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Policy fraudster gets away with £160,000

Norwich Union has been accused of not doing enough to prevent fraud after one of its policyholders had his endowment policy cashed in by a fraudster.

Policyholder David Bland says the insurance company has acted in a “reckless, negligent and incompetent manner” after he had his 15-year-old endowment policy cashed in by a fraudster for around £160,000 in October 2006.

With only basic information about Bland, the fraudster is alleged to have gained sufficient further details from a Norwich Union overseas call centre to enable him to request a surrender value, set up a false bank account and cash in the policy early.

Bland says: “I would not have believed before this started that a company could be so negligent.”

NU has since accepted liability for the fraud and reinstated the policy. The company originally offered a redemption value that was £3,000 less than the fraudster received, blaming market movements, but has since increased this to £162,000.

Bland is also enraged that Avon & Somerset police are not pursuing the matter, saying the police cannot proceed because NU has not lodged a complaint.

NU spokesman Robert Pell said: “Norwich Union has a rigorous system to detect attempted identity fraud and we are able to prevent the vast majority of cases. However, a small number of fraud cases do occur each year.

“Detecting identity fraud is an ongoing process and, as fraudsters refine their processes, we are constantly evolving our own systems to combat this.”

Bland has written to the FSA to ask it to investigate the controls and systems at Norwich Union.

Letters, p36

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