Guardian Assurance has been fined GBP 750,000 by the City watchdog for mishandling endowment mortgage complaints.
It’s the second largest fine imposed by the Financial Services Authority (FSA) for endowment complaint handling.
But Which? feels Guardian Assurance and its associated company Guardian Linked Life Assurance should have been hit harder.
The problems arose when Guardian introduced new procedures in January 2003 which the FSA say were not effective at making sure complaints were fairly and adequately investigated.
The number of complaints upheld by the company subsequently fell from 71 per cent in the second half of 2002 to just 22.6 per cent in the first half of 2003.
There was also a significant increase in the proportion of complaints that were rejected by the company but which were then upheld by the Financial Ombudsman Service.
The FSA say that between January 2003 and December 2004, 5,600 people had endowment complaints rejected when they may have been entitled to compensation.
The watchdog said that while Guardian was aware that the changes would significantly reduce the number of complaints, it failed to notify FSA about the problems.
Which? says the FSA has missed a golden opportunity in not hitting Guardian harder. Our Head of Campaigns Louise Hanson, said: ‘The behaviour of Guardian has demonstrated contempt for both its customers and the regulator.
‘It appears they deliberately introduced complaints handling systems that would treat their customers unfairly. Furthermore, they then acted irresponsibly by not alerting the regulator when the systemic problems became clear to them.
‘Given the breathtaking actions of Guardian, the regulator should have made a real example of this company and imposed a record breaking fine for poor complaints handling.
‘If the FSA is serious about getting companies to treat their customers fairly it must make examples of companies that treat their customers with such blatant disregard.’