Latest Endowment News

 

Abbey endowment claim shame
Jo Thornhill, Financial Mail
19 December 2005

MORTGAGE endowment giants are still failing to deal with customer complaints fairly - almost a year after the Financial Services Authority warned company bosses that they must do better.
 

 A survey by third-party claims handler Endowment Justice shows that the Financial Ombudsman Service is backing the customer and overturning at least half the cases taken to the Ombudsman after they had been rejected by some of the biggest banks and insurers.

Endowment Justice says the worst offender is Abbey, which has already been disciplined this year for failings in its endowment complaints handling.

The Spanish-owned bank was fined £800,000 by the FSA in May and was forced to review 50,000 complaints it had rejected (see below).

Endowment Justice has reviewed 400 cases where the Ombudsman became involved. In the cases relating to Abbey, a staggering 99 per cent ended up with the Ombudsman backing the customer.

Halifax also performed poorly with 81 per cent of cases it rejected subsequently being supported by the FOS.

'This time last year I sent a similar survey to the FSA,' says Marianne Fitzjohn, managing director of Endowment Justice in Churcham, Gloucestershire.

'Six months later, Abbey was hit with a fine by the FSA. I conducted the research again because I am still concerned by the high rejection levels and by the delays many consumers are experiencing.

'I've seen little improvement in the past 12 months and hope the FSA will act on this information.'

FSA chief executive John Tiner wrote to all the major endowment providers last January warning them to improve their claims handling or face enforcement.

Companies were dismissing too many complaints and passing an increasing number to the Ombudsman, which were subsequently upheld. But the situation had not improved by August and Financial Mail revealed that Tiner had written again to 80 chief executives putting them on 'red alert' over complaints handling.

The FSA said on Friday: 'Firms not maintaining acceptable standards will be required to fix any problems. Where necessary, we will use the full range of remedial sanctions

available to us to achieve this.' These include reviewing samples of rejected cases or reviewing all decisions within a given period.

Abbey said: 'We have overhauled our whole claims handling process and are happy that our overturn rates at the Ombudsman are far lower than those previously reported.'

Halifax says: 'We have robust processes in place and have put significant resources behind complaints handling.

'We have 500 staff handling complaints and recently allocated-more than £250 million to meet claims.'

Endowment Justice findings are supported by evidence from the FOS, which says it overturns about 45% of referred cases - the same level as a year ago. But it does believe most companies are improving standards.

FOS spokesman David Cresswell says: 'We are still keeping a close eye on referral levels. But the general picture is certainly improving and we have seen a sea change within some companies.'
 

 

Selling endowments for more than the surrender value

Selling endowments the quick and easy way

Selling endowments for profit