UK broker Swinton Group has copped a £770,000 ($1.4 million) fine from the British regulator for committing “serious failures” in the sale of payment protection insurance (PPI).

An investigation by the Financial Services Authority (FSA) found the firm conducted a “flawed sales process” between December 2006 and March 2008.

Under an “assumptive” sales technique, Swinton automatically included single premium payment protection insurance when quoting cover. The FSA says the firm failed to establish whether customers had “any real demand or need for the cover”.

The product cost just £1.21 ($2.20) but included a £15-20 ($27-$36) fee for the broker. The firm accrued about £7.8 million ($14.2 million) from the sale of the cover.

The FSA found Swinton failed to properly disclose the cost of the PPI cover which was bundled with the initial insurance quote.

Swinton – which left the PPI market in March last year at the order of the FSA – ­has agreed to provide a full refund to more than 350,000 customers who bought the product.

FSA spokesman Margaret Cole said the fine “serves as a shot across the industry’s bow to remind it to play fair, or not play at all”.

Earlier this year Swinton paid £50 million ($91 million) to acquire the IAG UK business Equity Insurance Brokers.