Endowment complaints up by 30%

Since April, endowment policy providers have witnessed a 30 per cent increase in the number of complaints following a mailing of "time-bar" letters to policyholders.

Scottish Widows, Standard Life and Norwich Union began to send out more than 1m letters informing many policyholders that they had only 12 months left in which to complain about potential mis-selling.

Scottish Widows confirm that complaints are up by 30 per cent, while Standard Life said they have risen by at least 15 per cent. Norwich Union said it has only just finished the mailing and is predicting an increase of up to 40 per cent.

The time-bar rule states that policyholders must make a complaint within 3 years of the first red warning letter. A red letter warns homeowners that their endowment has little chance of covering their mortgage.

The Financial Services Authority ruled last summer that providers who impose the time-bar rule must give policyholders at least six months' notice of the cut-off date. Scottish Widows, Standard Life and Norwich Union are all giving their customers 12 months' notice.

Jul 29, 2005
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