Endowment mortgage complaint failures could have increased rejection risk
A recent ruling by the FSA found failings in mortgage endowment complaints handling by Mandrake Associates Limited increased the risk that endowment mis-selling complaints were either wrongly rejected or delayed. Due to his mishandling of endowment mortgage complaints the Firms sole director is also prohibited from engaging in any customer functions in regulated financial services received by Mandrake.
MAL , established over thirty years ago as a firm of IFA’s, provided advice on products including endowment mortgages. The primary responsibility for managing endowment mortgage complaints was held by the sole director, Mr Pirie. Of 2,127 complaints from customers alleging that that MAL had mis-sold them an endowment mortgage, the Firm concluded and rejected 624 and upheld none. By October 2006, it had a backlog of 1,089 complaints to conclude which had been outstanding for an average of 18 months.
The FSA’s public censure of MAL outlines a number of failures in its mortgage endowment complaint procedure which it states increased the “risk of the rejection and/or delay of potentially valid complaints”. These included failing to ensure that its mortgage endowment complaints handling procedures were operating effectively and failing to finalise complaints within a reasonable time.
Margaret Cole of the FSA said “Firms must have in place and operate an effective complaints handling system as a key part of treating customers fairly. MAL’s endowment complaints handling failings were systemic, lasting for four years and meant consumers who had been mis-sold endowments were at risk of not receiving compensation at all or only after long delay.”
