GE Capital fined $1.2m by UK regulators

31 January 2007

UK's Financial Services Authority has today fined GE Capital Bank (GECB) $1.2 million for failing to have adequate systems and controls for selling insurance with store cards.

GECB was fined after it was found that it failed to review and amend its procedures for selling insurance with breaches in a number of areas, including sales procedures, staff training and monitoring.

FSA director of enforcement Margaret Cole said: "Millions of people take out store cards every year. They need to know that PPI is almost always optional and should consider whether they need it before signing up."

The regulator explained that store cards branded in the name of the retailers and associated insurance products are sold at tills and currently around 300,000 retail assistants are permitted to sell insurance on behalf of GECB. In 2005, over 850,000 policies were sold.

GECB has also been ordered to pay compensation to customers where appropriate – although the FSA described the financial impact on most customers as being "modest".

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