The Financial Services Authority (FSA) fined UK credit card provider Capital One £175,000 for failing to adequately protect its customers against the risk of being mis-sold PPI (payment protection insurance) with its cards. During 2005, Capital One sold 335,000 PPI policies with its credit cards to UK customers.
The FSA found that Capital One had inadequate internal systems and controls for selling PPI policies and failed to treat its customers fairly when selling to them. Between January 2005 and April 2006 they neglected to make sure that 50,000 of its customers received important PPI information.
The fine would have been up to £250,000 but Capital One was able to reduce this by co-operating with the FSA and taking immediate measures to repay its customers and restore faith in their name. Capital One advised after the fine that they will continue to review their policies and practices for selling PPI with its UK credit cards. They also apologised to its customers for mis-selling payment protection insurance to them.
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