FCA Fines Stonebridge £8.4m for Accident Insurance Products
FCA Fines Stonebridge £8.4m for Accident Insurance ProductsReuters

The Financial Conduct Authority has fined Stonebridge International Insurance Limited £8.4m for selling low and middle income customers accident insurance products that were not necessarily right for them.

The regulator said in a statement that between April 2011 and December 2012, Stonebridge targeted and encouraged this customer demographic, who also don't have degrees or professional qualifications, with more expensive personal accident, accidental death and accidental cash plan insurance products.

The FCA said outsourcing companies sold the policies over the telephone and were responsible for trying to get the consumer to snap up the most expensive products available, even if they weren't necessarily right for them.

The watchdog said companies were also encouraged to actively dissuade customers from cancelling their policies once they purchased them.

"Customers are entitled to expect firms to provide them with fair and balanced information to enable them to make the right choices about the product that is right for them," said Tracey McDermott, FCA's director of enforcement and financial crime.

"Stonebridge failed to do this and, when customers tried to cancel, put up barriers to prevent them from doing so. Firms must take responsibility for their outsourcing arrangements and ensure that they treat customers fairly".

The FCA reiterated in its statement that Stonebridge's "poor systems and controls, and inadequate oversight of its outsourcing companies breached the FCA's requirements that firms treat customers fairly and have appropriate systems and controls in place," after viewing telesales transcripts.

Stonebridge has already paid redress worth a total of £400,000 (€503,608, $673,634) to affected customers in the UK.