Shabby Abbey
Abbey is reportedly still struggling to address and satisfy its endowments problems, some 15 months after Abbey was fined £800K by the Financial Services Authority (FSA) for its poor performance in handling endowment mortgage mis-selling complaints.
According to reports, endowment complaints companies say that paperwork frequently goes missing at Abbey and that their clients are waiting months for a decision from Abbey about their cases.
Keypoint Endowment Claims allege that it has 500 Abbey clients who have all been waiting over 8 weeks for a decision from Abbey. In fact the majority have waited over 3 months.
The FSA rules stipulate that endowment providers must decide whether to uphold or reject a mis-selling complaint within 8 weeks. In the event that they cannot stick to this deadline, they must send a holding letter to complainants. Failure to do this is a breach of the FSA rules, and risks disciplinary action.
John Gardiner, operations director at Keypoint, is quoted as saying:
"Abbey is by far the slowest, most disorganised and inflexible endowment company we deal with.
In more than half of the 500 outstanding cases I have with Abbey, the bank hasn't even sent a holding letter."
Abbey is owned by Banco Santander, and was fined £800K last year and ordered to reopen 50,000 mis-selling cases that it had previously rejected.
I repeat, much of this pain and mess could all be stopped if the life assurance companies bit the bullet and underwrote these useless products that we have been lumbered with.
Monday, August 14, 2006
Monday, July 31, 2006
Endowment Claims Double
Endowment Claims Double
The Financial Services Authority (FSA) has doubled its estimate of how much firms have paid out in compensation for mis-selling endowment mortgages in the past, up to £2.2BN.
The FSA said the estimate is up to April 1, 2006.
The previous estimate of £1.1BN was up to the end of 2004.
Compensation payments have jumped sharply, £945M was paid in the year to April 1 with the number of complaints rising to 767,152.
In the year to April 1, 2005, compensation was £601M for 324,935 complaints. In 2003/04 compensation was £424M for 202,200 complaints, and before April 2003 compensation totalled £225M for 250,000 complaints.
Bradford & Bingley on Thursday announced its compensation provision would rise to £165M.
All of this pain could be avoided if the life assurance companies bit the bullet between their teeth, and agreed to underwrite these useless policies.
The Financial Services Authority (FSA) has doubled its estimate of how much firms have paid out in compensation for mis-selling endowment mortgages in the past, up to £2.2BN.
The FSA said the estimate is up to April 1, 2006.
The previous estimate of £1.1BN was up to the end of 2004.
Compensation payments have jumped sharply, £945M was paid in the year to April 1 with the number of complaints rising to 767,152.
In the year to April 1, 2005, compensation was £601M for 324,935 complaints. In 2003/04 compensation was £424M for 202,200 complaints, and before April 2003 compensation totalled £225M for 250,000 complaints.
Bradford & Bingley on Thursday announced its compensation provision would rise to £165M.
All of this pain could be avoided if the life assurance companies bit the bullet between their teeth, and agreed to underwrite these useless policies.
Thursday, July 27, 2006
Bradford and Bingley Hit By Claims
Bradford and Bingley Hit By Claims
Bradford & Bingley PLC today announced a larger than expected hit from endowment compensation claims by annoyed endowment customers.
Bradford & Bingley said that it was setting aside a further £89.4M, to cover the higher-than-expected number of complaints from customers who claim they were mis-sold endowment policies.
The total provisions now stand at £165.2M.
Bradford & Bingley CEO Steven Crawshaw said that he could not rule out further provisions in future.
Quote:
"It'd be a very brave person who would say that this is the last, but there are signs of light at the end of the tunnel."
Analysts at Keefe, Bruyette & Woods wrote in a note:
"The compensation claims for mis-selling are massive in relation to expectations and historical experience. While this should be a one-off, it is a negative for sentiment."
Bradford & Bingley also said underlying pretax profit, which excludes the endowment provision, came in at £164.2M in the six months to June 30, up 9% from £150M in the same period last year. Analysts had been expecting profit of £162.4M.
In my view a lot of heartache for those who bought these useless policies, and those who "manage" them, could have been saved if the life assurance companies simply underwrote them.
Bradford & Bingley PLC today announced a larger than expected hit from endowment compensation claims by annoyed endowment customers.
Bradford & Bingley said that it was setting aside a further £89.4M, to cover the higher-than-expected number of complaints from customers who claim they were mis-sold endowment policies.
The total provisions now stand at £165.2M.
Bradford & Bingley CEO Steven Crawshaw said that he could not rule out further provisions in future.
Quote:
"It'd be a very brave person who would say that this is the last, but there are signs of light at the end of the tunnel."
Analysts at Keefe, Bruyette & Woods wrote in a note:
"The compensation claims for mis-selling are massive in relation to expectations and historical experience. While this should be a one-off, it is a negative for sentiment."
Bradford & Bingley also said underlying pretax profit, which excludes the endowment provision, came in at £164.2M in the six months to June 30, up 9% from £150M in the same period last year. Analysts had been expecting profit of £162.4M.
