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Pru ends payouts to endowment chasers

Prudential is refusing to pay commission to endowment-chaser firms and will only pay settlements directly to customers.

Pru is writing to third-party mortgage endowment complaint firms and customers, explaining its new stance which takes immediate affect.

Any complainants who succeed in getting compensation from the Pru will have to pay an endowment chaser for its services directly according to any contracted agreements.

Pru figures show it paid out 1.7m in the past 12 months to clients who used third-party firms to handle complaints. The Pru says the average commission charged by endowment-chasers was 25 per cent, making a total of around 438,000 from the Pru.

The firm says it will investigate any endowment compensation complaint free and says customers who are already contracted to third-party firms will be treated in the same manner as clients complaining direct.

Prudential UK & Europe chief executive Mark Wood says: “We are concerned that some customers may not know they have the option of dealing with us directly and this will cost them nothing.”

The Financial Ombuds-man Service will not comment on individual firms but says it is keen for customers to understand that they can complain for free.

Barry Johnson Financial Services senior partner Barry Johnson says: “I applaud the Pru. We fell out with the Pru on the term insurance debacle but this almost serves to build a bridge between us. It is about time that someone did something.”

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