Questions Of Cash: 'What has happened to my policy worth £50,000?'

Q. My wife had a policy with Friends Provident. But on maturity the proceeds were not paid to her, but seem to have been claimed by an employee of the First Trust Bank, with an employee forging my wife's signature. I have complained to the bank and the Financial Ombudsman Service. FOS ruled in the bank's favour, but only because my wife and I wrongly presented our case. Our only option now seems to be to take a legal action against the bank employee, which is prohibitively expensive. AN, Northern Ireland.

A. First Trust's parent, the Allied Irish Bank in Dublin, declined to discuss your concerns in detail. But it says these have previously been "comprehensively investigated and addressed" and were not upheld by the Financial Ombudsman (FOS).

The FOS employed a handwriting specialist to analyse the signatures on the policy documentation. That specialist agreed the signature on the policy documentation was not that of your wife or you. But the expert dismissed your claim that the bank employee you named forged your wife's signature. The Financial Ombudsman did not seek to determine where the funds from the policy went. It is not clear now, some time after the Ombudsman's investigation, why this is – but the Ombudsman may have felt this was beyond his remit.

Friends Provident also consulted a handwriting expert, who agreed your wife's signature was forged. The company will not disclose where the proceeds of your wife's policy ended up, but said these went to an "institution", not an individual. Friends Provident believes that if you wish to proceed further you should seek a legal remedy, either by suing the bank employee you believe stole your wife's money, or else by reporting the alleged fraud to the police. We think you have no realistic chance of success in taking an action against the bank employee, unless you have evidence of which we are unaware.

Having completed a complex series of inquiries, we believe that the policy was lodged with the bank as security for loans. When those loans were not repaid, the proceeds of the policy were used to repay those loans. Neither Friends Provident nor First Trust Bank is willing to discuss this possibility. When we asked you whether this was likely, you confirmed it was – but said that the loans were for about £10,000, compared to the policy value in excess of £50,000. We asked First Trust whether this was the correct interpretation of events and, if so, to provide a detailed account of how any proceeds of the policy might have been applied. It declined to comment on this. We suggest you now contact First Trust with the same request.

Q. In March, I wrote to my Lloyds branch in Bournemouth asking them to note my change of address from Thailand to the Philippines. I asked Lloyds to confirm it had done this, but did not receive a reply. I emailed several times before I received a letter of confirmation, with a cheque for £25 to apologise for poor service. Lloyds explained it could not credit my account as it was dormant. This was a surprise to me.

The British Bankers' Association says accounts will not become dormant if there has been movement in the account in the previous year. I paid a credit into my account in June last year and another in the February just gone, so my account should not have become dormant. I made a further credit into my Lloyds account in May, which was also accepted.

In June, Lloyds phoned to confirm my account was dormant, but was unable to explain why. To reactivate my account I must send a certified copy of my passport. Lloyds did the same thing to me in 2007, when there had also been movement in my account in the previous year. This is a serious inconvenience for me as I travel frequently on business, so I must visit a British Embassy, stay overnight while a document is prepared and pay a fee. In 2007 Lloyds paid the fee as it accepted it had made the mistake. Now Lloyds simply says that it has written to my mailing address. NL, Philippines.

A. There appear to be different interpretations of what amounts to account activity – the bank does not accept that payments into your account represents "activity". Lloyds says that you have not "used [your] account" since 2005, though it confirms that "contrary to normal procedure, [it has] accepted one or two small electronic credits into the account".

Having classified your account as dormant, the bank is committed to following its own procedures. These involve you proving once more who you are. As you live abroad, Lloyds requires you to submit a new copy of the signature mandate form, plus a photocopy of your passport, stamped by another bank, lawyer, embassy official, chartered accountant or medical doctor, certifying that it is a true copy of an original document. If you want to keep your Lloyds account live, you must make payments from the account more frequently in future.

Q. I applied for a Santander Zero credit card, but have been refused. Although I have a mortgage, I do not otherwise have any debts. I thought this would make me a good credit risk, but I have been refused the card. Can you get them to reconsider? HP, Co Down.

A. We tried – and failed. You have been just too responsible. Your credit scoring record is not good, simply because you have not been borrowing money. Therefore there is no history of debt repayment (other than your mortgage). Abbey, the Santander subsidiary that handles applications for the Zero card, says you are now out of time to appeal against its decision. It adds that if you "opt-in" to allow your personal accounts records held by your bank to be shared with other lenders, Abbey may then be able to approve your application if you reapply. But it warns – unhelpfully, in our view – that it may reject the application anyway because you would then be applying within six months of having being rejected.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: