The Financial Services Authority has banned five individuals for failings in relation to insurance fraud and imposed one of its largest ever fines of £150,000 for insurance fraud.
The five individuals banned were Andrew Jeffery of Jeffery Flanders (Consulting) and Paul Willment, Melanie Aspden, Gaenor Clayton and Barrie Duncan Aspden who all worked at Orion Direct and Peppercom.
In addition to his ban Jeffrey was fined £150,000. The FSA says he failed to put in place insurance policies appriately or at all in some cases, despite collecting payment from customers . He also knowingly forged documents and correspondence to mislead insurance firms and obstructed the FSA’s investigation by failing to report changes to his firm’s contact details.
Willment was also fined £50,000 in addition to being banned from financial services. The FSA says Willment rarely attended Orion’s offices, had no active involvement in the management of the business and delegated his roles and duties to the unapproved employee Barrie Aspden.
Between September and November 2007, Barrie Aspden withdrew over £300,000 from Orion’s client money account to fund Peppercom’s development and set up a new company called ’Click the Pepper’. Willment was aware of the transfers but did not challenge Aspden about it. As a result the FSA says that Aspden was able to commit insurance fraud.
Melanie Aspden, Barrie Aspden’s wife, and Gaenor Clayton, his sister-in-law, have also been banned for their failure to demonstrate competence and capability as directors at Orion and Peppercom. They were not involved in decision-making or financial management but instead delegated these responsibilities to Barrie Aspden. They both failed to ensure client funds were used solely for the purposes they were provided for.
Since the beginning of this year, the FSA has banned 14 individuals for failings relating to insurance businesses, with fines totalling over £500,000.
Margaret Cole, director of enforcement and financial crime at the FSA, says: “These five individuals acted with complete disregard for the interests of their customers and the FSA’s regulatory requirements.
“Individuals holding a significant influence function role such as that of director must act with integrity as well as with the skill, care and diligence necessary to manage effectively the businesses for which they are responsible.
“The FSA does not tolerate these types of failings. We will continue to take action against those who commit insurance fraud, as well as those who fail to take action to prevent it.”
The actions of Barrie Aspden came to light following information that the FSA received through its whistle blowing line. The FSA’s Small Firms and Contact Division looked into this further before referring the matter on to Enforcement for full investigation.