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Egg fined GBP 720,000 for selling unnecessary insurance

Thu, 11 Dec 2008

The City Watchdog reported yesterday that the credit card firm Egg persuaded 40,000 customers to buy insurance they did not require and could never be used. The company were fined by the Financial Services Authority for mis-selling payment protection insurance on their credit cards over a period of two years.

The insurance was sold as a guarantee that policy holders would get a payout of they lost their job or became ill, however, Egg was fined for failing to do this and selling the insurance under false pretences. These latest findings are reportedly being subjected to an investigation by the Competition Commission .

The City Watchdog is reported to have been concerned that Egg customers were treated unfairly and had aggressive sales tactics forced upon them. Which lead to them purchasing the insurance despite not wanting it. Yesterday, the American investment bank Citigroup which owns Egg, was forced to make a public apology to its customers. The company could have been fined up to 1.3 million GBP if it hadn’t have cooperated with the City watchdog and their investigation.
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