Some 50,000 Abbey customers will have their rejected complaints over endowment misselling reviewed after the lender was found guilty of mishandling the grievances.
Abbey, now owned by Spanish bank Santander, was fined pounds 800,000 by the City watchdog, the Financial Service Authority (FSA), last week for maladministration and for supplying the regulator with 'potentially misleading' information.
The FSA found that, between 1 October 2001 and 30 September 2003, Abbey mishandled 5,000 complaints out of 20,044 considered, and rejected 3,500 of these when they should have been upheld. The other 1,500 mishandling cases related to incorrect levels of compensation or delays.
'By putting its own interests ahead of those of its customers with a mortgage endowment complaint, Abbey has singularly failed to treat its customers fairly,' said Clive Briault (pictured below), the director of retail markets at the FSA.
Endowment policies were sold heavily in the 1980s and 1990s as a way of paying off a mortgage at the end of its term " and leaving a tidy lump sum for the borrower too.
However, the failure of advisers to point out the risks of stock market falls, and the possibility of endowments not paying out the stated sum, has led to a flood of mis-selling claims.
The FSA also reported that between 1 January 2001 and 31 December 2004, Abbey had received roughly 65,000 mortgage endowment complaints in all.
Although the bank said that it had not launched a detailed investigation into every three-month period of this four-year spell, it accepted it was likely that similar levels of failure would have occurred throughout. Abbey said it would now review all mortgage complaints from 1 January 2000 " a total it put at around 50,000 because some have already been resolved " and pay redress where appropriate. It will write to those customers affected by 22 June to explain its actions.
Abbey is also to re-examine its overall handling processes.
The bank's supply of 'potentially misleading' information relates to the months of April and May in 2002, when it told the FSA that it was already applying advice given to it by the regulator regarding the complaints- handling process. A subsequent FSA investigation found that this was not the case, and described the lender's behaviour as 'unacceptable'.
Last week's fine was handed out more than a year after the Treasury Select Committee suggested that the number of endowment policies mis-sold in the UK could possibly be as high as 50 per cent.
Cash in a flash
The time taken to transfer money electronically from one bank account to another is to be cut from three days to one.
The clearing changes, to be implemented by a taskforce spearheaded by the Office of Fair Trading (OFT), will put an end to the current delay that enables the banks to pocket pounds 30m in interest every year, according to the OFT
At the moment, money that disappears from your account to settle bills and standing orders, or to pay for goods over the telephone or internet, is taken out of your account immediately. …