Up to 81,000 policyholders who consider they could have misselling claims against Equitable Life for being sold income drawdown instead of guaranteed annuities have been told they will not receive compensation.
A letter to policyholders from the stricken insurer states that, under clause 17b of the rectification scheme, compensation is not payable unless policyholders can prove they would have chosen a guaranteed annuity.
The rectification scheme was set up, with £430m set aside to compensate those who had guaranteed annuity policies but who were advised to move into income drawdown.
IFAs and lawyers are warning policyholders to seek advice before returning the mailing and its attached questionnaire as they could risk signing away their rights.
Solicitor Clarke Wilmot & Clarke partner Robert Morfee advises policyholders to contact an IFA for the advice they would have been given to attach as supporting evidence.
A Bristol firm of solicitors is warning that March will be crunch time for Equitable Life after it has secured a trial date for misselling claims relating to late joiners. This is likely to be followed by other class actions.
Alan Steel Asset Management director Graeme Currie says: “We believe this is just another disgraceful con by Equitable Life while the FSA conveniently looks the other way.”
Equitable Life spokesman Alistair Dunbar says: “We must ensure that we are being fair to policyholders in rectification but also fair to continuing policyholders who have to bear any costs.”