FSA fines Regency Mortgage for mis-selling PPI |
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Published
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Wed, 06 Sep 2006 12:20
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LONDON - The Regency Mortgage Corporation became the first agency to be fined by the Financial Services Authority for mis-selling payment protection insurance (PPI). Regency was fined £56,000 for selling policies to people who did not require them or could not claim them.
"We have highlighted payment protection insurance as an area of high potential risk to consumers," said Clive Briault of the FSA. "Regency Mortgage Corporation exposed its customers to an unacceptable level of risk." He added that Regency's customers were treated unfairly. In 2005 the FSA had found that a third of firms were mis-selling PPI. The OFT investigated the matter in April 2006. PPI is sold to people so that even if they fall sick or are involved in an accident, their mortgage payments or credit card payments will continue to be made.
Regency, which specializes in the 'Right to Buy' market, was not meticulous enough to collect information that would have ensured it met customers' demands, the FSA said. "Our action sends out a message to firms operating in the payment protection market that they must operate in a way that treats their customers fairly and meets regulatory requirements," Mr Briault said.
The FSA added that it had determined the amount of fine by taking into account the commitments made by Regency. By agreeing to settle early, the Bournemouth-based Regency was allowed a 30 percent discount on the original £80,000 fine.
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