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19/03/2004
FSA fine Allied Dunbar £725,000 over 'mishandled' complaints
Financial watchdog, the Financial Services Authority (FSA), has fined Allied Dunbar Assurance plc £725,000 for "serious flaws" in procedures for handling mortgage endowment complaints.
An FSA investigation revealed that mishandled complaints between May 2001 and April 2003 had exposed a large number of Allied Dunbar customers to potential loss.
The firm is now voluntarily reviewing complaints rejected from January 2000 and April 2003, including around 1,000 endowment complaints that were rejected during the period of breach and which in practice is the number of customers who may have suffered loss.
According to the FSA important parts of the firm's guidance issued to its staff on the operation of its complaint handling procedures were inadequate.
In a number of the complaint cases examined by the FSA complaint handlers had conducted poor quality investigations and there was a failure to gather sufficient evidence to make a fair assessment of both the consumer's attitude to the risk and the suitability of the sale.
Andrew Procter, FSA's Director of Enforcement, said: "The fair treatment of customers does not begin and end at the point of clinching a sale. It applies to all aspects of the relationship between firm and customer including the fair handling of a customer complaint. Where firms do not deliver the required standards and fail to treat their customers fairly we will intervene."
In December 2003 the FSA fined Friends Provident Life and Pensions Limited £675,000 for mishandling of mortgage endowment complaints.
Five other firms have been fined £5.2 million in relation to mortgage endowments.
A further 19 firms, who have not been publicly disciplined, are reviewing their sales of mortgage endowments, said the FSA.
(SP)
An FSA investigation revealed that mishandled complaints between May 2001 and April 2003 had exposed a large number of Allied Dunbar customers to potential loss.
The firm is now voluntarily reviewing complaints rejected from January 2000 and April 2003, including around 1,000 endowment complaints that were rejected during the period of breach and which in practice is the number of customers who may have suffered loss.
According to the FSA important parts of the firm's guidance issued to its staff on the operation of its complaint handling procedures were inadequate.
In a number of the complaint cases examined by the FSA complaint handlers had conducted poor quality investigations and there was a failure to gather sufficient evidence to make a fair assessment of both the consumer's attitude to the risk and the suitability of the sale.
Andrew Procter, FSA's Director of Enforcement, said: "The fair treatment of customers does not begin and end at the point of clinching a sale. It applies to all aspects of the relationship between firm and customer including the fair handling of a customer complaint. Where firms do not deliver the required standards and fail to treat their customers fairly we will intervene."
In December 2003 the FSA fined Friends Provident Life and Pensions Limited £675,000 for mishandling of mortgage endowment complaints.
Five other firms have been fined £5.2 million in relation to mortgage endowments.
A further 19 firms, who have not been publicly disciplined, are reviewing their sales of mortgage endowments, said the FSA.
(SP)
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