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The financial watchdog said the retailer was fined for allowing its sales force to sell PPI on loans without effective monitoring or training in place to ensure that it was being sold fairly.

The FSA has also fined Land of Leather’s chief executive Paul Briant £14,000

Land of Leather became authorised to sell PPI in May 2006, but in a statement the FSA said that it did not ensure that all of its sales force were fully trained to sell the products until November 2006.

It also said that the retailer continued to sell PPI in its 90 stores without any effective check on its sales force until February 2007. 

FSA director of enforcement Margaret Cole said: "Firms must not sell PPI unless they have appropriate systems and controls in place to ensure that their customers are treated fairly. 

"We are determined that firms should change their behaviour in selling PPI and the fines against Land of Leather and Mr Briant show our determination in this area."

Cole added: "Retail firms whose primary business is not selling general insurance will be held accountable to the same regulatory standards as the rest of the financial services industry."

The fine follows the announcement last September that the FSA would be imposing higher fines for serious failings in the retail market, including against firms who fall short in relation to PPI.

The regulator said the fine would have been higher, but the retailer had sought to improve its systems and controls during the period under review, including re-training staff and working to implement mystery-shopping and an after-sale customer contact exercise.