In my view a lot of heartache for those who bought these useless policies, and those who "manage" them, could have been saved if the life assurance companies simply underwrote them.
Tuesday, July 18, 2006
Claims Firm Collapses
Claims Firm Collapses
As if things were not already bad enough for the millions of people stuck with underperforming and useless endowment policies, 6000 now face the added burden of having paid money to a claims firm that has been wound up by the DTI.
6000 people whose endowments failed paid £495 upfront to a claims company, Manchester-based Vickers Anderson Consulting.
It is unclear as to whether they will be able to get their money back.
What a mess!
As if things were not already bad enough for the millions of people stuck with underperforming and useless endowment policies, 6000 now face the added burden of having paid money to a claims firm that has been wound up by the DTI.
6000 people whose endowments failed paid £495 upfront to a claims company, Manchester-based Vickers Anderson Consulting.
It is unclear as to whether they will be able to get their money back.
What a mess!
Wednesday, July 05, 2006
250 A Day Habit
250 A Day Habit
The Financial Services Ombudsman (FSO) announced that it received 250 complaints a day last year about endowment mortgages.
Walter Merricks, the chief ombudsman, said that there were indications that the "extraordinary high volume" of complaints about endowment mortgages was levelling off.
The Financial Services Ombudsman (FSO) announced that it received 250 complaints a day last year about endowment mortgages.
Walter Merricks, the chief ombudsman, said that there were indications that the "extraordinary high volume" of complaints about endowment mortgages was levelling off.
Saturday, July 01, 2006
Words of Wisdom
Words of Wisdom
There are some words of wisdom in the FT for holders of Standard Life with profits policies.
There are some words of wisdom in the FT for holders of Standard Life with profits policies.
Thursday, June 29, 2006
A Nice Little Earner
A Nice Little Earner
Those of you who were worried that the poor old executives of Standard Life might not do so well out of their forthcoming share listing, need not worry.
As already reported on this site, the share listing has been badly affected by the downturn in the stock market; it meant that Standard Life are having to offer their shares at a lower than expected price.
Needless to say, this negatively impacts policyholders who are to receive an allocation of shares; their share allocation is now lower in value than they had been expecting.
It should be remembered that it is not only policyholders who receive shares, but the board of Standard Life as well. Therefore they too will receive a lower valuation of their allocation.
Now as with many things in life, not everything is as clear cut as it first may seem. You see, some of the board have a nice agreement whereby if the share price is lower than first expected they get allocated more shares.
Standard Life's top five executives will be awarded more shares if the issue is priced cheaply.
It seems that the agreement has put management's interests alongside the institutions, which will be pressing for a low issue price, rather than retail investors that want to sell their shares immediately to get their windfalls.
Sandy Crombie, the chief executive, was awarded a maximum incentive of £1.13M. He is the man who opposed the demutualisation of Standard Life in 2000, when policyholders could have earned 10 times as much as they are now had the deal gone ahead.
Funny old world isn't it?
Those of you who were worried that the poor old executives of Standard Life might not do so well out of their forthcoming share listing, need not worry.
As already reported on this site, the share listing has been badly affected by the downturn in the stock market; it meant that Standard Life are having to offer their shares at a lower than expected price.
Needless to say, this negatively impacts policyholders who are to receive an allocation of shares; their share allocation is now lower in value than they had been expecting.
It should be remembered that it is not only policyholders who receive shares, but the board of Standard Life as well. Therefore they too will receive a lower valuation of their allocation.
Now as with many things in life, not everything is as clear cut as it first may seem. You see, some of the board have a nice agreement whereby if the share price is lower than first expected they get allocated more shares.
Standard Life's top five executives will be awarded more shares if the issue is priced cheaply.
It seems that the agreement has put management's interests alongside the institutions, which will be pressing for a low issue price, rather than retail investors that want to sell their shares immediately to get their windfalls.
Sandy Crombie, the chief executive, was awarded a maximum incentive of £1.13M. He is the man who opposed the demutualisation of Standard Life in 2000, when policyholders could have earned 10 times as much as they are now had the deal gone ahead.
Funny old world isn't it?
Wednesday, June 28, 2006
FSA Apologises For Failures
FSA Apologises For Failures
The chairman of the Financial Services Authority (FSA), Callum McCarthy, has apologised over its heavy handed approach to regulation.
McCarthy said that he accepted that the FSA had been dogged by "failures", but claimed it had now made reforms.
Quote:
"The review of the FSA's enforcement procedures we completed last year shows that when we recognise failures in our processes we will seek to remedy them.
I regret that it took us so long to recognise the legitimacy of concerns expressed to us that these processes were not fair to those subject to them."
The apology comes in the wake of the fiasco with Legal & General, which took the FSA to the Financial Services & Markets Tribunal after it was fined £1.1m for mis-selling endowment mortgages. The tribunal ruled the fine had been twice as high as was justified.
Meanwhile, the holders of these useless underperforming products continue to face shortfalls.
