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Best advice: Course for complaint

How to go about complaining about possible misselling by an insurance company salesperson who has left the firm

I have a misselling complaint about an insurance company salesperson. The salesperson no longer works in financial services. What can I do?

Kim North

Your first port of call with your complaint is to the insurance company. If the company cannot resolve your complaint to your satisfaction, you can contact the Financial Ombudsman Service. It was set up under the Financial Services and Markets Act 2000 to help resolve individual complaints between consumers and businesses providing financial services.

The FOS will decide if the company has treated you fairly or not and if it deems the business has acted wrongly it can order matters to be put right.

Interestingly, the latest FOS 2010/2011 businesses complained about by sector shows:

Banks 65.5%
Life companies 5%
IFAs 1.5%

As you can see, complaints against insurance companies and IFAs are considerably lower than those received about the banks. You can see at how many complaints have been received against the insurance company you have a complaint against and how many complaints have been upheld and resolved against them.

If you are successful and the FOS awards in your favour, you may be interested to know the FSA is increasing the FOS’s jurisdictional award limit from £100,000 to £150,000. The new limit will apply to all complaints referred to the FOS on or after January 1, 2012.

FSA-regulated firms may like to consider issuing any outstanding final decision letters by the end of June, to ensure the six-month window for complaints to be referred to the FOS ends before the new limit takes effect.

You need to be aware that, due to a court ruling in November 2010, if you accept a final decision from the FOS, both you and the insurance company will be bound by it and will not subsequently be able to bring a civil claim to recover any losses above the FOS’s limit of £150,000 plus interest. You can, however, reject an FOS determination and pursue their complaint through the courts.

Many financial advisory firms are complaining about removing the right to appeal against any FOS decisions and the lack of the protection in law of the 15-year long stop on complaints. There is also a worry that personal indemnity premiums may rise due to the rise to £150,000, which will push up costs to clients, but this is still to be proved as very few complaints are settled above the current maximum payout of £100,000.

As a comparison, the Legal Ombudsman has similar procedures to the Financial Ombudsman. This covers poor advice and service from solicitors in areas such as conveyancing where the sale or purchase of a property could fall through due to a solicitor’s error. A legal error could result in the loss of one of the most important financial decisions taken by many people with a possible financial loss. However, the maximum award made by the Legal Ombudsman is only £30,000.

The FSA has also announced that each regulated firm must appoint someone senior to be responsible for complianthandling and this must happen by September 1 this year. The name of this person must be available to the regulator upon request.

All these recent announcements make the position of a complainant such as you stronger and should lead to a more satisfactory process and outcome for misselling or product complaints.


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There is one comment at the moment, we would love to hear your opinion too.

  1. Exasperated me 16th June 2011 at 1:27 pm

    Pardon? I am reading Money marketing.

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