Firms fined for altering complaints

18/01/12

By Nathan Walker

Two insurance firms owned by Royal Bank of Scotland have been fined by the Financial Services Authority (FSA).

The £2.17 million fine was handed down after the City watchdog found that staff working for Direct Line and Churchill had "altered improperly" complaint files.

The FSA requested 50 complaint files in April 2010, but was tipped off that some of the paperwork had been changed before being sent to them. Seven internal documents were found to contain forged signatures

Tracey McDermott, the FSA's acting director of enforcement and financial crime, said: "This is a serious breach. The firms failed to give clear instructions, resulting in staff making inappropriate alterations with one individual even forging the signatures of colleagues."

Paul Geddes, chief executive of RBS Insurance, said: "We very much regret the findings of the FSA investigation.

"Although no customers were disadvantaged, we are very disappointed that we did not meet the standards we expect of ourselves and which the FSA expects of us."

Because the firms both agreed at an early stage to settle the case, the FSA gave them a 30 per cent reduction on the fine, which would have otherwise totalled around £3.1 million.