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750K endowment fine for Guardian slammed as ‘too lenient’

Aegon-owned Guardian Assurance and Guardian Linked Life Assurance have been fined 750,000 by the FSA after it found serious flaws in their mortgage endowment complaint-handling procedures.

The fine is the second- biggest imposed by the FSA over endowment complaints. Abbey was fined 800,000 last May while Allied Dun- bar received a 725,000 fine in March 2004.

But market commentat- ors believe that the latest fine does not reflect the severity of the offence. Consumer lobbyist Which? says the FSA should have made an example of Guardian, given what it calls its “breath-taking actions”.

The FSA found that Guar- dian introduced procedures that were neither appropriate nor effective and exposed 5,600 customers to financial loss by December 2004.

Guardian was aware that the changes it made to its procedures would be likely to reduce significantly the proportion of complaints which it upheld and, following their introduction, the number of complaints it upheld plummeted from 71 per cent in the second half of 2002 to 22.6 per cent in the first half of 2003.

FSA director of enforcement Margaret Cole says: “Guardian failed to treat its customers fairly by exposing those with a valid complaint to the risk that their complaint could be rejected inappropriately.”

Adam Samuel Training & Consulting principal Adam Samuel says: “No individual has paid the price for adopting or designing the processes concerned. This is a dis- grace that the FSA needs to explain urgently.”

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