Talking point: The blunders behind the RBSI fines

May 2009

The FSA carries out a review of RBSI’s complaints handling and tells the bank-owned insurer to buck up its ideas.

Alarmed RBSI directors introduce an electronic document called the Case Assessment Report (CAR) to improve complaints handling.

Feb 2010

FSA tells RBSI to provide a list of closed complaints between 1 February 2010 and 31 March 2010 that have gone through the new CAR procedure. The FSA would select a sample to review.

RBSI managers call in an accountancy firm to make an assessment, which reveals 28% of samples it investigated would fail the FSA’s review.

March 2010

200 customer relations staff attend conference calls in which management gives them eight days to review files and get them up to FSA standards. A file completeness review is called to review all the files between February and March, meaning that all its bases are covered and every file handed over to the FSA would have been checked.

BLUNDER NUMBER ONE: Five files are altered at the file completeness review stage. These alterations were made to the CAR document and in four cases included the addition of reference numbers and amendments to the dates noted in the file. In the last case, the CAR document was altered to detail that a fault with the way in which the policy had been sold to the customer had been identified and reported internally by the complaints handler.

April 2010

FSA tells RBSI of the specific 50 files it wants to sample.

BLUNDER NUMBER TWO: Yet more files are altered, this time on the specific 50 ones requested by the FSA. In total, 27 out of the 50 files were tampered with.

BLUNDER NUMBER THREE: FSA says that no specific instructions was given to staff at this stage not to alter the 50 documents.

June 2010

BLUNDER NUMBER FOUR: It emerges that seven internal documents contained forged staff signatures. A member of the customer relations team had forged signatures because they were under the impression that it was obligatory for the orginal case handlers signatures to be on the documents.

BLUNDER NUMBER FIVE: It later emerges that the FSA wanted RBSI to ensure that the 50 files were collated by individuals who had not worked on the files. Instead, people with previous experience of the files were picked to collate the 50 files.

January 2012

Direct Line and Churchill fined £2.17m by the FSA for failing to prevent files that the FSA had requested from being improperly altered.