Abbey faces fine for mis-selling endowment policies

Banco Santander-owned Abbey is bracing itself for an expected FSA fine over its endowment mortgage complaint procedures.

This news follows the company releasing details of figures for anticipated claims relating to endowment mis-selling.
The company has set aside £154m from its 2004 budget for these liabilities according to media relations manager for Abbey, Matt Young.

Although insurers and the FSA have now been handling mis-selling complaints for in excess of three years there has yet to be any let up in the number of people complaining.

Complaints to the Ombudsman are likely to pass 65,000 in the year to April 2005.

The current threat of penalties by the FSA brings a new period of punishing providers for both mis-selling endowments and for mishandling the complaints. While the ombudsman is reported to typically uphold 45% of endowment complaints, this level is known to rise to as high as 80% for some providers.

To date there have only been two firms fined, Allied Dunbar and Friends Provident - both of which were fined £700,000.

A fine of this level is small change for a firm the size of Abbey; a company valued in excess of £9 billion.

Apr 12, 2005
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