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"PPI fine for Egg"

By admin | January 12th, 2009 | General

Internet financial giant Egg has found itself at the receiving end of a huge fine relating to the mis-selling of Payment Protection Insurance, after regulators identified serious failings with regards to the sale of this cover. PPI is usually sold alongside loans and credit cards, as well as other types of finance, to protect repayments for a specified period in the event that the policyholder cannot work due to sickness, injury, or redundancy. The failings in PPI sales were found to have occurred over a two year period according to reports.

Egg has been slapped with a fine of £721,000 over the situation, where it was found that 40% of PPI sales were not up to standard. The fine related to the sale of PPI with credit cards between 2005 and 2007.

Egg was found to have contacted customers to sell them PPI, and in the event that the customer was not interested they would be put through to another staff member who would try hard sales techniques to try and get them to take out the cover even though they had stated that they did not want to take it.

It was also found that the employees involved with the sale of PPI at Egg had been very enthusiastic about the benefits of the cover but had not provided adequate information about the risks and downside of the cover. Some customers are even said to have had PPI added to their credit card accounts even after they had insisted that they did not want to take the cover out.

An official from the Financial Services Authority stated: ‘All firms must ensure that customers are treated fairly when selling PPI and if a customer does not want PPI, they should not be pressured into taking it. We will continue to fine firms where we find PPI failings. It is unacceptable that Egg did not identify the problems with its sales processes despite a series of high profile FSA communications on PPI, including earlier fines on other firms.’

Tags: egg, PPI

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