FSA fines increase fourfold

by Gill Montia

Story link: FSA fines increase fourfold

The Financial Services Authority (FSA) handed down fines of around £22.6 million during 2008, a figure more than fourfold the 2007 total of £5.3 million.

In terms of volume, 48 penalties were applied to UK financial institutions during the year, up from 23 in 2007.

Mis-selling payment protection insurance (PPI) cost the industry around £10 million, with Alliance & Leicester responsible for £7 million of the total.

In October, the lender was found guilty of the most serious case of PPI mis-selling so far detected by the regulator.

The bank actually trained its staff to browbeat customers into buying the insurance if the inclusion of a PPI premium in a quotation was queried, or an adviser’s recommendations challenged.

During the past 12 months, thirty-eight finance professionals have been banned from working in the industry and 103 firms lost their ability to carry out regulated activities.

Fourteen individuals were fined for breaches, some involving mortgage fraud, which the regulator admitted in February was more widespread than had previously been thought.

The highest penalty paid by an individual during 2008 was £129,000.