A pensions and investments company owned by the tycoon, Sir Mark Weinberg, has been slapped with a £1.4m fine for failing to deal with customer complaints properly.
The breaches by Gan Life and Pensions relate to the 10-year period immediately pre-dating its purchase by Sir Mark's Life Assurance Holding Corporation in March 1998. The Financial Services Authority, acting under the powers of the Personal Investment Authority, said a deliberate change of policy at Gan had compromised its complaints handling procedure.
Gan told staff to focus only on specific complaints rather than assess the soundness of advice given in the sale of mortgage endowments. It also manipulated the number of cases referred to the industry ombudsman. Gan staff were also found to have sold 25-year plans as 10-year products.
However, the FSA said the Gan business had been acting in an open and co-operative manner since its acquisition by LAHC. Its new owner has paid £35.4m in compensation to 34,000 Gan customers and has set aside as much as £10m ahead of a review of a further 21,000 cases.
Peter Bibby, the FSA's head of regulatory enforcement, said: "The rules relating to complaints handling are an important element of investor protection. We will take seriously failures in complaints handling."
LAHC said it had taken immediate action, including the disbanding of its salesforce and terminating directors' contracts, to change practices and the culture at Gan from the moment of the acquisition.
John Wybrew, its managing director, said the firm had contacted all customers with affected policies. "This fine does not reflect upon the actions of LAHC. The PIA is satisfied that all appropriate action has been taken."
PIA's responsibilities will be formally taken over by the FSA from this Friday.Reuse content