Sesame fined £330,000 by FSA for scarps failures

LONDON – The Financial Services Authority (FSA) has fined Sesame Limited £330,000 for failing to treat its customers fairly by not handling complaints concerning Structured Capital At Risk Products (SCARPs) appropriately.

The problems with Sesame's complaints handling were found as part of the FSA's thematic review of SCARPs during March and August 2004. The FSA discovered that Sesame incorrectly rejected complaints from approximately 350 customers between March 2003 and October 2004, resulting in a loss of £5.9 million for the customers involved. The complaints related to sales made by Sesame's legacy networks.

After the FSA identified the problems, Sesame took action to ensure all affected customers were compensated, and contracted external advisers to review its SCARPs complaint handling procedures and train its staff. If the firm had failed to co-operate or provide adequate commitment to mitigation and remedial action, the penalty would have been substantially higher, the FSA confirmed.

"Sesame has no excuse for complaints handling failures of this kind, not least because the FSA had already issued a number of publications concerning both SCARPs and complaints handling. The failings we found highlight the need for firms to implement and maintain robust complaints handling procedures and to train staff adequately," said William Amos, head of retail enforcement at the FSA.