UK Car Group (UKCG), owner of used car
supermarket Carcraft, has been fined £91,000 by the Financial
Services Authority (FSA) over sales of payment protection insurance
(PPI).
The news is a further blow to Carcraft, which
was
reprimanded by the Office of Fair Trading (OFT) in November for
inadequate business practices, including the selling of
finance.
Go deeper with GlobalData
The FSA said UKCG, operator of Carcraft
through appointed representative CC Automotive Ltd, failed to heed
warnings raised internally about PPI sales, advised by a variety of
providers, between April 2007 and September 2008.
The agreement by UKCG to accept the fine
reduced the penalty from £130,000.
Although UKCG “took a number of steps to
address issues raised in the audits,” according to an FSA
statement, it failed to “record in a sufficiently detailed fashion
the advice provided to its customers. More generally, concerns were
also about staff competence, monitoring of individual advisers and
provision of completed documentation to consumers.”
At the time of the OFT’s action, the car
finance industry was apprehensive at what the move could bring,
with
some accusing the OFT of “stretching the elasticity of the
law”.
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By GlobalDataPPI, however, remains a contentious issue in
the industry as claims management companies pursue an estimated
£9bn of payouts, though the Financial Ombudsman Service last month
finished a
round of consultation regarding the threshold for complaints made
against companies.
richard.brown@vrlfinancialnews.com
