The Financial Services Authority has fined broker Capital Mortgage Connections £17,500 for rule breaches including cold calling potential customers.
This is the first time it has taken action against a firm for cold calling, after the FSA investigation found that 85 per cent of its business was generated by cold calling potential customers.
The fine also includes CMC’s failure to treat its customers fairly by being unable to demonstrate that it gave appropriate pricing information on the accident, sickness and unemployment insurance polices sold.
A further failing was its inability to establish and maintain appropriate systems and controls. Firms already fined for PPI failings include Regency Mortgages Corporation and Loans.co.uk.
FSA head of retail enforcement Jonathan Phelan says: “Cold calling potential customers for mortgage business is against our rules and firms operating in the industry should be aware of this. We will continue to monitor the market for instances of cold calling.
“Firms must be able to demonstrate their reasons for recommending a particular insurance policy and we expect firms to have systems and controls in place to monitor their businesses. The sale of PPI, of which ASU is a type, is a priority for the FSA due to the potential level of risk to consumers. We take this very seriously.”