FSA fines Capital One for improper selling of PPI and unfair treatment of customers
LONDON - The UK Financial Services Authority (FSA) has fined Capital One Bank £175,000 for failing to have adequate systems and controls for selling Payment Protection Insurance (PPI), and for failing to treat its customers fairly.
Capital One's primary business is providing credit cards, loans and savings accounts, but it also sells PPI on a non-advised basis to its customers during the card application process or via follow-up calls. The FSA investigation focused purely on credit card PPI sales and found that 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. Affected customers were unable to check what they were covered for or whether the policy was right for them.
Capital One has carried out a full remedial programme to address the systems and controls issues, one part of which ensured that those customers who did not receive the policy document were compensated. The cost of this part, including potential premium refunds and settled claims, is estimated at around £3.0 million, of which £1.1 million related to customers after general insurance regulation started in January 2005.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
EBA seeks to allay Simm divergence concerns
EU validator pledges to co-ordinate with global regulators, but retains ability to act alone “if needed”
FRTB models find salvation in US Basel III proposal
Changes to P&L attribution test and NMRFs make IMA viable for US banks, risk managers say
US blows the floors off Basel III
Barr criticises “downward deviations” in US rule; Bowman rejects “blind adherence” to global standards
Basel III endgame – a timeline
A review of Risk.net’s coverage of the US implementation saga
Leaked EU plans offer extra temporary relief for FRTB models
Risk factors would need only two observations to be modellable. Do changes foreshadow US Basel III?
Iosco chief talks cyber, AI and clearing
Buenaventura discusses Iosco’s role in aiding market resilience and cross-border co-operation
US regulators bid to save FRTB IMA, but it’s no small task
Even if industry wish-list is granted, a 2028 start date might be too soon for model adoption
Hopes rise for cross-product netting under SA-CCR
Banks want rule change in Basel III endgame to lower capital costs of clearing UST repos