Midlands car dealer reprimanded by FSA
The Financial Services Authority have reprimanded a Midlands car dealership after continuing to mis-sell PPI plans to customers despite the intense controversy that has been raging over these payment protection insurance policies.
The Cathedral Motor Company Ltd was given a public reprimand by the Financial Services Authority after it was accused of treating customers unfairly when it came to selling payment protection insurance during the sale of vehicles.
The company has a number of showrooms throughout the Midlands. PPI policies were sold by Cathedral to customers who were purchasing vehicles in order to cover the cost of the finance agreement.
However, according to regulators the company did provide customers with vital information that would have helped them to reach a decision with regards to whether the policy was indeed suitable for them – a practice that a number of lenders and other companies have been accused of.
The FSA also stated that staff that sold PPI for the company were not monitored and therefore it was not known whether they were sticking to regulations or not when they sold this insurance.
One FSA spokesperson said: 'This is the second enforcement action we have taken against a car dealer in connection with PPI sold on vehicle finance agreements and it is important that firms whose primary business is not selling general insurance should adhere to our rules just as much as mainstream brokers. Cathedral's failings, particularly in relation to the monitoring of sales staff, created a risk of consumer detriment.'
FSA officials also warned that this is not the end of action being taken against companies for mis-selling PPI, and there is plenty more to come.
The FSA warned: ' We have taken a number of enforcement actions relating to PPI recently and more cases are in the pipeline.'
Tom Smith
6th April 2007
More Information:
- Loan Penalties and Common Charges
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If you're taking out a sizeable loan, the idea of payment protection may sound like a good idea. Programs such as these protect buyers in the event that they are unable to make payments on the loan due to events such as layoffs or medical emergencies.
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Almost every time you apply for a loan or other form of credit, you are asked if you would like to purchase credit insurance. It my even be automatically added to your contract without you noticing.
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