The Financial Services Authority (FSA) has
imposed a fine of £2.17 million on Direct Line Insurance and Churchill
Insurance for failing to prevent files that the FSA had requested from being
improperly altered.
During the collation of 50 complaint files
requested by the FSA for review, 27 were altered improperly before they were
submitted because the insurers failed to act with due skill, care and
diligence. The majority of the alterations were minor in nature and none of the
changes resulted in any customer detriment.
Direct Line and Churchill are owned by the Royal
Bank of Scotland Group.
In April 2010, the FSA received 50 files for
review. At around the same time, the FSA
received information that some of those files may have been altered or created
and so, in June 2010, it visited the offices at short notice. Following a detailed internal investigation,
it was revealed that 27 of the 50 files had been altered before they were sent
to the FSA, and seven internal documents were found to contain staff signatures
forged by one member of staff.
Tracey McDermott of the FSA says,” This is a serious breach. The
insurers failed to give clear instructions resulting in staff making inappropriate
alterations with one individual even forging the signatures of colleagues. The
significant penalty is intended to underscore to insurers that 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."
