Regulator said broker’s ‘aggressive sales strategy’ failed to treat customers fairly
The Financial Conduct Authority (FCA) has fined Swinton £7,380,400 for mis-selling monthly add-on insurance policies.
The FCA found that the high-street broker did not provide enough information to customers who were sold personal accident, home emergency and motor breakdown covers between April 2010 and April 2012 and blamed the company’s “aggressive sales strategy” in its telephone sales of monthly add-on products.
The FCA also criticised Swinton’s sales call monitoring processes, saying that staff did not provide enough information about the terms of the policy, including the conditions and limitations, and cancellation process.
In a statement, the FCA said: “The nature of the failings, particularly poor sales scripts, meant that every sale could have been a mis-sale.”
Profits before customers
FCA director of enforcement and financial crime Tracy McDermott said: “Swinton failed its customers. When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit.”
The fine imposed by the FCA was reduced from £10,543,500, as Swinton settled at an early stage in the FCA’s investigation and also took part in an FCA study examining how letters offering compensation to customers could be written to ensure a greater response.
FCA chief executive Martin Wheatley added: “I recently told the insurance industry that we were taking a strong interest in the area of add-ons, and our first competition study will take a far-sighted view of the impact of current practice on consumers in this market.”
Swinton apologises
Swinton has released a statement in response to the FCA fine, apologising to customers and adding that the company “acknowledges the shortcomings in its sales practices during this period.”
Swinton chief executive Christophe Bardet said: “We apologise for these shortcomings. They were not compatible with the proud history of Swinton, which since 1957 has been providing peace of mind to people through insurance cover.”
Bardet was appointed in December 2011 and instigated a full review of the business.
Between July and August 2012, Swinton contacted more than 650,000 customers who might have been affected and £1.9m has been refunded.
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