The Financial Services Authority has written to the UK's largest life insurers and financial advisers, criticising them for their poor handling of the thousands of mortgage endowment mis-selling complaints over the past four years.
The letter, sent at the end of last month but made public yesterday, said too many companies were rejecting complaints without giving them due consideration, forcing customers to resort to appealing via the Financial Ombudsman Service (FOS).
The regulator said the rising number of complaints received by the FOS, and the high proportion upheld, was proof that many companies were using it as "an alternative to properly handling complaints themselves".
Clive Briault, the FSA's managing director for retail markets, said: "Fair handling of complaints is one of the key indicators that firms are treating their customers fairly. Firms should not manage their own caseloads by allowing an excessive number of complaints to flow through to the FOS."
He said the regulator was concerned by FOS reports that some firms had repeatedly turned down complaints very similar to previous batches of cases which the ombudsman upheld. "Such behaviour is not in keeping with the spirit or letter of our requirements," he said.
Separately, the Actuarial Profession warned of more misery for mortgage endowment policyholders, predicting another year of poor bonuses. Its predictions came as Axa made the first of the new year's bonus declarations, announcing that its Equity & Law policyholders would receive only a 1 per cent bonus for 2004, compared with 2 per cent in 2003. Most of the UK's major life insurers are set to announce their new bonus rates over the next few weeks.
Nigel Masters, the chairman of the Actuarial Profession's life board, said: "Policyholders are seeing the results of lower returns in terms of reduced bonuses now and, in all likelihood, for several years to come. With a lower inflationary outlook, the real returns from with-profits policies may nevertheless remain competitive with those from other investment choices."Reuse content