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The – RBS owned – insurers, Direct Line and Churchill have found themselves at the receiving end of a £2.17m fine after it was discovered that they had tampered with customer complaint files before submitting them to the Financial Services Authority (FSA).

The FSA have stated that the alterations made were only “minor” and that they had not affected any customers in doing so, however, by doing so they have still committed a serious breach of its rules.

The FSA have commented on the actions as an “attempt to ensure that complete files were provided to the FSA” and that the plan had simply “backfired” on the firms.

A spokesperson for the FSA, Tracey McDermott shed a little more light on the exact nature of these actions, saying: “The firms failed to give clear instructions resulting in staff making inappropriate alterations with one individual even forging the signatures of colleagues.”

She continued to say that: “The firms’ management did not know what changes had been made or when [but] it is of critical importance that material provided to the FSA must reflect the picture as it is – not as they might like it to be.”

The file-tampering took place when the insurers tried to deal with the FSA’s continuing inquiries, which have now been underway for the past three years, into the way financial firms deal with customer complaints.

RBS had previously been fined £2.8m in January last year, after being found to be failing to deal with routine complaints from its banking customers in an adequate fashion.

In the case of the bank’s insurance subsidiaries, the FSA had requested a sample of 50 complaints to be sent to it, in early 2010, so that they could review how they had been handled.

However, before handing over these samples, the insurers management team requested that external accountants carry out their own review of the sample of complaints, whoo went on to find that 28% were likely to fail the FSA’s assessment criteria.

Both insurance firms took it upon themselves to look into closed complaints that they had on file to make sure that they were complete; telling staff to make sure files would pass the muster.

But, when the FSA received the sample of 50 files – back in April 2010 – it was informed that some files may have been altered or even “created”.

Closer inspection of the sample revealed that a massive 27 of the 50 had been tampered in some way, with seven of these containing signatures of employees that had been foged by a single member of staff.

The FSA stated that “In this case, the alterations did not impact on the FSA’s ability to do our job,” but noted that the insurers have failed to carry out the required “skill, care or attention” necessary with these duties.