FSA fines Alliance and Leicester £7m for misselling Loan Protection

Alliance & Leicester has been hit with a record fine by the FSA of £7 million for serious failings in its telephone sales of Loan Payment Protection Insurance.

For three years from January 2005 to December 2007 A&L sold over 200000 Loan PPI policies to customers seeking a personal loan.
The FSA has said that there was a general failure by A&L advisers to give customers details of the true cost of their PPI. In addition A&L sought to find reasons to sell PPI without properly considering what customers needed.

A&L did not make it sufficiently clear that Loan Payment Protection Insurance was optional and it trained its staff to pressurize customers where they queried the inclusion of PPI in their quotation or challenged independent financial advisers recommendations.

These failings resulted in unacceptable levels of non-compliant sales and a high risk of unsuitable sales over the three year period.

The FSA Director of Enforcement, said: “The failings at A&L are the most serious we have found. This is reflected in the record PPI fine. It is very disappointing that after three years of regulation we are still finding serious problems in PPI sales.
Firms cannot rely on paperwork sent out later as an excuse for unclear or misleading statements given on the telephone.”

Simon Burgess of British Insurance, one of the country’s leading independent suppliers of PPI who has been campaigning against misselling for years said
“Although rather belated, we welcome the FSA’s tough stance against anyone who mis-sells PPI.”

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