FSA fines GE Capital Bank

LONDON – The Financial Services Authority (FSA) has fined GE Capital Bank (GECB) £610,000 for failing to have adequate systems and controls for selling insurance including Payment Protection Insurance (PPI), and for failing to treat its customers fairly.

GECB's main business is providing credit finance through store cards, credit cards and sales finance. The store cards are usually branded in the name of the retailers (who are appointed representatives of GECB) and the insurance is offered to customers at the till when they are applying for a store card. If not bought at the till, customers are contacted later by GECB's telesales staff.

The FSA found that GECB failed to review and amend its procedures for selling insurance. The breaches arose across a number of areas including the sales process, training, monitoring and management of information and compliance.

By agreeing to settle at an early stage, GECB qualified for a 30% discount. Without the commitment to remedial action and appropriate redress, the financial penalty would have been substantially higher.

"Our focus on Payment Protection Insurance will remain very high this year," said Margaret Cole, head of enforcement at the FSA. "We are determined to see significantly better practice in PPI sales, and will crack down where firms fail to treat their customers fairly."