Loans.co.uk fined by FSA
Loans.co.uk, one of the big players in the Secured Loans market, has been fined by the Financial Services Authority (FSA) for its dealings with PPI.
Following on from stories last week about the OFT referring PPI to the Competition Commission the FSA has demonstrated the Government means business by fining Loans.co.uk a whopping £450,000. The FSA has said that Loans is one of ten companies it is investigating - so, in all probability - there are likely to be more fines imposed in the coming months.
The FSA said Loans.co.uk failed to treat its customers fairly when selling PPI. The company did not have appropriate systems and controls to minimise the risk of unsuitable sales. The FSA investigation found that the firm failed to gather and record information to show that the policy recommendations it made were suitable and discovered that customers did not receive enough information at the point of recommendation to make an informed decision about the PPI policy being offered.
Margaret Cole, FSA Director of Enforcement, said: “We have highlighted payment protection insurance as an FSA priority due to the potential level of risk to consumers. Loans.co.uk Limited failed to make sure adequate processes were in place to ensure the suitability of its PPI recommendations and treat its customers fairly. We encourage consumers to ask straightforward questions of sales staff when PPI is mentioned to help them to identify whether the product is right for them.”
The PPI debacle is a story that’s obviously going to hang around for at least the next 12 months and there’s obviously going to be a knock on affect for the secured loans industry.
