Capital One fined by watchdog

Credit card provider Capital One has been fined £175,000 by the Financial Services Authority (FSA).

The fine comes as the industry watchdog found that the bank had inadequate controls regarding selling Payment Protection Insurance (PPI) to customers.

PPI is taken out approximately 7 million times each year, and covers debt repayments in case of an accident, sickness or unemployment.

While PPI can prove useful to those in debt, the FSA had found earlier this month as part of its ongoing investigation into the cover that some financial services companies were making its purchase a “default” choice for customers, using techniques such as a pre-checked box purchasing the cover on online application forms.

The regulator ruled that, in the period January 2005 to April 2006, Capital One did not provide adequate information about the policy to 50,000 of its customers, leaving its terms unclear.

The FSA conceded, however, that the bank did implement remedial measures before its ruling, which included compensating inadequately informed customers to the tune of around £3 million.

Tags: british bankers association, online application, purchase, GBP, sickness, application forms.The regulator, investigation, fine