Guardian Assurance and Guardian Linked Life Assurance have been fined £750,000 by the Financial Services Authority (FSA) for serious flaws in its mortgage endowment complaints.
The financial watchdog found that new procedures introduced by Guardian in 2003 were neither appropriate of effective in ensuring that mortgage endowment complaints were fairly investigated.
This negligence continued until December 2004, exposing 5,600 customers whose complaints were rejected during the period to the risk of financial loss.
It was found Guardian failed to properly identify these problems and did not notify the FSA about its concerns.
Margaret Cole director of enforcement at the FSA said: "Guardian failed to treat its customers fairly by exposing those with a valid complaint to the risk that their complaint could be rejected inappropriately. Consequently, they may not have received the compensation to which they were entitled.
"The relatively large size of the firm's mortgage endowment customer-base meant that these failings exposed a high number of consumers to potential financial loss."
In response to the fine, Guardian said in a statement it "is reviewing all endowment complaints rejected during the relevant period and will ensure no customers have been disadvantaged by the previous approach".Click here for more information on mortgage
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