The Financial Services Authority (FSA) has handed out the most significant punishment to date during its investigation into mis-sold loan insurance . HFC Bank, HSBC’s consumer lending unit, has been fined over £1 million after it failed to show that customers who purchased payment protection insurance were eligible to make a claim. HFC Bank has agreed to pay the fine, though is unlikely to be the only bank facing such a hefty fine.
The FSA is currently investigating a further four cases of mis-sold payment protection insurance . Amongst the companies fined in 2007 were Capital One. The scandalous profit margins banks make on payment protection insurance have been thrust into the media spotlight recently, with margins as high as 70 per cent on PPI sales. PPI is sold with loans, credit cards and mortgages, and covers repayments in instances where people are unable to work as a result of illness, redundancy or an accident .
FSA Steps Up Punishments Over Loan Insurance
FSA Steps Up Punishments Over Loan Insurance
Fri, 25 Jan 2008
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