Taxpayer to be left with bill over insurance tampering fines

Thursday 19th January 2012

The taxpayer will effectively be left to pick up the tab after the FSA announced that it is fining Direct Line and Churchill £2.17m for tampering with files.

Both of the insurance firms are now owned by RBS, which is 84% owned by the taxpayer.

The FSA had requested 50 complaint files for review, but on receiving them, it had intelligence that some of them might have been doctored.

The FSA then visited the insurance firms’ offices at short notice and found that 27 files were altered improperly because, says the FSA, the firms had failed to act with due skill, care and diligence. Most of the alterations were, however, minor in nature. Seven of the documents were found to contain signatures forged by one member of staff.  

The two firms agreed to settle the case at an early stage and therefore qualified for a 30% discount. Without the reduction, the FSA fine would have been £3.1m.