Regulators make Mike Ashley backed firm pay £12.5m back to customers

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A division of Findel, the London-listed firm backed by Sports Direct, has agreed with financial regulators to pay £12.5m back to customers for insurance products that "offered little or no value".

Personal shopping firm Express Gifts, one of the two main divisions of Findel, sold either property insurance or purchase protection insurance products to customers between 2005 and 2015.

And problems were unearthed after Express Gifts undertook an internal review of the insurance bolt-ons it sold. After concluding on its own shortcomings, it decided to report itself Financial Conduct Authority (FCA)

Read more: This company has refused to make Mike Ashley chairman

Mike Ashley, who owns a 29.9 per cent stake in Findel via Sports Direct, failed in a move to position himself as chairman of the group last year.

Both the firm and the FCA agreed the products "did not provide adequate value to customers because although it covered all items purchased, these were predominantly items of clothing, which customers would not generally consider insuring".

Express Gifts estimated 330,000 customers were impacted and has committed to contact all of them.

"This programme is the result of a thematic review that Express Gifts undertook into financial products sold in the past. After identifying this situation, the company notified the FCA and has worked with them to address the matter," Express Gifts said in a statement.

 

Warning

Jonathan Davidson, the FCA's director of supervision – retail and authorisations praised the Findel's actions. He said: “It is good news for consumers that Express Gifts has reached agreement with us that this insurance was of low value to customers."

Read more: Are regulators getting soft? FCA fines fall 97 per cent

Nevertheless, he was clear that the onus is on firms selling similar products to identify problems and not wait for the FCA to investigate. He added:

 

We expect firms to identify where insurance products of little or no value have been sold to customers and take appropriate action.

Findel's share price was up just over 0.5 per cent in the wake of the news. The firm had previously provided for the redress amount in its interim results in November 2016.