Porta Verde Financial Services has been fined £25,000 by the FCA after two of its appointed representatives mis-sold insurance, often to elderly and vulnerable customers.
The companies used high-pressure sales tactics and misleading information between October 2010 and June 2012 to push consumers into buying insurance for satellite TV equipment, plumbing and drainage repairs, says the FCA.
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.
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 and the £25,000 penalty reflects Porta Verde's total remaining financial resources.
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The FCA's investigations revealed examples of "extremely poor conduct and mis-selling" including:
o 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.
o 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.
o 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.