GE Capital Bank (GECB) has been fined £610,000 by the FSA for failing to have adequate systems and controls for selling insurance which includes payment protection insurance (PPI) and for failing to treat its customers fairly.
The charges relate to GE Capital Bank's provision of credit finance through store cards, credit cards and sales finance.
More high-profile banks and lenders are expected to be named by the FSA in its current crackdown on PPI, with fines possibly running into the millions.
GECB breached the FSA's guidelines in a number of areas:
• Sales: the firm failed where appropriate to review, amend and then operate its sale procedures to ensure that all customers received adequate information about the policy before they made a decision on whether to take insurance.
• Training: in light of evidence that sales staff were not complying consistently with its sales procedures, the firm failed to amend its training procedures.
• Monitoring and management information: the firm failed where appropriate to ensure its monitoring procedures were effective and failed to act in response to management information which was collected and available.
• Customers: the firm failed to implement any procedure to contact customers to remedy the non-compliant sales identified by its monitoring procedures.
• Compliance: the firm failed to resource the compliance function adequately.
In 2005 alone, over 850,000 policies which included PPI were sold on GECB's behalf.
FSA director of enforcement Margaret Cole said: "Millions of people take out store cards every year. They need to know that PPI is almost always optional and should consider whether they need it before signing up.
"Our focus on payment protection insurance will remain very high this year. We are determined to see significantly better practice in PPI sales and will crack down where firms fail to treat their customers fairly."
GECB's early settlement and commitment to remedial action earned the company a 30% discount on the original fine of £870,000.
