City watchdog, the Financial Services Authority (FSA) penalised the Abbey National Plc for the mistreatment of complaints related to its endowment mortgages.
Abbey National has been accused of mishandling as many as 5,000 complaints that it received during October 2001 and September 2003 regarding problems with its endowment mortgages. The FSA stated that Abbey dismissed an astounding 3,500 applications, which seemed quite valid for obtaining due financial redress from the bank.
Fining the banking group of £800,000, the City regulator noted that according to industry averages, those 3,500 complaints that were ignored stood to lose £19m in the event of a refusal of a compensation. Since the fine was announced a UK tribual has subsequently reduced it by £225,000 down to £575,000.00
Abbey National, however, has taken the cue quite seriously and is reviewing about 50,000 endowment complaints that were shown the door. Although it did not divulge how much the reimbursements would exactly cost, Abbey confessed that an additional £204m could be consumed in the process. Nevertheless, the FSA acknowledged Abbey’s Spanish Owners, Banco Santander for standing by and offering full assistance in the matter and revealed that the fine imposed on Abbey could have been much heftier had it not been for Santander’s support and co-operation in its inquiry. Banco Santander took over Abbey National in November for £9.6billion.
Abbey that owns life insurance companies, Scottish Mutual, Scottish Provident and Abbey National Life all of which provide endowments, agreed that it had not dealt with endowment complaints aptly, and said that it was deeming the verdict “extremely seriously.”
FSA’s retail market director, Clive Briault remarked, “By putting its own interests ahead of those of its customers with a mortgage endowment complaint, Abbey has singularly failed to treat its customers fairly. Its failings were made more serious as they occurred at a time when there was a high level of awareness within the industry about mortgage endowments and concerns regarding the fair handling of complaints.”
Abbey was also blamed for furnishing wrong and deceptive information to the FSA in its reply to one of the regulator’s “dear chief executive” letters, in which FSA chief executive John Tiner wrote to Abbey about endowment complaints.
Posted
on : Fri, 27 May 2005 08:10 GMT | Mortgages News
By : Anne Philips
|
