BRITAIN’S biggest high street insurance brokers was fined a record £7.38 million yesterday after mis-selling nearly £100m-worth of policies to more than 650,000 clients.
Swinton, which has about 30 of its 600 branches north of the Border, ran an “aggressive sales strategy” between April 2010 and April 2012 under which it didn’t provide enough information to customers.
The Manchester-based broker failed to tell customers that the home emergency, motor break-down and personal accident policies that it was offering over the telephone were optional.
Swinton has set aside £11.2m to repay clients who were mis-sold the policies, with £1.9m having already been paid back.
The fine – a record since the Financial Conduct Authority (FCA) was create in April and the second-highest ever handed down to an insurance broker – was reduced from £10.5m after Swinton settled at an early stage.
Tracey McDermott, the FCA’s director of enforcement and financial crime, pictured right, said: “Swinton failed its customers. When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit.
“We have been clear in our expectation that firms must behave in the interests of consumers. Today’s outcome shows our approach in action and will act as a deterrent for other firms tempted to put profit above the fair treatment of customers.”
Martin Wheatley, FCA chief executive said: “I recently told the insurance industry that we were taking a strong interest in the area of add-ons, and our first competition study will take a far-sighted view of the impact of current practice on consumers in this market.”
Swinton said that chief executive Christophe Bardet had been appointed in December 2011 and instigated a full review of the business, which uncovered the mis-selling and reported it to the Financial Services Authority (FSA) – the FCA’s predecessor – in March 2012.
Bardet said he was changing the company’s focus to deliver insurance policies with a “personal touch”.
He added: “We apologise for these shortcomings. They were not compatible with the proud history of Swinton, which since 1957 has been providing peace of mind to people through insurance cover.
“As the biggest high-street insurance retailer in the UK, with 500 branches, we are part of the community for more than two million customers.
“Swinton is embarking on a £60m investment in growth, which puts the customer at the heart of everything we do.”
Last year, the FSA fined CPP a record £10.5 million for mis-selling insurance policies to Barclays, HSBC, Royal Bank of Scotland and Santander customers.
Clients were sold insurance to protect against fraudulent transactions – even though the banks would automatically refund such costs.