Porta Verde Financial Services Limited (Porta Verde) has been fined £25,000 by the Financial Conduct Authority (FCA) after two of its appointed representatives (ARs) mis-sold insurance, often to elderly and vulnerable customers, between October 2010 and June 2012.
These companies used high-pressure sales tactics and misleading information to push consumers into buying insurance for satellite TV equipment, plumbing and drainage repairs.
Tracey McDermott, the FCA's director of enforcement and financial crime said:
"Porta Verde is responsible for the unacceptable sales tactics used by its representatives. Firms should be in no doubt that we will take action when they - or their appointed representatives - fail to treat their customers fairly."
On one occasion a sales agent misled a customer's carer to obtain permission to process payments. On another, a customer clearly thought he had been called by his satellite TV provider to discuss subscription fees. Despite his confusion, he was transferred to the agent's manager and asked to purchase cover.
The FCA seeks to ensure consumers are properly protected, in line with its objectives. Acting on information from consumer complaints, the FCA's predecessor body, the Financial Services Authority (FSA), insisted Porta Verde take steps to address the issue, or stop using these ARs.
Porta Verde failed to take the necessary action to correct the problem, or ensure its ARs communicated with consumers in a way that was clear, fair and not misleading.
Porta Verde settled at an early stage of the investigation, qualifying for a 30% discount. Without this discount, the FCA would have fined Porta Verde £353,800. Porta Verde, which is now entering into voluntary liquidation, provided evidence of financial hardship - the £25,000 penalty reflects Porta Verde's total remaining financial resources.
Notes for editors
- The Final Notice
- Appointed representatives (ARs) are individuals or firms that carry out regulated activities under the oversight of a regulated Principal (in this case, Porta Verde), which is directly authorised by the FCA and ultimately accountable for its ARs' conduct.
- Porta Verde was responsible for its ARs' conduct, so the FCA has taken action against Porta Verde for failing to meet principles 3, 6 and 7 of the FCA's principles for businesses.
- Principle 3 requires firms to manage their business, and risks, responsibly and effectively.
- Principle 6 requires firms to consider the interest of its customers and treat them fairly
- Principle 7 requires firms to communicate with its customers in a way that is clear, fair and not misleading.
- The FCA's website has advice for consumers, including information on general insurance products.
- The FCA's investigations revealed examples of extremely poor conduct and mis-selling:
- A 78 year old widow thought she had been contacted by her satellite TV provider and asked for the access to the sports channel to be cancelled as she could no longer afford to pay the additional subscription payments. The company processed a payment of £170 for three years' cover without her knowledge, ignoring the clear instructions that she couldn't afford it and that an annual payment of £65 would have been more appropriate for her.
- A sales agent called a customer who had impaired hearing and was requested to speak to the customer's carer. The agent misled the carer, stating "I called this morning in regards to maintenance of his satellite television system. He's happy to go ahead with a monthly direct debit..." On this basis, the agent obtained the customer's bank details from the carer, and processed a payment of £85.
- Another customer believed they'd been contacted by their satellite provider about their monthly subscription fees. Despite stating 14 times that he did not want to make any changes, a sales agent called back later in the day and processed a payment of £90 to insure their satellite TV equipment for one year.
- A sales agent contacted another customer to persuade him to transfer his plumbing and drainage cover. When asked why the cover needed to be swapped and who the call was from, the sales agent demanded to know why the customer did not want to take out a new policy and insisted that "there was no logical reason" to refuse to change cover.
- On the 1 April 2013 the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.