The chairman of the Financial Services Authority (FSA), Callum McCarthy, has apologised over its heavy handed approach to regulation.
McCarthy said that he accepted that the FSA had been dogged by "failures", but claimed it had now made reforms.
Quote:
"The review of the FSA's enforcement procedures we completed last year shows that when we recognise failures in our processes we will seek to remedy them.
I regret that it took us so long to recognise the legitimacy of concerns expressed to us that these processes were not fair to those subject to them."
The apology comes in the wake of the fiasco with Legal & General, which took the FSA to the Financial Services & Markets Tribunal after it was fined £1.1m for mis-selling endowment mortgages. The tribunal ruled the fine had been twice as high as was justified.
Meanwhile, the holders of these useless underperforming products continue to face shortfalls.
Thursday, June 22, 2006
Bradford and Bingley Hit
Bradford and Bingley Hit
Bradford & Bingley have been hit by new claims for compensation for the misselling of endowment and investment policies. They are thinking of taking a charge to cover potential settlements.
B&B provided a trading statement which did not make it clear as to whether the increase, over the first half of this year, was temporary or indicated a trend in increased claims.
Quote:
"The volume of claims for compensation related to endowment and investment products has increased markedly, reversing the downward trend established in the second half of 2005.
At this stage it is not clear whether the recent increase in claims is temporary and reflects only an acceleration of future claims or whether this is a new trend.
We are currently reviewing the adequacy of our provisions in respect of these claims with a view to taking a further charge and will provide an update at the interim [results]."
Why don't the life assurance companies just underwrite these policies, thus reducing the amount of time and money wasted by them on trying to avoid paying claims for compensation?
Bradford & Bingley have been hit by new claims for compensation for the misselling of endowment and investment policies. They are thinking of taking a charge to cover potential settlements.
B&B provided a trading statement which did not make it clear as to whether the increase, over the first half of this year, was temporary or indicated a trend in increased claims.
Quote:
"The volume of claims for compensation related to endowment and investment products has increased markedly, reversing the downward trend established in the second half of 2005.
At this stage it is not clear whether the recent increase in claims is temporary and reflects only an acceleration of future claims or whether this is a new trend.
We are currently reviewing the adequacy of our provisions in respect of these claims with a view to taking a further charge and will provide an update at the interim [results]."
Why don't the life assurance companies just underwrite these policies, thus reducing the amount of time and money wasted by them on trying to avoid paying claims for compensation?
Friday, June 16, 2006
Standard Life Price Reduction
Standard Life Price Reduction
The current rout of the world stock markets has forced Standard Life to cut the price range for its listing on the UK stock market next month by 10%.
The group's 2.4 million policyholders will have their average payouts reduced to about £1,540 compared to £1,700.
Needless to say, the policyholders are far from happy with this, some are quoted as saying that they are "completely disillusioned" with the company.
The price range for the shares has been brought down from 240-290p to 210-270p.
Sandy Crombie, its chief executive, said the board and its advisers "had a very serious discussion about delaying".
He compared the float process with "a juggernaut, difficult to stop once it is launched".
This is rather ironic as only a few years ago Crombie fought against listing Standard Life, and managed to persuade the policyholders to vote against it. That was back in 2000, when the policyholders would have made ten times as much as they are doing now.
A cynic might question why Crombie still holds office?
Phil Needham, a policyholder, is quoted as saying:
"I'm completely disillusioned with Standard Life.
My own payment was expected to be between 7,000 and 9,000, but this development will knock about 10 per cent off this figure. They ought to have demutualised five years ago.
As a company over the past five years its performance has been appalling."
This fall in price leaves them open to a hostile bid.
Given this shambles, and the ongoing industry wide endowment policy fiasco, it is hardly surprising that people have totally lost confidence in Britain's life assurance industry.
The current rout of the world stock markets has forced Standard Life to cut the price range for its listing on the UK stock market next month by 10%.
The group's 2.4 million policyholders will have their average payouts reduced to about £1,540 compared to £1,700.
Needless to say, the policyholders are far from happy with this, some are quoted as saying that they are "completely disillusioned" with the company.
The price range for the shares has been brought down from 240-290p to 210-270p.
Sandy Crombie, its chief executive, said the board and its advisers "had a very serious discussion about delaying".
He compared the float process with "a juggernaut, difficult to stop once it is launched".
This is rather ironic as only a few years ago Crombie fought against listing Standard Life, and managed to persuade the policyholders to vote against it. That was back in 2000, when the policyholders would have made ten times as much as they are doing now.
A cynic might question why Crombie still holds office?
Phil Needham, a policyholder, is quoted as saying:
"I'm completely disillusioned with Standard Life.
My own payment was expected to be between 7,000 and 9,000, but this development will knock about 10 per cent off this figure. They ought to have demutualised five years ago.
As a company over the past five years its performance has been appalling."
This fall in price leaves them open to a hostile bid.
Given this shambles, and the ongoing industry wide endowment policy fiasco, it is hardly surprising that people have totally lost confidence in Britain's life assurance industry.
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