Swinton Group was recently caught misselling Payment Protection Insurance (PPI) by the Financial Services Authority but was let off too lightly, said Vera Cottrell, personal finance campaigner for Which?

The Financial Services Authority imposed a fine of merely £700,000 on the Swinton Group, despite evidence that the fine makes up only one tenth of what the company made in profits from PPI. Over the relevant period, the company made more than £7.8 million in profits from sales of the misrepresented PPI. During this time, only 266 policies were carried out for claim, while more than 500,000 policies were sold to unsuspecting customers. The profits were earned by charging customers £15 or £20 for a policy that cost the Swinton Group around £1.21.

Cottrell said the case is especially shocking, mostly because Swinton Group is being let off so lightly. According to Cottrell, the Swinton Group was supposed to be providing top notch and customized advice to customers seeking assistance with insurance. However, the company instead misrepresented the PPI insurance, leaving many customers with insurance that was both unnecessary as well as unsuitable.

Which? believes Swinton Group and its senior management should be punished more harshly for the misrepresentations it made, which were far and wide. Among the misrepresentations were that Swinton claimed to customers that the policy was free, when in fact, they were being charged for it. Additionally, Swinton Group did not make it clear to customers that the plan was optional and they therefore were not required to hold such a policy.

The Financial Services Authority also reported that telephone sales people of the PPI offered by Swinton Group failed to obtain costumer consent, failed to ask the minimum scripted questions and failed to disclose pertinent information about the PPI.

The misrepresented PPIs offered by the Swinton Group were sold mostly to people who were paying their vehicle or home insurance premiums through monthly installments.