The Financial Services Authority has fined furniture retailer, Land of Leather, £210,000, as part of its ongoing investigation into the mis-selling of lucrative payment protection insurance policies to individuals who might be ineligible to make a claim.
The fine, the first to be issued to a high street retailer, was due to Land of Leather allowing sales staff to sell PPI without adequate training which led to cover being sold inappropriately for nine months until February 2007.
The mis-selling was discovered as a result of a random investigation and not due to complaints from customers. The FSA has issued a warning that other retailers should take heed of the fine and that they are subject to the same sales standards as firms whose principal business is financial services.
Land of Leather’s chief executive, Paul Briant, was also fined £14,000 for failing to properly oversee sales practices.
The FSA has visited hundreds of institutions in the last few years in its crackdown on PPI mis-selling which usually occurs because the customer is too old to claim or is unemployed, self employed or a temporary worker.
The typical claim rate for PPI is around 25 per cent. But of single premium PPI complaints made to the FSA, around 80 per cent are upheld in favour of the consumer, more than for any other form of insurance.
Land of Leather is to write to all customers who bought a policy on or after 1 November 2006 to clarify its policy terms and ask customers to reconsider whether their policy is suitable for them.
The FSA said that the 8,200 people who bought a PPI policy from Land of Leather and did not pay off the amount owing within 12 months would have paid an average of £380 for their policy and might have been mis-sold.
If you do not hear from Land of Leather, contact the Financial Ombudsman Service. Details of how to complain are on the webiste: www.financial-ombudsman.org.uk
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