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Life office contracts are main cause for complaint

Pensions advisory service Opas has attacked life office contract terms and charges as the main sources of complaints to its helpline.

In its annual review of cases for 2000/01, Opas says “scandalous practices of ill-defined contract terms and hidden charges” were the main areas of complaints. It hopes that stakeholder will help to ensure this becomes a thing of the past.

The review details one particular case involving a policyholder sold a pension by a direct salesperson who told the client their key features document was “just a load of bumf which had to be issued”.

The client wanted to transfer his personal pension to a Dublin subsidiary of his employer. The insurance company told the client it would be possible but he was later told the transfer value of the plan was nil because the terms precluded payment of any transfers within two years of start-up. The client was unaware of these terms, which Opas describes as scandalous.

Opas says: “One topic that does little to enhance the reputation of the insurance industry already tarnished by the pension misselling scandal and which often causes great res- entment among policyholders, is hidden charges and poorly defined contract terms. We hope the introduction of stakeholder will see plans with such terms obsolete.”

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