The fine was for mishandling complaints from customers who had been missold endowment policies. Abbey was found to have turned down complaints even when it did not have the paperwork. Its letters to victims used language calculated to discourage them.Abbey rejected complaints, only to capitulate the moment that its more robust customers threatened to go to the Financial Ombudsman Service. Meanwhile, it falsely assured the FSA that it was following the correct procedures. If Abbey had got away with this strategy, its “reward” would have been 19m – the amount its victims would have been short-changed, if it had not been caught out by the FSA’s monitoring team. Nor was Abbey’s penalty unique. In March 2004, the FSA clobbered Allied Dunbar to the tune of 725,000 for “serious flaws contained in its procedures for handling mortgage endowment complaints”. Four months earlier, the FSA fined Friends Provident some 675,000 for “failures in its procedures which led to the mishandling of mortgage endowment complaints”. These, lest we forget, were emphatically not fines for misselling – were that the case, then the list of companies affected would be several times longer, with the amount of fines running into many millions of pounds. No, this is “just” about companies using every trick in the book to avoid compensating those whom they had wronged. It is almost certain that many other life offices have been up to the same tricks or have contemplated using them, only for the fines to act as a deterrent. Under such circumstances, one might have thought that the Prime Minister and those serving in his Cabinet would be fully supportive of the FSA’s efforts in this sphere. Indeed, the regulator arguably needs to be 10 times sharper in catching and punishing the Abbeys of this world. Yet that is not what Tony Blair is doing at all. In a speech last May to the left-leaning Institute for Public Policy Research, the Prime Minister actually said: “Some- thing is seriously awry when â¦ the Financial Services Auth- ority that was established to provide clear guidelines and rules for the financial services sector and protect the customer against the fraudulent, is seen as hugely inhibiting of efficient business by perfectly respectable companies that have never defrauded anyone.” If the regulator had been hoping for some backing from Gordon Brown, forget it. The Chancellor is desperate to prove, for opportunist political reasons we can all guess at, that not a fag paper sits between himself and his boss – for the time being, at least. Brown released a statement suggesting that he stood full square behind Blair in his comments, despite having publicly praised the FSA’s work a week earlier. Meanwhile, showing the characteristic bravery and consumer-facing focus for which it has long been renowned, the ABI chimed in earlier this summer that it was preparing its own “list of concerns” raised by members about the FSA’s activities. Last week, Conservative Shadow Finance Secretary Mark Field got in on the act. Field claimed that “he is getting a number of complaints from City professionals” about the FSA’s regulatory burden on them. No, really? This man ought to stop prattling on to his City mates and talk instead to some real human beings, like the six million people whose home ownership dreams are in tatters after taking out an endowment. Or a few of the tens of thousands of investors, most of them elderly, who invested in precipice bonds or in supposedly low-risk split-capital investment trusts. Or just a handful of the millions who rushed headlong into personal pensions the last time Field’s party formed a Government – only for at least 1.4 million of them to find that their retirement income will be much smaller as a result, despite the compensation they belatedly received. As it happens, I agree with the demand from Field and LibDem Shadow Chancellor Vincent Cable for the full text of the letter from FSA chairman Callum McCarthy, replying to Blair, to be published. Unlike the Tories’ spokesman, I do not believe that the UK’s system of financial regulation is overbearing. If anything, it is too soft on the companies whose actions have made consumers’ lives a misery for too long. But if we are going to have a debate, let us have one out in the open, where everyone can chip in. Meanwhile, for those who, like Field, believe that there is mileage to be gained by kicking the FSA simply because their City chums like it, remember this – there are many, many times more misselling victims up and down the country. And they can kick back a lot harder at election times than his mates can.
The Pension Protection Fund board has taken responsibility for the Fraud Compensation Fund, which replaces the Pensions Compensation Board. The fund will provide compensation to occupational pension schemes that suffer a loss that can be attributed to dishonesty.
Glasgow-based Intelligent Pensions has doubled profits to 300,000 from 150,000 from fee income of 1.3m in the 12 months to its May 31 end of year.
Fidelity’s decision to split Anthony Bolton’s giant special situations fund into two funds with a UK and wider European remit has raised concerns from advisers. Star manager Bolton will eventually manage only one of the funds and Chelsea Financial Services managing director Darius McDermott says that he expects money to flow from the non-Bolton fund […]
Syndaxi Financial Planning director Robert Reid and Nicholls Stevens Financial Services principal Carole Nicholls have been appointed vice-presidents of the Personal Finance Society.
By Neil Jones Technical support manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. The treatment of non-UK domiciles that are resident in […]
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
Trump’s announcements of tariffs on steel and aluminium have led to a much greater focus on the risks posed by his presidency We have had a rollercoaster start to 2018. January saw a rapid rise in global equities before markets succumbed to a technically driven sell-off, recovered a little, and sold off again on the […]
Legal & General has appointed Mark Jones to the role of product director of UK protection, within its insurance division. Jones joins from Sun Life. He will be responsible for the developer of both retail and group protection products, and will report into the managing director for UK protection, Steve Griffiths. Griffiths says: “We are […]