Credit Card News FSA Cracks Down On Store Card Provider 18049904

FSA cracks down on store card provider

02 February 2007
The Financial Services Authority (FSA) has imposed a fine of £610,000 on store card provider GE Capital Bank after the bank failed to put in place adequate controls to guard against mis-selling payment protection insurance (PPI) to customers.

The financial services watchdog’s campaign against mis-sale of PPI has seen it fine four firms to date as it seeks to raise public awareness that the product is rarely compulsory and only suitable for a limited range of customers.

GE Capital provided store cards to big high street names including Debenhams, Halfords, Laura Ashley, Harrods and House of Fraser.

It sold as many as 850,000 payment protection policies in 2005 alone through 300,000 shop workers who the FSA ruled to be inadequately trained, since many were recommending the product to customers to whom it was ill-suited.

“Millions of people take out store cards every year,” Margaret Cole, the FSA director of enforcement, commented.

“They need to know that PPI is almost always optional and should consider whether they need it.”

PPI covers policyholders in the event that they fall ill, are injured or lose their job and are unable to keep up with credit card or store card payments as a consequence.

For more information about credit card protection, click here.

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Written by Editorial Team