05/01/2005
Britain's biggest mortgage endowment providers have been rapped for using the industry ombudsman as an alternative to handling mis-selling complaints properly themselves.
The criticism comes in a letter from Financial Services Authority managing director of retail markets Clive Briault, saying some firms are "failing to meet the required standards".
"We are concerned, in particular," he writes, "that the Financial Ombudsman Service 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 ombudsman."
Mr Briault says some endowment firms have "repeatedly turned down complaints" on grounds that appear "only very slightly different to those used in connection with earlier batches of complaints which the ombudsman upheld".
Complaining of "inconsistencies in some firms' decision making", he writes: "Such behaviour is not in keeping with the spirit or letter of our requirements."
The letter comes 30 months after a warning over endowment complaints by John Tiner, who was then FSA managing director but is now chief executive.
Mr Briault wants firms to review their complaints handling and confirm policies are appropriate or take necessary action.
Last March, the FSA fined Allied Dunbar Assurance £725,000 for "serious flaws" in its complaints-handling processes.
Louise Hanson of consumer magazine Which? said: "We are astounded at the bad faith shown by companies who make millions from consumers but are trying to wheedle their way out of paying compensation when it's due."
Complete article here: Telegraph Money.
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