GE Capital Bank was fined $1.2 million by the UK’s Financial Services Authority for failing to have adequate systems and controls when selling insurance with store cards.
The FSA says GECB was fined after it found that the bank failed to review and amend certain violations to procedures when selling insurance, including sales procedures, staff training and monitoring. “Millions of people take out store cards every year,” says Margaret Cole, FSA’s director of enforcement. “They need to know that PPI is almost always optional and should consider whether they need it before signing up.”
The store cards are sold at tills and more than 300,000 retails assistants are permitted to sell GECB insurance on behalf of the bank. In 2005, more than 850,000 policies were sold. GECB was ordered to compensate customers where needed. Though the FSA says the financial impact on most customers was “modest.”