Insurance broker fined by Financial Services Authority for misleading clients

Tue, 24 Mar 2009

A Blackburn-based insurance broker has been fined £21,000 by the Financial Services Authority (FSA) for failing to satisfactorily control the recruitment, training and monitoring of its appointed representatives (ARs).

Aspray Limited, which specialises in managing insurance claims for property repairs, was found to have mislead its clients by telling them that its services were free of charge, when actually cancellation charges could be incurred and ARs had discretion to charge an insurance excess.

Clients were further misled by Aspray by being told that all its contractors were screened and that only quality local tradesman were used, but most of the contractors were in fact found using sources such as Yell.com and were not properly vetted. According to the FSA, the firm also failed to inform customers about their right to refer complaints to the Financial Ombudsman Service (Fos).

Jonathan Phelan, head of retail enforcement at the FSA, said: "It is vital that principal firms maintain effective controls over the recruitment, training and monitoring of their appointed representatives."
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