SWINTON PUNISHED BY WATCHDOG

The Financial Services Authority found that between December 2006 and March 2008 the firm included PPI on insurance quotes automatically, without first establishing if there was any real demand or need for the cover.

PPI is sold to cover loan repayments if the borrower becomes unable to work through illness or unemployment.

Margaret Cole, FSA director of retail enforcement and financial crime, said: “These were deliberate breaches. Swinton was fully aware it should establish a customer’s need for PPI before recommending it, yet nearly half a million policies were sold to customers who didn’t necessarily require them.

“Swinton’s PPI sales fell a long way short of our requirements and the firm clearly failed to treat its customers fairly.”

Vera Cottrell at Which? said Swinton was let off too lightly. “This is a truly shocking case,” she said. “As an insurance broker, Swinton is supposed to give tailored advice to its customers.

“Instead, it saddled thousands of people with unnecessary and unsuitable insurance. Customers should get an automatic refund. Too few people are likely to claim back £15 or £20, which means Swinton would be getting let off lightly, especially given that the fine imposed by the FSA is just a tenth of the revenue it generated from PPI sales.”

A spokeswoman for Swinton said: “Swinton will be contacting all customers concerned. The company apologises to any customer affected, and has set up a dedicated unit to deal with the PPI cases.”

Borrowers who feel they have been mis-sold PPI should contact their provider. Consumer group Which? has helpful template letters at www.which.co. uk.

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