HFC Bank fined £1m over insurance?The FSA (Financial Services Authority) has fined part of HFC Bank £1m for mis-selling PPI (payment protection insurance). My questions are (a) where does the money go after the FSA receive it? Into the FSA's coffers? And (b) does HFC actually pay this amount, or is it covered by an insurance they... | |
a) It goes to the FSA and increases the funds they have to pay compensation claims.
b) Yes - you can't insure against FSA fines.
c) In my opinion the fine is ludicrously . . . small. An internet company loans.co.uk was fined £450,000 and 14,000 policyholders were affected - the number of clients affected by HFC was more than 10 times that number (164,000). The average fine was about £7.00 a policy - and the commission earned about 100 times that.
(I'll add anothe comment - the Government are supposed to be securing Northern Rock customers' funds. In practice if the Rock went belly-up the FSA compenation fund would be invoked - and there aren't sufficient funds in it. The FSA would borrow the money and claw it back by increasing the levies made in the Financial Sevices Sector - and hope another crash does not happen. This means that as an insurance broker I am actually underwriting these guarantees.)
You cannot be insured against breaking the laws or industry regulations and yes the money will go into the treasury coffers........HFC have for a long time tried to hard sell insurance through their subsidiary which was Hamilton Life but no idea who they deal with now..........its a good company to go to if you have a poor credit rating........but their premiums are expensive for PPI
