Bank fined more than £1 million for PPI failingsHFC Bank hit with record fine by City watchdog
17 January 2008
HFC Bank has been fined more than £1 million for failings in the way it sold payment protection insurance (PPI).
The Financial Services Authority (FSA) said the £1,085,000 fine was the biggest penalty it had imposed over the sale of PPI.
PPI is sold by many banks and credit card companies when you take out a new loan or card. It's designed to cover your repayments if you become unable to work due to certain illnesses or injuries, or if you lose your job.
Which? is now urging HFC customers to check their paperwork to see whether they were mis-sold, and can make a claim.
The FSA said that between January 2005 and May 2007 HFC’s procedures did not require advisers at its 136 branches to gather sufficient information about customers' circumstances or to take customer information into account when considering whether PPI was suitable.
HFC, a member of the HSBC Group, also didn't require advisers to explain fully why they recommended a particular policy or identify to customers any demands and needs which the policy would not meet.
The FSA said these and other failings meant HFC put its customers at an ‘unacceptable risk’ of being sold PPI when it was not suitable.Between January 2005 and May 2007
HFC, which was trading under the names of Household Bank and Beneficial Finance, sold PPI with 75% of its loans, totalling 163,000 policies.
Which? has long campaigned for justice for the victims of PPI mis-selling.
Which? money expert Teresa Fritz said:'We're pleased to see the FSA is finally beginning to fine companies at a level that will deter this sort of behaviour.
'We urge all HFC customers to check their paperwork to see whether they were sold PPI, and if they were, they should check our payment protection insurance campaign page. This will tell them whether they have grounds for complaint, and give them a template letter they can use to help make a claim.'
HFC Bank said : ‘HFC is committed to ensuring that customers are only recommended products that are suitable for their demands and needs and it is, therefore, disappointing that in certain respects our procedures have been found to fall below the standards expected by the FSA and which we set ourselves.
‘A programme of improvements to HFC Bank's procedures is already well under way in order to ensure that the issues identified by the FSA have been addressed and, moreover, work is under way to ensure that customers have not been disadvantaged.’