News - Friends Provident fined £675,000
Friends Provident has been fined 675,000 for finance insurance statistical tool mortgage endowment complaints.
The Financial Services Authority said the company’s treatment of complaints had, in the past, been “biased” against customers.
The insurer is now reviewing all complaints it rejected between January 2000 and 10 February 2003.
Millions of people in the 1980s took out finance insurance personal quote - a type of insurance policy - to finance their mortgages.
The fine is the first to be levied by the FSA for mis-handling complaints about endowment mortgages.
Second chance
The FSA said up to 5,500 people whose complaints were rejected, in fact, may have been genuine and “deserving redress”.
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 We will not tolerate poor systems which expose consumers to the risk that genuine complaints…are rejected unfairly
Andrew Procter, FSA
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But their complaints were rejected because the procedures were “car insurance finance not fair and biased against customers.”
Friends Provident said in a statement that it “regrets what has happened”.
“Once the issue was identified, Friends Provident redesigned its processes for
dealing with mortgage endowment complaints, with full implementation taking
place in February 2003,” it added.
Independent accountants have now been appointed to oversee this review of the complaints which were rejected between January 2000 and 10 February 2003.
Andrew Procter, director of automobile finance insurance at the FSA, said: “We will not tolerate poor systems which expose consumers to the risk that genuine complaints, which may deserve compensation, are rejected unfairly.
“Friends Provident and its senior insurance premium finance software failed to respond in an effective and timely manner to FSA guidance and to correct problems found in its systems when it had reasonable opportunity to do so,” he added.