The Financial Services Authority has fined Liberata, a key BPO provider to the public and financial sectors, more than £500,000 for failure to ‘control its affairs responsibly and effectively’ and lack of ‘due skill, care and diligence’ in its business activities.

The fine was incurred when staff at the company failed to cope with the high volume of messages generated by its computer system resulting in pension policyholders losing money on their investments.

The ruling, the first imposed on an outsourcing company by the FSA, sets a precedent which could lead to other outsourcers being held accountable for technical failures.

The FSA’s report detailed Liberata’s failings stating that: “30,000 policyholders did not receive documents containing important information about their savings…of these policyholders, 161 suffered financial loss”. The FSA calculated that the losses incurred as a result of these failings amounted to £17,584.

The fine for Liberata’s failings was initially set at £750,000 but was reduced by the FSA for early settlement.