. It is one of the UK's biggest providers of credit cards. | Capital One has some four million customers throughout the UK. It is one of the UK's biggest providers of credit cards. |
The FSA investigation centred on the sale of 335,000 PPI policies relating to credit card debt. | |
Failings pointed out by the FSA included: | Failings pointed out by the FSA included: |
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The card provider said it had taken what the FSA had to say on board. | The card provider said it had taken what the FSA had to say on board. |
"We consistently review our policies and practices and had made a number of significant improvements prior to the FSA's investigation," Sanjiv Yajnik, Capital One Europe chief executive said. | "We consistently review our policies and practices and had made a number of significant improvements prior to the FSA's investigation," Sanjiv Yajnik, Capital One Europe chief executive said. |
"The FSA has recognised that Capital One co-operated fully throughout the investigation," he added. | "The FSA has recognised that Capital One co-operated fully throughout the investigation," he added. |
Investigation | Investigation |
The PPI industry is worth an estimated £5.5bn a year. | The PPI industry is worth an estimated £5.5bn a year. |
Watchdogs have been carrying out a widespread investigation into the industry. In January, the BBC learned that 10 banks and lenders would face fines following the inquiry. | Watchdogs have been carrying out a widespread investigation into the industry. In January, the BBC learned that 10 banks and lenders would face fines following the inquiry. |
"This fine and other recent PPI-related enforcement cases show we will crack down where firms fail to treat their customers fairly in this area," Margaret Cole, FSA director of enforcement, said. | "This fine and other recent PPI-related enforcement cases show we will crack down where firms fail to treat their customers fairly in this area," Margaret Cole, FSA director of enforcement, said. |
"It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time," Ms Cole added. | "It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time," Ms Cole added. |
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