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January 30, 2007    

FSA fines GE Capital over PPI

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by Brian Turner

In an ongoing investigation by the Financial Services Authority (FSA) over Payment Protection Insurance (PPI), and the possible mis-sale of policies, GE Capital Bank Ltd (GECB) has been fined £610,000.

GE Capital mainly provides finance via branded store cards, credit cards and sales finance - including PPI.

However, the FSA ruled that GE Capital had failed to “have adequate systems and controls for selling insurance” and for failing to “treat its customers fairly”.

A particular complaint was that even when branded store cards were used, customers would receive sales calls from GE Capital even after they had declined PPI at the store.

In 2005 alone, over 850,000 policies which included PPI were sold on its behalf by an estimated 300,000 retail staff.

The FSA is currently in the middle of a two-year investigation into the selling of PPI policies, and is reviewing the procedures of over 200 companies supplying PPI policies.

GE Capital received a 30% discount on its fine by settling early and applying corrective procedures in place.

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