The Financial Services Authority has fined Capital One Bank £175,000 for failing to have adequate systems and controls for selling Payment Protection Insurance and for failing to treat its customers fairly.
From January 2005 to April 2006, Capital One failed to ensure that 50,000 customers received important information about the policy including all exclusions although they did receive a policy summary. Affected customers were unable to check what they were covered for or if the policy was right for them.
Capital One's main business is providing credit cards, loans, and savings accounts from its operations centre in Nottingham. It also sells PPI on a non-advised basis to its credit card and loan customers over the telephone, internet or during the card application process.
FSA Director of Enforcement Margaret Cole says: "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. And consumers should also remember that payment protection insurance on credit cards and loans is almost always optional."
Payment protection insurance: News update: February 2007