This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+cover+small+180914
Categories:Regulation

FSA fines Scottish Equitable £2.8m plus £60m redress

  • Print
  • Comments (16)

The FSA has fined Scottish Equitable £2.8m for causing significant consumer detriment through poor administrative procedures.

Scottish Equitable will pay consumer redress of about £60m, of which £30m will have been paid by the end of the year. Scottish Equitable is the legal name for Aegon’s UK life and pensions business, which now trades under the Aegon brand.

In 2009, Scottish Equitable informed the FSA that it had identified around 300 issues relating to problems in administering its policies.

These problems included not issuing around 238,000 policyholder documents, incorrectly calculating guaranteed minimum pension payments and future benefits of 774 customers and failing to identify errors in calculating rebates to charges on pension policies for 25,000 policies.

The company also failed to match Department for Work and Pensions contributions to personal pensions for around 2,500 customers and failed to trace around 200,000 policyholders who had moved without informing Scottish Equitable of their new address.

The total consumer detriment is estimated to be £60m and Scottish Equitable is undertaking a redress programme to compensate customers who missed out on payments or benefits that they were entitled to or who were disadvantaged by its actions.

The FSA says Scottish Equitable has already started to compensate consumers and will have paid £30m in redress by the end of 2010.

Scottish Equitable qualified for a 30 per cent discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £4m.

FSA managing director of enforcement and financial crime Margaret Cole says: “The redress package is significant news for the customers of Scottish Equitable and I am pleased that £30m will already have been paid back by the end of the month.

“This case shows the importance of getting customer administrative procedures right and fixing them quickly when they go wrong. This is a key part of treating customers fairly.

“By letting the issues build up over such a long period Scottish Equitable  made it even more difficult to fix the problems and this led to delays in getting compensation to customers.”

Aegon says it fully accepts the FSA’s findings and is on target to resolve all five of the issues identified by the end of April 2011. It adds it expects the bulk of the remainder of the programme to identify and correct historical issues within its customer policy records to be completed by the end of 2011.

In a statement the provider says: “Aegon sincerely regrets that some customers have suffered financial detriment or inconvenience. Its redress programme aims to resolve all the issues as quickly as possible and is a top priority for the firm.”

  • Print
  • Comments (16)

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Readers' comments (16)

  • The FSA are clearly out of touch with everything. Regulation has taken over industry procedures and has made a laughing stock of the UK. David Cameron reiterated in his pre election speech that regulation is killing industry and is not letting people get on with their lives and as a result business is suffering. The financial services sector is a diabolical discrace, even clients are now complaining about the onerous paperwork that they have to complete, only to be told by the organisation that was set up to protect them(FSA) that this is what is required. Can somebody please have some common sense and save this sinking ship that is the UK financial services sector !

    Unsuitable or offensive? Report this comment

  • Surprise Surprise its FSA bashing time again.

    I dont know why there is any sympathy for AEGON SE as frankly their service standards are appalling. This is just the tip of the iceberg.

    A company who is only interested in "flogging" products cannot and should not survive in todays world.

    Unsuitable or offensive? Report this comment

  • @ Derek Campbell

    I fail to see how Scot Equitable's failings are somehow the result of the FSA? Looks like FSA have done their job here and customer detriment has been averted.

    Hell, a nice rant against FSA is justified at certain times, but this is not one of them!

    Unsuitable or offensive? Report this comment

  • If the FSA start charging life companies for poor service they will make a fortune.

    The level of service I experience from most companies is nothing short of a disgrace and most of the staff could not care less.

    as for 5 star awards these are a joke, I have had many companies asking me if I would vote for them, with little thought to the actual service they provide.

    the whole way of arranging products for clients needs to be simplified, just getting clients to complete multiple bits of paper is not the way forward. Simplified products, higher qualifications and more emphasis on the advice provided and not the number of pieces of paper.

    The next thing they could do is start charging the banks for poor service, now that is a way to start making money.

    Unsuitable or offensive? Report this comment

  • Totally agree with sandyb !

    Unsuitable or offensive? Report this comment

  • Not issuing 238,000 documents? Errors on 25,000 policies?

    The insurer has got off light. The FSA closes down IFAs for less.

    Then very few IFAs would be likely to employ ex FSA staff: or is that cynical?

    Unsuitable or offensive? Report this comment

  • Lets all be honest with each other here, ASE througherly deserved the fine imposed on them by our regulator and I understand that they have taken that on board, but, what they have done (and were puuting right themselves by the way) pales into insignificance to what our regulator has done and is still doing to all in our industry ....... will they fine themsevles and by how much????

    Don't hold your breath on that one eh!

    Unsuitable or offensive? Report this comment

  • Should be enough for another few christams parties though!!

    Unsuitable or offensive? Report this comment

  • At last the FSA are taking action against firms that do not have the right level of staffing and systems in place.

    When are they going to start fining the big Banks for the same thing. I have a SIPP loan case at present with one of the big four 2 months in the pipe line no response reason given LACK OF STAFF.

    Unsuitable or offensive? Report this comment

  • I acknowledge some of the good done by FSA but when will they fine themselves for their delays, their ineptitude and their creation of beauocracy second only to the political quagmire?

    Unsuitable or offensive? Report this comment

  • Very little support here for Scot Eq and plenty for FSA. Apart from paying for the Xmas party what has FSA achieved? FSA would have been far better to have assisted Scot Eq. It would be good to hear the Scot Eq side of what has gone on. Have found Scot Eq to be one of the more IFA friendly companies.

    Unsuitable or offensive? Report this comment

  • This is a real 'Catch 22' situation - there is so much bureaucracy, complexity and paperwork, much of it instigated by the FSA that mistakes are inevitable. With everything run by computers, a tiny error immediately affects thousands of people. I'm not excusing Aegon here, just saying that regulation is strangling the life blood out of financial services. We all need protection, pensions savings etc., but it's becoming increasingly difficult to understand, so we don't bother!

    Unsuitable or offensive? Report this comment

  • Surely this is an example of what the FSA should be doing!

    In this case it is clear that ASE failed in some of their basic administration processes. I meantime "losing" 200,000 customers, not sending 238,000 policy docs and failing to match 2500 DWP PPP contributions are not regulatory "burdens" they are legal obligations!

    Come on guys for once give the FSA some credit stepping in and forcing a poor administered provider to compensate their (and your) clients and working with them to fix the problem.

    Unsuitable or offensive? Report this comment

  • The FSA didn't 'step in' . AEGON effectively reported themselves and instigated remedial measures - for which they deserve immense credit.

    Unsuitable or offensive? Report this comment

  • Get real folks. The FSA have created some much beaurocracy (like the 1st post said) that e now everyone has a mountain of sh*t to deal with before actually doing any business. In defense of Scot Equit as soemone already said as well they are IFA friendly. But they have sat on the sidelines far too long and now they are also gettting in the neck. Roll on Andrew Tyrie and kick ar*e at the Leviathan. It's way overdue as all this rubbish is being passed down to the consumer who doesn't trust anyone anymore thanks to the great sea monster still on the loose.

    Unsuitable or offensive? Report this comment

  • I have been dealing with Scot EQ Complaint's Dept for the last 6 months and I can tell you that these fines have not change their corporate culture of procrasination, deception and LIES that are an insult to a customer.
    They are 3rd Div North when it comes to professional, honest standards.
    AVIOD THEM AT ALL COSTS....

    Unsuitable or offensive? Report this comment

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick



Poll

Have you heard of cases of advised sales being disguised as execution-only?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments