Payment Protection Insurance broker fined by FSA.

The Financial Services Authority (FSA) has today (09/07/10) fined David Head, director of Essex based mortgage and insurance broker network, FT Compliance Services Limited for Payment Protection Insurance (PPI) failings.

The FSA fined David Head, £10,500 for failing to properly supervise insurance brokers who had close links with a firm previously disciplined by the FSA the mis-sale of PPI.

David Head was responsible for insuring FT Compliance Services and its appointed representatives complied with FSA regulation. Head however failed to put in place systems and controls to ensure the appointed representatives made suitable recommendations, exposing customers to the risk of purchasing unsuitable PPI.

Investigation by the FSA found that in cases where single premium PPI was sold:

-          Appointed representatives were not properly considering customers eligibility for PPI before making a recommendation

-          Customers were not asked about medical conditions or any existing insurance cover that could make PPI unsuitable for them

-          Customers weren’t being told they could buy PPI from other providers which would be more suitable for their needs

Margaret Cole, the FSA’s director of enforcement and financial crime said: “As a director of a network, Head was personally responsible for ensuring that the appointed representatives were properly supervised and he failed to do so. His failure is particularly disappointing given that he was on notice that two of the appointed representatives had links with a person previously disciplined by the FSA for PPI failings. There is a serious responsibility attached to being an FSA approved person and Head’s fine demonstrates that we will not tolerate failure to deliver on that responsibility.”

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