FSA fines Alliance and Leicester £7 million over PPI

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FSA fines Alliance and Leicester £7 million over PPI

Alliance and Leicester has been fined £7 million for telephone advice given over the sale of payment protection insurance (PPI).
This is in regard to unsecured personal loans between January 14th 2005 and 31st December 2007.
The Financial Services Authority (FSA) studied processes and phone calls and said customers may have been exposed to an unsuitable insurance policy.
David Bennett, group chief executive of Alliance and Leicester, apologised and said the organisation would write to every customer concerned so consumers need not take action.
He added that it had co-operated fully with the investigation and will also work with the FSA and independent accountants to put right any customer disadvantages.
The FSA said that Alliance and Leicester sold approximately 210,000 PPI policies at an average price of £1,265 but there was a "general failure by advisers" to give customers the details of the costs.
It also found that Alliance and Leicester had sought to sell PPI without properly considering whether customers needed it and did not make it clear enough that the policy was optional.
Margaret Cole, director of enforcement at the FSA, said: "The failings at Alliance and Leicester are the most serious we have found [regarding PPI]."

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