Treasury select committee chairman John McFall has urged the FSA to develop a code of practice for financial companies dealing with bereaved customers.
In a recent letter to FSA chief executive Hector Sants, Labour MP McFall calls for a set of industrywide guidelines to fall under the regulator’s treating customers fairly regime.
In one case brought to McFall’s attention, a firm delayed transferring an Isa containing £22,000 to the widow of the account holder for more than 11 months.
He says it is an issue that has been exacerbated by the current financial climate.
McFall says: “There are currently no industrywide guidelines in place for financial services companies on dealing with bereavements. Procedures and requirements therefore vary greatly from company to company.
“Customers who have lost their partner are finding themselves trying to navigate complex and badly designed procedures that differ bet- ween firms, during what is a particularly stressful time in their lives.”
Paladin Financial Services managing director Tim Purdon says standardisation is required but he warns about new regulation.
He says: “I think there needs to be a standard procedure for companies to follow at the time of bereavement. I am delighted to see McFall address such a practical issue but I am concerned about further regulation at a time when the whole sector is drowning under over applied regulation.”