FSA fines Egg £721,000 for PPI mis-sellingBank criticised for 'serious failings'
11 December 2008
The FSA has fined Egg £721,000 for serious failings in its sales of payment protection insurance (PPI) to credit card customers.
The regulator watchdog found failings in approximately 40% of telephone sales to new and existing credit card customers between January 2005 and December 2007.
When customers said they did not want PPI, Egg directed its sales staff to use 'objection handling' techniques such as over-emphasising the positive features of PPI or telling them they could cancel it later if they did not want it.
In some cases, even when the customer did not consent, PPI was added to their credit card anyway.
FSA Director of Enforcement Margaret Cole said: 'Egg used inappropriate sales techniques to try to persuade customers to buy PPI on their credit card even when they asserted they did not want the cover. It is unacceptable that Egg did not identify the problems with its sales processes despite a series of high profile FSA communications on PPI including earlier fines on other firms. Egg is likely to pay substantial compensation as a result of this exercise.'
Egg will have to write to customers asking them to call a dedicated number if they have any concerns about the policy or the way it was sold to them and compensate them where appropriate. The Bank is expected to pay £1.67 million for every 10% of customers who receive a refund.
Doug Taylor, head of personal finance campaigns at Which? said: 'It’s good to see the FSA hitting firms in the pocket for poor PPI sales practice but more effort needs to go into ensuring that everyone who was mis-sold gets their money back. Egg must ensure that they contact all of their PPI customers, clearly explaining what their rights are and how to take action.
Anyone who has a personal loan or credit card should check whether they have a PPI policy and, if they think it was mis-sold to them, should consider making a complaint'.
Which? has been running a campaign for over a year helping consumers who have been mis-sold PPI make a complaint and get compensation. For a template letter and help and information go to the Which? PPI campaign pages.
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