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Friends Life to pay redress after with-profits system failure

Friends Life will pay redress to 1,200 with-profits customers after a ‘spot check’ revealed faults in the system used to calculate bonuses.

The insurer, set to be taken over by Aviva, insists the problem was isolated to a group of 3,000 Winterthur policyholders, with 40 per cent losing out as a result of the problem.

A Friends Life spokeswoman says: “We have identified a small number of Winterthur customers where errors were made resulting in underpayments and we are in the process of contacting all of these customers to reimburse them.



“As part of this process, we have made changes to our systems to ensure that these errors cannot be repeated.

 All the affected Winterthur customers had with-profit funds. The specific problem was a fault with the system used to calculate the bonus for this particular group of 3,000 customers.



“The system which was found to contain a fault is only used on the accounts for this specific group of 3,000 customers, hence we can be absolutely confident that the 1,200 policies identified as undervalued, is the full extent of this issue.

”

Friends Life did not disclose how much it will need to pay to the affected policyholders.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Ah another example of these wonderful products. The Magical Mystery Tour of investing. To those many of us who saw through these woebegone products way back in the 80’s this comes as no surprise at all.
    I wonder how much these firms will be fined? I wonder if advisers who didn’t at least investigate the possibility of switching out years ago, will be held to account.

  2. Friends Life again – no surprise there, then. Safe in their robber baron IoM haven, this shower have wrecked retirement for pensioners worldwide as well as in the UK.

    Regulator? What regulator? Due diligence? Adherence to jurisdiction rules and regs? Pause for hysterical laughter!

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