The Financial Services Authority (FSA) fined the company for failing to treat customers fairly when selling payment protection insurance (PPI), in connection with home shopping products.
The retailer failed to provide personal recommendations or advice, either verbally or in writing, as to why the PPI policy met their demands or needs.
According to the FSA, Redcats' breaches were 'particularly serious'. During an 18-month period, more than 1,600 customers were sold PPI that was unsuitable, despite the company stating that its sales were made on an advised basis.
FSA director for enforcement Margaret Cole said: 'We have highlighted payment protection insurance as an FSA priority because of the potential risks to consumers. As a result of its systems and controls failure, Redcats exposed its customers to unacceptable levels of risk. Firms offering PPI must operate in a way that treats their customers fairly and meets regulatory requirements.'
The FSA has fined two other companies - Regency and Loans.co.uk - over poor PPI selling practices.
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