FSA fines RBS-owned Churchill and Direct Line £2.17m
Wednesday, 18 January 2012 01:02
Fines have been issued to insurers Direct Line and Churchill by the Financial Services Authority (FSA) as a result of the companies having made changes to closed complaint files.
In February 2010, the FSA requested 50 files from the two companies - both owned by Royal Bank of Scotland (RBS) - for review in order to assess their effectiveness at resolving complaints.
When it received them in April 2010, it also was provided with intelligence suggesting alterations had been made to the cases before they were submitted for FSA regulation.
FSA inspectors visited the firms' offices at short notice in June 2010 and discovered that 27 out of 50 documents had been changed before they were sent away, while seven contained signatures forged by members of staff.
Although none on the changes resulted in detriment to customers, the FSA issued a fine of £2.17 million to Direct Line and Churchill, which has now been passed on to RBS.
FSA spokesperson Tracey McDermott said: "This is a serious breach. The firms' attempt to ensure that complete files were provided to the FSA backfired.
"The significant penalty is intended to underscore to firms that it is of critical importance that material provided to the FSA must reflect the picture as it is - not as they might like it to be."
Last month, chief executive of Barclays Bob Diamond revealed that bonuses for its bankers may be cut to reflect and pay for the £1 billion fine the institution received for mis-selling loan insurance.
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