The Financial Services Authority (FSA) fined GE Capital Bank (one of the UK’s largest providers of store cards) – £610,000 for mis-selling PPI (payment protection insurance) to its customers. The FSA advised that GE Capital Bank had failed to put adequate systems in place to control sales of PPI sold alongside their credit cards, loans, and store cards. The bank failed to make their customers aware that the cover was optional and failed to train their staff in selling the products.
300,000 sales assistants employed by UK stores such as Debenhams, Mothercare, and House of Frasier were permitted to sell PPI with store cards; used when customers purchased more expensive products. In 2005 more than 850,000 policies were sold on behalf of GE Capital Bank and the FSA advised customers were not being given enough information about the PPI products and the trained sales assistants were not adequately trained.
The FSA aimed to make an example of this case and the fact that mis-sold PPI can also occur when people purchase store cards to pay for large or expensive items in retail shops.