Internet bank Egg was fined £721,000 for failings in the way it sold payment protection insurance (PPI) to its credit card customers. 40% of telephone sales of PPI between January 2005 and December 2007 showed major failings advised the Financial Services Authority (FSA).
Egg was authorised to sell PPI on a non-advised basis, which means they could only provide information on the policy, and not recommend prospective customers to buy it. The FSA advised it had found that the bank had instructed sales staff to use hard-sell techniques to those who chose not to buy the PPI cover when purchasing a credit card. They even discovered that Egg would apply the PPI cover even when a customer had agreed not to buy it.
Egg had to write to all customers who were mis-sold PPI policy through them and offer a full refund for a PPI reclaim and the option to cancel the cover. Egg was the 20th company to face fines from the FSA.
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