The Competition and Markets Authority (CMA) isn’t happy with Paymentshield’s double whammy.
Part of the Ardonagh Group, Paymentshield had already been remiss in its obligation to send payment protection insurance (PPI) annual reminders to customers. Now the CMA has revealed two further violations.
“On one occasion, Paymentshield failed to send 604 customers annual reminders in relation to their mortgage PPI and income protection PPI due to an IT error,” noted the regulator, which has issued legally binding directions to the insurance administrator and distributor.
“A second failure meant that 22 customers only received statements every two years as opposed to annually. Both failures to comply took place between April 2013 and August 2019.”
The directions, issued yesterday (March 19), will require Paymentshield to take immediate action to introduce a system that ensures accurate annual reminders are sent out accordingly. An independent auditor will also have to be put in place to review the company’s processes.
According to the CMA, which currently does not have the power to impose financial penalties for such breaches, Paymentshield is offering affected customers the choice of continuing with their policy or cancelling it and receiving a refund. It said the firm has already repaid more than £380,000 for the recent failings, with a further £170,000 of refunds slated to reach customers.
“These breaches are serious and, if we had the extra powers we’ve proposed to the government, could have resulted in fines,” commented CMA’s senior director of remedies, business, and financial analysis Adam Land.
