Prudential is to pay back a couple more than £35,000 in missing premiums after they were victims of identity fraud.
According to a Financial Ombudsman Service decision the couple, known as Mr and Mrs B, took out an endowment policy in 1999 that was fraudulently surrendered in 2008.
Prudential accepted the couple were victims of fraud and offered to pay back the money they lost plus growth and bonuses it would have accrued.
But Mr and Mrs B complained to the FOS that the Pru had allowed the fraud to take place and did not explain how it had happened. They also said they were aware of this kind of fraud across several accounts and questioned why no additional security checks were in place.
According to the FOS, Mr and Mrs B only became aware of the fraud and that their direct debits had been stopped when they recently applied for a new loan.
They said if the fraud had not occurred they would have continued paying monthly premiums and asked the Pru to also make up the £35,600 they would have paid in if the insurer had not cancelled their payments.
Ombudsman Tony Moss ordered the Pru to put back all of the missing premiums, which amount to more than £35,600 and add the bonuses and growth that would have been applicable to bring the policy up to the value it would have had if it had not been subject to fraud.
The insurer must also pay the couple £500 for the trouble and upset it has caused. Prudential is only required to pay back the premiums and the compensation if Mr and Mrs B keep the policy and pay the back-payments minus the cost of six months’ worth of premiums.