FSA imposes public censure on Mandrake Associates and prohibits director for failings in mortgage endowment complaints handling
21st July 2008The Financial Services Authority (FSA) has imposed a public censure on Mandrake Associates Limited (MAL) for serious failings in the way it handled mortgage endowment complaints. As a result, there was an enhanced risk that endowment mis-selling complaints were either wrongly rejected or delayed.
The FSA has also prohibited William John Pirie, the firm's sole director, from carrying out any customer functions in regulated financial services due to his mishandling of endowment mortgage complaints received by MAL.
Margaret Cole, Director of Enforcement at the FSA, said:
"Firms must have in place and operate an effective complaints handling system as a key part of treating customers fairly. MAL's endowment complaints handling failings were systemic, lasting for four years and meant consumers who had been mis-sold endowments were at risk of not receiving compensation at all or only after long delay.
"Firms who fail their customers in this way will face enforcement action. MAL would have faced a fine of GBP400,000 if it had not been for its current financial position."
The FSA found that MAL, under Mr Pirie's oversight:
- failed to ensure that its mortgage endowment complaints handling procedures were operating effectively, failed to provide adequate resources for the handling of mortgage endowment complaints and failed to ensure that complaint handling personnel were trained to carry out fair investigations;
- failed to finalise the complaints that were dealt with, within a reasonable time and failed to provide complainants with updates about the progress of investigation in a timely fashion; and
- failed to co-operate fully and promptly with the directions of the Financial Ombudsman Service.
The FSA has taken into account that MAL has undertaken to engage a suitably qualified and independent consultant to assess an ongoing sample of its mortgage endowment complaints decisions and to resolve its current outstanding mortgage endowment complaints within 12 months.
