The FCA found that Swinton’s aggressive sales strategy meant that it failed to treat customers fairly in its telephone sales of monthly add-on insurance policies.
Between April 2010 and April 2012, Swinton sold personal accident, home emergency and motor breakdown policies, which during the relevant period generated an income for accounting purposes of £92.9 million. The FCA found that Swinton did not provide enough information to customers about the key terms of the policies and also failed to properly monitor its sales calls.
Swinton set aside £11.2 million to repay those customers who were mis-sold, of which £1.9 million has already been paid out. Swinton has contacted over 650,000 customers it thinks may have been affected. Any policy holders who believe they bought monthly cover as a result of mis-selling should contact Swinton directly.
Tracey McDermott, the FCA’s director of enforcement and financial crime, 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.
“At the FCA 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 figures 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.”
