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RBS Insurance firms fined for tampering with files

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by Jan Harris
RBS Insurance firms fined for tampering with files

Insurance firms Direct Line and Churchill have been fined for making alterations to files before submitting them to the Financial Services Authority (FSA).

In 2010 the regulator asked for 50 files to be submitted so that it could assess how the firms handled customers’ complaints.

The request was part of an ongoing inquiry by the FSA into financial firms’ complaint procedures.

Before the files were submitted, managers at both Direct Line and Churchill appointed external accountants to review a sample of complaints, and were advised that 28% were not likely meet the FSA’s required standard.

The two companies therefore instructed staff to check that the closed complaints were completed properly but this led to inappropriate alterations being made.

It was discovered that one employee had forged the signatures of colleagues in an effort to improve the data.

Although the changes were found to be minor and were not to the detriment of customers, the FSA imposed a £2.17m fine on the firms.

Tracey McDermott of the FSA said: “The firms’ management did not know what changes had been made or when [but] it is of critical importance that material provided to the FSA must reflect the picture as it is – not as they might like it to be.”

Paul Geddes, CEO, RBS Insurance said: “We very much regret the findings of the FSA investigation”.

RBS Insurance, which includes Green Flag and Privilege brands as well as Direct Line and Churchill, is being sold by RBS under European regulations.

Earlier this month the company appointed Rick Vlemmiks as chief marketing officer to oversee the restructuring of its insurance brands in order to strengthen their individual identities.

Mr Vlemmiks was formerly commercial director at British Gas.

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News posted: January 18, 2012

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