The FSA has slapped a £175,000 fine on Capital One Bank for its failure to have adequate systems and controls for selling Payment Protection Insurance (PPI) insurance and for failing to treat its customers fairly.
The regulator said from January 2005 to April 2006, Capital One failed to ensure that 50,000 customers received important information about the policy including all exclusions although they did receive a policy summary.
Furthermore, affected customers were unable to check what they were covered for or if the policy was right for them.
It is the latest in a string of fines handed out by the City watchdog to firms falling foul of the PPI rules. Just last week the competition commission launched an inquiry into the sector after an Office of Fair Trading (OFT) referral.
FSA director of enforcement Margaret Cole said: "We are determined to see much better practice in PPI. This fine and other recent PPI-related enforcement cases show we will crack down where firms fail to treat their customers fairly in this area.
“It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time.”
