Endowment firms reimburse investors
More people are winning compensation for being mis-sold endowments through faulty investment advice, due to pressure applied by the Financial Services Authority (FSA) to the endowment companies.
The firms have been forced to compensate more than 100,000 customers whose complaints had previously been rejected, and they have received an extra £120m as a result since the FSA got involved.
The FSA took up cudgels on the investors’ behalf as there was concern that the endowment companies – mainly banks and insurance firms – were being too zealous in rejecting or lessening compensation claims from disgruntled policyholders in the UK investment arena.
“It is encouraging that firms have improved the speed and quality of how they handle complaints,” said FSA spokesperson Vernon Everitt. “News of a potential shortfall is major worry for consumers and firms owe it to them to deal with their complaints quickly and fairly.”
He continued: “They need to pay particular attention to helping people deal with shortfalls when policies mature.”
The UK investment vista has been seriously spoiled by the endowment scandal and people who took them out in the late 1980s to enable them to pay off interest-only mortgages have been especially hard hit.
In the last six years the FSA has fined 10 firms a total of £14m for mishandling their endowment complaints process. Since the whole compensation process started, 1.8 million people have received £2.7bn.