David Head, of mortgage and insurance broker network FT Compliance Services (FTCS), has been fined £10,500 for failing to properly supervise insurance brokers with links to an individual previously disciplined by the FSA for PPI.
FTCS operated as a network and recruited mortgage and insurance brokers as appointed representatives.
Head was solely responsible for ensuring FTCS and its ARs were compliant but he failed to put in place systems and controls to ensure that the ARs made suitable recommendations, the FSA found.
“Head therefore exposed customers to the risk of purchasing unsuitable PPI”, the regulator said.
The FSA’s investigation found that in a small number of cases where single premium PPI was sold, ARs were not properly considering customers’ eligibility for PPI before making a recommendation.
It also found the brokers failed to consider whether any medical conditions or existing insurance cover made PPI unsuitable for a customer.
There was also no evidence to suggest customers were told that they could buy PPI from other providers which might be more suitable for their needs, the FSA said.
Margaret Cole, FSA director of enforcement and financial crime, said: “As a director of a network, Head was personally responsible for ensuring that the ARs were properly supervised and he failed to do so.
“His failure is particularly disappointing given that he was on notice that two of the ARs had links with a person previously disciplined by the FSA for PPI failings.”
As Head admitted misconduct, agreed to settle at an early stage and was open and cooperative during the FSA investigation, he qualified for a 30% reduction in penalty.
The FSA would have otherwise imposed a financial penalty of £15,000.
