Liverpool Victoria (LV=) Banking Services (LVBS) has been fined £840,000 by the FSA for mis-leading customers on the sale of Payment Protection Insurance (PPI).
The penalty was imposed for “failings in relation to PPI offered to customers who telephoned LVBS seeking unsecured personal loans between 14 January 2005 and 8 August 2007.”
According to the FSA, when customers rang LVBS to apply for a personal loan, the cost of PPI was added to the quotation automatically. Those customers who realised that they did not have to buy the PPI cover and objected were pressurised into buying it.
The FSA foud that LVBS provided “inadequate information” to its telephone customers about the features, exclusions and limitations of PPI and “often provided information that was unclear, unfair or misleading.” Figures revealed that in 97 sales calls reviewed, the FSA found more than 60 per cent to be non-compliant.
“When customers phone for a quote, it is totally unacceptable for firms to add on the cost of insurance which the customer has not asked for,” said FSA Director of Enforcement Margaret Cole.
“Many customers make their decisions when speaking to sales staff. If those conversations are unclear or misleading it will be no defence for firms to say that full details were included in paperwork which customers received later,” she continued.
“We have made it abundantly clear that firms must ensure their PPI sales processes are up to the required standards and must change their behaviour where necessary.”
Ms Cole described the LVBS sales process as ‘flawed’ and confirmed that the company has stopped all sales of PPI and is proposing a “comprehensive programme to contact its customers and pay them compensation where appropriate”.
Compensation will include the interest paid on the PPI premiums being refunded automatically without the customers having to write to the firm and make a claim.
In a statement, LVBS has apologies to customers for “any past shortcomings in the PPI sales process” and sys it has “proactively launched an appropriate customer redress programme and will be writing to all customers affected.”
“The FSA acknowledges that the LVBS redress proposals are “significant steps towards demonstrating that the firm is treating customers fairly”, said the statement.
If you think you have been mis-sold payment protection insurance, you can make a complaint and get compensation. Just click on the link
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