Guardian Assurance and Guardian Linked Life Assurance have been fined £750,000 by the Financial Services Authority after they found 'serious flaws' in their mortgage endowment complaint-handling procedures. The authority found that Guardian introduced procedures that were neither appropriate nor effective, and exposed 5,600 customers to financial loss by December 2004. Guardian were aware that the changes it made to its procedures would be likely to reduce the number of complaints upheld. After the changes were introduced, complaints fell from 71% to 22.6%. The Financial Services Authority believes that the company failed to treat its customer fairly. This is the second biggest fine imposed by the authority over endowment complaints. Abbey were fined £800,000 last year, while Allied Dunbar received a £725,000 two years ago.
Our view:
If providers or financial advisers make mistakes in procedures - the FSA does come down hard.