The UK Financial Conduct Authority has fined high street insurance retailer Swinton group £7.38m for the mis-selling of monthly add-on insurance policies.
The fine was reduced from an earlier figure of £10.54m, with the FCA applying a 30 per cent discount as Swinton settled at an early stage in its investigation.
Between April 2010 and April 2012, Swinton sold personal accident, home emergency and motor breakdown policies, which during the relevant period generated an income for accounting purposes of £92.9 million. The FCA found that Swinton did not provide enough information to customers about the key terms of the policies and also failed to properly monitor its sales calls.
Swinton has set aside £11.2m to repay customers who were mis-sold, £1.9m of which has already been paid out. Swinton has contacted over 650,000 people it thinks may have been affected.
Tracey McDermott, director of enforcement and financial crime at the FCA, said:
Swinton failed its customers. When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit.
At the FCA we have been clear in our expectation that firms must behave in the interests of consumers. Today’s outcome shows our approach in action and will act as a deterrent for other firms tempted to put profit figures above the fair treatment of customers.