Getting tough with endowment providers
This occured In a recent speech to industry representatives at the Financial Services Authority.
Endowment Justice welcomes this statement because it has many of examples of some of the major organisations continuing to deliberately ignore the guidelines. Endowment Justice also hopes that the speech comes with some substance and wasn’t simply playing to the crowd or justifying the FOS’s handling of the situation. Endowment Justice has repeatedly stated that more needs to be done to ensure the providers adhere to regulations and believes that a firmer hand needs to be taken with these organisations.
Merrick referred to examples of where organisations had been fined for their mis-handling of complaints. Endowment Justice hopes that the FOS’s warning to the culprits goes further than the threat of a fine. Endowment Justice is not convinced that this is the answer and believes that the major endowment providers are simply not taking either the threat of a fine, or the fine itself, as a warning. Compared to the cost of dealing with, and paying compensation to all those entitled, the fines are virtually irrelevant.
Marianne Fitzjohn, Endowment Justice said: “The FOS and FSA have worked with many of the mis-selling culprits in attempts to help them manage the volume of claims. Halifax was granted an extension last year and allowed 16 weeks (rather than the standard eight) to deal with each case. This ended in May 2004 but we haven’t seen any level of improvement in their handling of cases. In fact Halifax is one of the worst examples taking months to deal with complaints and continuing to reject a disproportionate amount of cases.
“We have also seen the FSA impose fines on many organisations for their mis-handling of complaints. These fines have seemed to provide no level of deterrent whatsoever.
“It is time a new tactic was deployed. Organisations have had long enough to research the situation and put actions in place to actively deal with complaints. It is about time that they faced a punishment which means something to them and which would not only ensure the endowment policy situation is dealt with effectively but deter the repeat offenders from creating another financial services scandal in the future.”
Endowment Justice has been able to help clients who, in many instances, have been blatantly misled by many of the biggest providers of endowment policies including Nationwide, Halifax and Abbey National despite having a legitimate claim for endowment policy mis-selling. The tactics used include misquoting legislation, miscalculation of compensation, and protracted delays.
There are many examples of policyholders being mis-quoted regulations and legislation and having their complaints unfairly rejected. In many other instances complaints have been upheld but the compensation offered as redress is significantly less than the policyholder is entitled to. In both cases it is very difficult for consumers to know how to respond, or challenge their policy providers if they do not have a comprehensive understanding of the legislation or an expert to guide them through the process.