Although Abbey has not denied it is facing another fine, it said: “We speak to the FSA on a whole range of issues on a regular basis but we never disclose the details of any discussions we have with the regulator.
“The FSA has publicly stated it has written to CEOs to ask them about their handling of mortgage endowment complaints so you can reasonably expect this topic would be one of the things we speak to it about.”
The FSA also refused to confirm or deny that it is to fine Abbey.
Abbey has a chequered history concerning endowment selling.
In December 2002 the regulator fined Abbey Life £1 million for mortgage endowment mis-selling and other deficiencies in its compliance procedures and controls between 1995 and 1999.
Between 42,000 and 46,000 mortgage endowments and 3,000 to 4,000 other customers may be due compensation currently, estimated to be between £120 million and £160 million.
In March 2003 it was fined £750,000 for mortgage endowment failings and a further £950,000 in the same month, again for endowment failings.
Plus in March 2004 it was fined £725,000 by the FSA for mishandling mortgage endowment complaints.
Brian Foster, former principal of Kingswood Mortgage & Investment Services who has 30 years’ experience in endowments and TEPs, commented: “Abbey has the money to set up the proper procedures so I don’t have much sympathy for institutions that may not be dealing with procedures that are laid down for them.
“But whether complaints from consumers are justified is a separate issue. A lot of endowment complaints are spurious.”
Kevin Morgan, managing director of Consilium Financial Planning, said: “I’m not surprised by this and wouldn’t be surprised if other big lenders are currently being investigated by the FSA for endowment mis-selling.
“More often than not complaints can be upheld on technicalities such as the advising company not complying with appropriate risk warnings.”
