FSA fines Allied Dunbar £725,000

The UK City watchdog has fined Allied Dunbar, a unit of Zurich Financial Services, £725,000 (€1.07m) for ''serious flaws'' in the way it has handled mortgage endowment complaints.

The FSA said it identified flaws in the company's procedures for handling mortgage endowment complaints, which "exposed a large number of its customers to potential loss", between May 2001 and April 2003 .

The FSA said complaint handlers had failed to gather sufficient evidence to make a fair assessment of both the consumer's attitude to the risk and the suitability of the sale.

The company is now voluntarily reviewing complaints rejected from January 2000 and April 2003, the FSA said.