PPI flaws result in fine for LV

Flaws and problems relating to the sale of Payment Protection Insurance, or PPI, have resulted in Liverpool Victoria Banking Services receiving a hefty fine of £840,000 from the Financial Services Authority. The FSA said that there were serious failing in the way that the firm sold PPI, which has been at the centre of controversy for some years in relating to how widely it has been mis-sold.

It was found that LVBS had added the cost of PPI to quotes and loans for customers without their knowledge, which means that customers often had no say in whether they wanted to take out the cover or not, and given the fact that the average cost of cover including interest can exceed £1500 many may not have wanted the insurance.

An FSA official said: “We have made it abundantly clear that firms must ensure their PPI sales processes are up to the required standards and must change their behaviour where necessary. The LVBS sales process was flawed in its design.” The firm has now apologised, and according to reports no longer sells PPI.

The report also claims that when customers did realise that PPI had been added and asked for it to be removed, LVBS put pressure on them to continue with the cover.