The Financial Services Authority has fined GE Capital Bank £610,000 for failing to sell payment protection insurance properly and for failing to treat its customers fairly.
The regulator found that the lender failed to have the adequate systems and controls for selling insurance which including PPI.
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 usually 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.
At any one time, approximately 300,000 retail assistants employed by the stores are permitted to sell insurance on behalf of GECB.
In 2005 alone, over 850,000 policies which included PPI were sold on its behalf.
Margaret Cole, director of enforcement at the FSA, says: “Millions of people take out store cards every year.
“They need to know that PPI is almost always optional and should consider whether they need it before signing up.
“Our focus on PPI will remain very high this year.
“We are determined to see significantly better practice in PPI sales and will crack down where firms fail to treat their customers fairly.”
But GE Money Home Lending has stressed that the action was not taken against itself.
A spokesperson for GEMHL, says: “We have noted today’s announcement by the Financial Service Authority, regarding action taken against GE Capital Bank.
“It is important to stress that today’s action by the FSA does not relate to GEMHL, which sells almost all of its payment protection products through FSA regulated brokers.
“GEMHL continues to work closely with the regulator as well as all of our brokers and partners to ensure that they are providing transparent and comprehensive advice, allowing consumers to make informed decisions about their money.“