Liverpool Victoria Fined For Mis-Sold PPI
Britain's biggest friendly society, Liverpool Victoria, yesterday was ordered to compensate customers to a sum that will amount to millions of pounds, as well as being fined �840,000. This severe penalty was due to breaching sales guidelines in over 15,000 payment protection policies that were sold to their customers, over a two-year period, between 2005-2007.
The policies were sold to customers who took out personal loans with the company, who automatically added the cost of the payment protection policies, even though the customers were not consulted as to whether they wanted it or not. Hard-sell techniques were imposed on customers who did notice the extra, unauthorised cost they had incurred, in an attempt to make them go on paying it.
The fine that was imposed on them by the FSA (Financial Services Authority) was initially �1.2m. They agreed to co-operate with the FSA early though, and benefited from a reduction. The total bill though, is going to be millions, after it was ruled that those customers concerned, were to be compensated with immediate effect. This is inclusive of any interest that Liverpool Victoria accrued from the policies. The recently renamed LV=, may also have to reimburse certain customers the whole value of their premiums.
It has been stated by the FSA that 14,500 customers had suffered because of the policies, and that the average cost of each policy was somewhere in the region of �1,600 pounds. This earned the company, along with its underwriters, �23m in revenue.
Margaret Cole, who is Director of Enforcement for the FSA, issued stern words. She said, "When customers phone for a quote, it is totally unacceptable for firms to add on the cost of insurance which the customer has not asked for." Adding to this, she stated, "Many customers make their decisions when speaking to sales staff. If those conversations are unclear or misleading it will be no defence for firms to say that full details were included in paperwork."
Lastly, she added "The sales process was flawed in its design. The firm has stopped all sales of PPI and is now proposing a comprehensive programme to contact its customers and pay them compensation."
In response to these harsh, but true words, Liverpool Victoria said: "LVBS apologises to customers for any past shortcomings in the PPI sales process. It has proactively launched an appropriate customer redress programme and will be writing to all customers affected."
When Consumer groups were consulted on the matter, they concluded that PPI policies were still being sold incorrectly to consumers. The Head of Campaigns for Which? Louise Hanson had this to say, "While it's good to see firms being hit in the pocket for mis-selling, the FSA and industry need to do more to stop it happening in the first place.
Anyone who has a personal loan or credit card should check whether they have a PPI policy.
Claims Management UK can help you with your Mis-Sold PPI