Two major insurers have been hit with massive fines for interfering with customer complaints.
Churchill and Direct Line both tampered with files that were due to be passed on to the Financial Services Authority. The changes were described as "inappropriate alterations" and involved staff acting without management authorisation adding details to the paperwork in a misguided attempt to make the files more complete. In one case a staff member forged the signatures of colleagues.
The FSA says most of the changes were minor and that none of the alterations caused any damage to customers. However, it said this was a clear breach of the requirement for firms to act with "due skill, care and diligence." The FSA's enforcement chief noted that "material provided to the FSA must reflect the picture as it is -- not as they might like it to be."
Both firms were fined £2,170,000; the actual fine was £3.1 million, but they received a 30 percent reduction for an early settlement. The size of the fines was intended as a serious deterrent rather than reparation for actual damages caused.