The FSA imposed a public censure on the firm last week for serious failings in the way it handled mortgage endowment complaints. It says it would have faced a £400,000 fine if it were not for its financial position. It prohibited William John Pirie, the sole director, from carrying out any customer functions in regulated financial servicesPirie says delays in endowment complaint handling occ- urred after Mandrake comp- leted an MBO in 1996.
Former parent company Hambro Countrywide, now Balanus, retained responsibility for the pension review but Pirie says MAL took it to court in July 2005 for failing to conduct the review and won the case and an appeal in November 2006.
He says: “The effort involved in prioritising the court case and the pensioners delayed the processing of payment of endowment complaint awards.”
Pirie says by October 2007, payments on outstanding endowment complaint cases were up to date. He adds that the FSA’s decision to withdraw the company’s right to give decisions on complaints from August 2006 to March 2008 exacerbated any delays.
MAL’s cases have less than a 10 per cent uphold rate with the Financial Ombudsman Service. Pirie says the firm has saved the industry several million pounds by continuing to fight for clients when it could have simply fallen on the FSCS.
MAL has not done any new business for 20 years and Pirie says the firm continued to function in 2003 purely to ensure people affected by the pension review were not disadvantaged.
Pirie says: “The determination of MAL to honour commitments to clients ensured that pension review and endowment clients could be paid the full amount rather than the reduced amount that would have been paid if the awards had been administered by the FSCS.”