Credit Card News Capital One To Spend £3 Million On Compensating PPI Customers 18064482

Capital One to spend £3 million on compensating PPI customers

16 February 2007
Capital One bank has been fined £175,000 for mis-selling payment protection insurance (PPI) as the Financial Service Authority (FSA) steps up its campaign against irresponsible sales practices on this specialised insurance.

The financial watchdog found the bank had failed to treat its customers fairly and omitted to implement adequate sales practices.

Capital One failed to give 50,000 customers adequate information about the policy over a 15-month period, the FSA found.

The bank gave customers a policy summary but no information enabling them to establish whether the policy was right for them, or what it covered.

“It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time,” said FSA director of enforcement Margaret Cole.

The bank claimed in response that it had begun making “significant improvements to its sales and administrative processes concerning PPI” prior to the FSA investigation.

Capital One has now embarked on a compensation programme for all the customers who were given insufficient information on the product, estimated to cost the company up to £3 million.

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Written by Editorial Team