The Financial Services Authority has fined two insurance companies owned by the Royal Bank ofScotlandover £2.5 million for making changes to the files they submitted as part of an investigation into the way firms handled complaints from customers.
Of the 50 files that Churchill and Direct Line submitted to the FSA, more than half were found to have been doctored some time after the financial ombudsman had announced it was launching an investigation into the way the insurance firms were handling complaints.
In many cases, the alterations were minor – making numerical or grammatical corrections – and did not change the substance of the complaint or the way it had been handled; but in several of the files examined by the FSA, signatures had been forged on memos that were created after the complaint had been closed and documents had been added immediately prior to the paperwork being sent for investigation.
The FSA was especially critical of RBS itself for informing over 200 staff in a conference call that an investigation into the complaints procedure was to be launched, asking that all relevant files be up to a standard that would pass the inspection. It was suggested that RBS bosses were either deliberately or inadvertently encouraging staff to tamper with the documents that were passed on the FSA.
Royal Bank ofScotlandwas being investigated as part of a wider examination of the insurance industry. During the first part of the process, over a quarter of their complaints were found to have been unsatisfactorily dealt with and the RBS management was then told that a further 50 files would be examined in detail. It was at this point that staff were invited to the conference call that has caused such problems for the financial institution.
The chief executive of RBS Insurance, Paul Geddes, insists that the company had already learnt from the findings of the first FSA investigation and added that the they will be happy to implement any new directives.