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FSA raps Cathedral for PPI indiscretions

Cathedral Motor Company has fallen foul of the Financial Services Authority (FSA) over the sale of payment protection insurance (PPI) to cover vehicle finance agreements.

The company trades as Arbury and has four franchises in the Midlands – three Peugeot, one Citroën.

The FSA contends that Cathedral did not organize and control this regulated side of its business responsibly and effectively, and has imposed a public censure.

The censure states that the company was limited in or failed to monitor its staff, and as a result was unable to determine whether sales staff were paying due regard to the needs of customers.

Also, senior management were not sufficiently apportioned compliance responsibilities, and appropriate staff training was not ensured.

Cathedral also failed to keep adequate records relating to the sale of PPI to show that sales were appropriate to customers’ needs, and hadn’t provided customers with all appropriate documentation prior to the conclusion of PPI sales.

FSA director of enforcement Margaret Cole says: “It is important that firms whose primary business is not selling general insurance should adhere to our rules just as much as mainstream brokers.

“Cathedral’s failings, particularly in the monitoring of sales staff, created a risk of consumer detriment.”

However, the FSA did note that the group had taken steps and implemented procedures to rectify the situation and that the volume of PPIs sold was low (257 in 16 months). Cathedral declined to comment.

The group is not the first in the automotive industry to have received public censure regarding PPI. In December last year, Scottish multi-franchised retailer Eastern Western Motor Group was censured regarding statement of price.

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