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Release Date: 7th August 2014

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined Stonebridge International Insurance Limited £8.4 million for mis-selling accident insurance products to customers across several European countries, including the UK, between April 2011 and December 2012. Stonebridge targeted vulnerable customer segments, specifically those with lower incomes and without higher educational or professional qualifications, offering personal accident, accidental death, and accidental cash plan insurance products.

The sales approach involved outsourcing telesales operations that aggressively pushed customers towards more expensive options. Furthermore, when customers attempted to cancel their policies, the outsourced post-sale support teams employed tactics to discourage this, effectively creating barriers to cancellation.

Tracey McDermott, FCA’s director of enforcement and financial crime, criticised Stonebridge for not providing fair and balanced information, which is crucial for consumers to make informed decisions about insurance products that suit their needs. The FCA’s findings highlighted that the scripts used by telesales teams did not meet the regulatory requirements for clarity and fairness, reflecting poorly designed systems and controls, and inadequate oversight of outsourcing arrangements.

As part of the penalty, Stonebridge is conducting an independent review of its past sales practices within the UK and the EU, with potential implications for up to 486,444 customers who might have been affected by these practices. Stonebridge has initiated contact with these customers to assess if compensation is warranted, with £400,000 already paid in redress to affected UK customers.

The FCA’s action against Stonebridge underscores the critical need for firms to maintain stringent oversight of outsourced functions and to ensure their practices align with fairness and transparency, particularly when targeting vulnerable market segments. This case serves as a reminder to all regulated firms of the importance of adhering to consumer protection standards, especially in direct sales and customer service functions, to avoid substantial penalties and reputational damage.

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