It seems the credit crunch has devoured another target this week, this time in the form of Liverpool Victoria Banking Services who have been fined for failings in their sales of Payment Protection Insurance.
Compensation also has to be given to those customers who bought PPI when looking for unsecured loans between 14 April 2005 and 8 August 2007.
The FSA claims that customers who called the banking service in order to obtain a an unsecured loan, had additional costs of a PPI added to the price of their quote without ever having asked for it. It is said LVBS was also accused of putting pressure on customers who refused to get a PPI.
On top of this, customers were given misleading advice about the PPI’s assets and limitations. Of the 97 calls monitored and reviewed by the FSA it found 60% of them were not compliant with procedures.
Margaret Cole, director of enforcement at the FSA claims, “The LVBS sales process was flawed in its design. The firm has stopped all sales of PPI and is now proposing a comprehensive programme to contact its customers and pay them compensation where appropriate.”
The largest fine of this kind was for £1,085m, given to HFC Bank for its poor selling of PPI. The Liverpool Victoria Banking Services is the seventh bank to receive this sort of fine and has been charged the second highest amount.
The LVBS has agreed to refund those customers who paid interest on PPI premiums automatically to save less hassle for customers to get in touch with them. Letters will also be sent out to clients asking them to review the terms of the policy and award compensation where necessary.
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