Abbey reopens rejected cases
Bank agrees to reconsider all mis-selling claims since 2000 after FSA investigation and fine

Some 50,000 endowment policy holders with Abbey can look forward to a new investigation into their claims for mis-selling. After years of routinely rejecting the vast majority of complaints, the bank has been called to account by the city regulator, the Financial Services Authority.
On top of an £800,000 fine for mis-handling its endowment complaints system and providing the regulator with potentially misleading information, the bank has agreed to go back and reopen every complaint it has rejected since January 1, 2000. The only exceptions are complaints that have already been settled in favour of the customer and those already investigated by the Financial Ombudsman Service (FoS).
The FSA revealed that between October 1 2001 and September 30 2003, Abbey rejected a staggering 93 per cent of endowment complaints. The bank had not previously published details of the number of complaints it upheld and rejected.
So while it's good news for Abbey customers, many of whom have already received a letter telling them of the re-consideration of their complaints, there is still uncertainty for endowment holders at other companies who may have been unfairly rejected and who may now have missed their chance to take their claims to the FoS.
Policyholders have only six months from the date of their rejection to get a case to the FoS. And some life companies do their best to dissuade them from pursuing a claim. As an example of the kind of tactics used, the FSA has published the standard letter sent out by Abbey to unsuccessful claimants. Among other things, this letter said: "Our adviser would not have recommended an endowment mortgage unless it was agreed that you were pre-
cash surplus at the end of the term."
The FSA says "such wording may have discouraged customers from pursuing their complaint further, for example by referring their complaint to the FoS".
The FSA says "such wording may have discouraged customers from pursuing their complaint further, for example by referring their complaint to the FoS".
The difficulty for customers of other companies is knowing whether the complaint has been fairly considered or cast aside as part of a near-blanket policy of rejecting claims. The FSA and the FoS will not release names of other companies they suspect of blanket rejections because it is sensitive data that could affect share prices.
Experts acknowledge that claims it accepts and rejects. Last year the Pru received 23,000 endowment complaints and upheld about three-quarters of them.
The commercial endowment claims handling sector is controversial because it charges clients for handling their claims. But companies in the sector want to see improvements in life office claims handling, and are happy to name names.
Marianne Fitzjohn, director of claims handler Endowment Justice, had long known of Abbey's poor practices. She had shared her concerns with the FSA and there are two other companies she's complained about, including Halifax.