Land of Leather fined over PPI sales
Land of Leather has been fined £210,000 for failing to ensure Payment Protection Insurance was sold fairly to customers taking out loans.
The Financial Services Authority (FSA) has fined the furniture retailer for allowing its sales force to sell controversial PPI on loans without proper training. The firm - which has 90 stores in the UK - also failed to monitor sales to ensure those people taking out PPI really needed insurance and whether they fully understood what they were paying for.
The FSA estimates that Land of Leather’s PPI failings exposed around
58,000 customers to an "unacceptable increased risk" of buying
Land of Leather’s chief executive, Paul Briant, has also been fined £14,000 for failing to oversee the sale of PPI properly.
Margaret Cole, director of enforcement at the FSA, says: "Firms must not sell PPI unless they have appropriate systems and controls in place to ensure that their customers are treated fairly."
Following the investigation by the FSA, Land of Leather contacted certain customers and gave them the opportunity to reconsider whether PPI was suitable for them.
It has also agreed to contact more customers going forward.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.