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FSA probes providers over endowment compensation

It is believed that t he FSA is re-investigating some providers which have missold mortgage endowments because it does not think they are treating consumer complaints properly.

The news comes as a warning to providers which may be dragging their feet when it comes to awarding compensation to policyholders.

With many of the current mortgage endowment investigations coming to a close, it seems that there are still concerns at the FSA that even though companies have had rulings against them, they are not adequately dealing with the complaint and compensation process.

The last firm to be fined by the FSA for mortgage endowment misselling was Royal & Sun Alliance Life and Pensions, which was hit with a £950,000 pen-alty in April. Since then, there has been no news from the regulator on further fines or rulings. R&SA say it is not aware of any re-investigation.

ABI spokeswoman Emma Grainge says the FSA is constantly monitoring complaints and the processing of consumer compensation claims. She believes this action is targeted and not an industrywide response and that the FSA may be looking at IFAs as well as providers.

It also looks likely that there will be further endowment misselling findings in the near future, with of announcements expected in October.

FSA spokeswoman Jackie Blyth says: “We currently review how firms handle endowment compensation. If we find that firms are failing to deal with complaints appropriately, they will face disciplinary action.”

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