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Friends Life pays out after pension transfer error

Friends Life has compensated a man after he lost money following a pension transfer that was not properly carried out.

The customer, called Mr Y in The Pensions Ombudsman decision, wanted his plan – worth £1,622.77 at the time, transferred to another account he held with Friends Life.

However, only £396.83 was transferred and the remaining amount was put into a “suspense” account.

When Mr Y contacted Friends Life he was told all of the funds had been transferred and it was only when he later checked his transaction history that he realised they hadn’t.

Mr Y complained to Friends Life, which said it would calculate any financial loss caused by its mistake and pay him £300 for distress and inconvenience.

Friends Life put the funds back into the account but it did not backdate it as promised. Mr Y complained to the ombudsman.

The adjudicator that initially handled the complaint said the payments should have been backdated and a higher award of £500 should be made for distress and inconvenience.

Friends Life agreed to pay £122.15 in backdated payments into the plan and to pay the higher award. However, Mr Y thought he should get a higher redress award for distress and inconvenience.

The complaint was passed to an ombudsman who upheld it but did not agree Mr Y should be paid more than £500 for distress and inconvenience.

Deputy ombudsman Karen Johnston says: “Mr Y contends that his complaint can be broken down into three parts and therefore he should be compensated for each part. Whilst I accept that Mr Y’s complaints could be separated into three sections I do not consider that each of them warrants an independent award. I consider the effect of the conduct overall.”

She says: “Taking into consideration the number of issues Mr Y has faced, and the time it has taken to resolve them, it is my view that £500 is reasonable and I do not consider a higher award should be made.”

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