FSA public censured Cathedral Motor Co for failures relating to its sale of payment protection insurance (PPI)...
The FSA today publicly censured Cathedral Motor Company Ltd for failures relating to its sale of payment protection insurance (PPI) in connection with vehicle finance agreements.
Cathedral is a franchised car dealer with four branches in the Midlands and trading as Arbury. Its primary business is the sale of new and used cars with PPI being sold on an advised basis to cover vehicle finance agreements.
According to the FSA, Cathedral failed to organise and control its regulated business responsibly and effectively. In particular, there was limited or no monitoring of its staff and consequently it could not determine whether its sales staff paid due regard to the needs of customers.
Cathedral did not sufficiently apportion compliance responsibilities among its senior management and did not ensure appropriate training of its staff, the FSA said.
Cathedral also failed to provide customers with certain key documents before conclusion of the sale, creating a risk of consumer detriment.
FSA director for enforcement Margaret Cole said: "The sale of PPI is a priority for us due to the high potential risk for consumers in the way this product is sold and we are determined to see much better practice in this area.
"This is the second enforcement action we have taken against a car dealer in connection with PPI sold on vehicle finance agreements and it is important that firms whose primary business is not selling general insurance should adhere to our rules just as much as mainstream brokers.
"Cathedral's failings, particularly in relation to the monitoring of sales staff, created a risk of consumer detriment. We have taken a number of enforcement actions relating to PPI recently and more cases are in the pipeline."
