Abbey landed with $1.4 m fine

Mortgage lender Abbey has been fined £800,000 ($1.47m) by the City watchdog for mishandling complaints from its customers over endowment policies.

The Financial Services Authority (FSA) also said Abbey gave the regulator inaccurate information while failing to treat its customers fairly.

The FSA said Abbey mishandled about 5,000 complaints between October 2001 and September 2003.

Abbey has recently come under the ownership of Spanish bank Santander.

The FSA said Abbey would have been in line for a far higher fine if Santander had not acted quickly to address the problem.

The FSA said that during the period in question Abbey rejected 3,500 complaints that should have been upheld.

“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, the FSA’s director of retail markets.

Abbey said it accepted that its complaint procedures for endowment products were inadequate and said it was reviewing all complaints from the period and would pay compensation where appropriate.

“Abbey takes this extremely seriously and continues to fully review its complaints handling policies and procedures,” said a spokesman for the bank.

Abbey said it was re-evaluating about 50,000 complaints made over the past five years and would be writing to the customers affected by 22 June.