Money News: Insurer that moved endowment goalpost is fined £750,000

Guardian Assurance and Guardian Linked Life Assurance have been fined £750,000 by the Financial Services Authority for "serious and systemic" flaws in their handling of customer complaints about endowments.

Failure by the life companies - owned by the insurer Aegon UK - to draw the City regulator's attention to problems also played a part in the fine.

The penalty relates to a period between January 2003 and December 2004 when Guardian introduced new rules for customer complaints. During this time, 5,600 complaints about endowments were rejected out of 11,568.

According to the FSA, the company knew that its changes would "be likely to significantly reduce the proportion of complaints [it] upheld". The number of endowment mis-selling claims upheld by Guardian dropped from 71 per cent in the second half of 2002, to 22.6 per cent in the first six months of 2003.

There was also a "significant increase", from April 2003, in the percentage of endowment complaints rejected by Guardian that were later upheld when taken to the Financial Ombudsman Service.

Crucially, the company failed properly to identify problems with its complaints procedure and to notify the regulator, the FSA said. The matter came to light only during an FSA visit in late 2004.

"Guardian [exposed] 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,"said Margaret Cole, director of enforcement at the FSA.

Guardian is reviewing all rejected complaints and assured the FSA that compensation would be paid where due.

Last year, the mortgage bank Abbey was fined £800,000 for mishandling endowment complaints.

Consumer rights: Unhappy holiday? Help is at hand

Compensation for holidays from hell should be easier to secure after the Association of British Travel Agents (Abta) launched a new consumer code of practice to protect holidaymakers.

Approved by the Office of Fair Trading (OFT), the code will guarantee easy access to an arbitration process to settle disputes for any consumer using a travel agent or tour operator belonging to Abta.

Complaints made by disgruntled holidaymakers typically involve shoddy accommodation, resorts that don't match the description in brochures, and muddled travel arrangements.

In 2004, UK holidaymakers made 64.2 million trips abroad, 20 million of them on package holidays. Abta members sell 90 per cent of all package tours in the UK.

"Our code sets down standards that guarantee best practice within the industry," said an Abta spokesman.

Separately, the telecoms regulator Ofcom is to publish a consumer guide on the cost of phoning home on a mobile phone while abroad.

It will highlight charges as high as £3 for a four-minute call from the Continent. Britons pay far more than users in other countries.

In October, an EU website revealed that a British tourist spends 50 per cent more on calls made and received on a mobile in Italy than his French counterpart.

Tax returns: One million will miss Revenue deadline

An estimated one million workers will fail to meet this year's 31 January deadline for filing their tax returns, according to the accountancy firm Smith & Williamson (S&W).

An automatic £100 fine awaits anybody who fails to deliver their tax forms for the 6 April 2004 to 5 April 2005 financial year. Persistent late offenders could be hit with further penalty charges.

Last January, delays by individuals saw HM Revenue & Customs gifted nearly £100m.

"It's not just a £100 fine that taxpayers need to contemplate," said Francesca Lagerberg, tax specialist at S&W. "There's interest and surcharges on unpaid tax, as well aspenalties of up to £60 a day where [the taxman] has taken the matter before the tax commissioners."

Fines will also be levied as a result of errors made on tax forms: as much as £308m could be wasted in this way this year, according to research from IFA Promotion, a marketing body for financial advisers.

Tax returns must be filed by the self-employed, higher-rate taxpayers and anyone with capital gains or income that has not been taxed at source - for example, rental income from a second home.

To request a form, call the self-assessment helpline on 0845 900 0444 or visit your local tax office.

Base rate decision: Bank holds back the big spenders

The cost of borrowing has remained at 4.5 per cent for the fifth month in a row.

On Thursday, the Bank of England said interest rates would stay on hold. The base rate last fell in August, when it was lowered by a quarter of a percentage point from 4.75 per cent.

The lack of movement had been widely anticipated by City analysts, economists and industry. A further fall in rates might have encouraged consumer spending - seen as undesirable, with inflation above target and reports from major retailers such as Marks & Spencer indicating some buoyant seasonal trading.

Most expect the Bank to digest more spending data from Christmas and the New Year before making any change in rates.