Swinton rapped over PPI sales
Insurance broker Swinton has been heavily fined and ordered to offer refunds to 350,000 customers.
The Financial Services Authority (FSA) fined Swinton £770,000 and the company was told to offer the refunds after the watchdog said "serious failings" were found in its sales of payment protection insurance (PPI).
The action was taken over Swinton's sales of "single premium" PPI, where the entire policy cost is paid upfront and often added to the price of the cover.
The FSA found that between December 2006 and March 2008, PPI was automatically included in Swinton's quotes without finding out whether customers actually needed the cover.
Swinton pulled out of the PPI market in March 2008 when the failings emerged but has been told it must now offer full refunds on 480,000 policies held by its customers. The firm generated around £7.8 million from its PPI sales.
The company, which has 580 branches nationwide, said it did not deliberately set out to breach FSA rules or to disadvantage customers.
It added: "The total cost of the product was disclosed to customers and was in line with prices charged by other providers in the market for similar products.
"Swinton believes that the vast majority of its customers understood that the product was optional when offered to them and in fact, less than 50% of its eligible customers purchased the product."