The South African market should not take Treating Customers Fairly lightly. The Financial Conduct Authority (FCA) fined Swinton Group Limited £7.4 million for an aggressive sales strategy that resulted in the mis-selling of monthly add-on insurance products.
The FCA has now also fined three former executives of Swinton £928 000. The executives have been banned from performing significant influence functions at financial services firms. The executives stood to gain bonuses under the directors share scheme if operating profits reached £110 million in 2011.
Swinton allowed a culture to develop that pushed for high sales and increased profit without regard to the firm’s customers. The FCA expects, as does the FSB, that firms put customers at the heart of their business. The FCA found that the directors should have recognised the risk to customers and redressed the balance so that the drive to maximise profits did not jeopardise their fair treatment of customers.
Executives of financial service firms with significant influence are responsible for setting the tone and the culture. The FCA is prepared to hold individuals to account. No doubt, so will the FSB.