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Insurer hit with record fine
6:20pm Thursday 15th November 2012 in News
A FINANCIAL services group has been given a record £10.5m fine and faces having to pay up to £33.4m for mis-selling of credit card insurance.
York-based Card Protection Plan, which is one of the city's largest private sector employers, agreed the fine and compensation after a two-year investigation by the Financial Services Authority.
The fine relates to “widespread mis-selling of CPP's two main UK products” between January 2005 and March 2011.
CPP was found to have misled customers by selling them up to £100,000 of credit card insurance, when they were already covered by their banks.
Tracey McDermott, the FSA’s director of enforcement and financial crime, said: “This is a serious case, one that has warranted our joint largest retail conduct fine and generated a sizeable bill for consumer redress.
“While CPP’s products were relatively inexpensive, they were sold widely and CPP encouraged its sales agents to be overly persistent.
"This exposed a very large number of customers to the unacceptable risk of buying products they did not want or need.”
Paul Stobart, CPP chief executive, said: "We are deeply sorry for the errors and wrongdoings of the past and are paying a heavy penalty through what is a large fine.
"The next steps for the team are to complete the transformation programme and to rebuild our business and our reputation in the market."