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FSA blasts endowment firms over complaint procedures

The FSA has issued a warning to providers about their handling of endowment complaints, which it believes are being rejected too quickly to make case processing appear efficient.

It has written to mortgage endowment providers warning them not to use the Financial Ombudsman Service as an alternative to handling complaints properly themselves.
It wants firms to review complaint handling procedures and confirm they are appropriate or take necessary action. The FSA will monitor progress and says it is ready to act if it finds weaknesses that put consumers’ interests at risk.

Which? is calling on the FSA to force firms to reinvestigate all rejected complaints to determine whether they have acted reasonably.

FSA managing director, retail market, Clive Briault says: “We are concerned that the FOS is not only continuing to face a rising number of endowment complaints but is also upholding a very high percentage of complaints from some firms, suggesting that these firms may not be handling complaints properly. Firms should not manage their own caseloads by allowing an excessive number of complaints to flow through to the FOS.”

Which? head of campaigns Louise Hanson says: “We are astounded at the bad faith shown by companies which make millions of pounds of profit from consumers but are trying to wheedle their way out of paying compensation when it is due.”

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