Company: Allied Dunbar Assurance plc

Fine Amount: £725,000

Date: 19th March 2004

Allied Dunbar were fined £725,000 for ’serious flaws’ found in their procedures for handling endowment complaints during the period May 2001 to April 2003.

Around 1000 complaints were rejected during that period, putting the customers at risk of financial loss through incorrect rejections of genuine complaints.

Many failings were found in the company’s complaints procedures:

• Complaint handling staff were poorly trained and not given clear enough guidelines on acceptable evidence and how it should be weighted in making a decision
• Contradictory guidance was given to staff within a period of only 2 months
• Assumptions were made that previously held endowments or other investments represented sufficient evidence that the customer understood the risks
• Management monitoring of the complaints handling systems was inadequate
• There was a tendency to give undue weight to statements made by sales advisers when they differed from the customers’ version of events

Allied Dunbar, however, co-operated fully with the FSA’s investigation and has introduced new procedures in addition to reviewing all rejected complaints between January 2000 and April 2004.

Read FSA Press Release