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Scottish Widows data protection error could cost customer £50k

A Scottish Widows customer claims the provider has cost him £50,000 after it breached the Data Protection Act by sending details of his pension to his ex-wife.

The provider has offered the customer, who cannot be named for legal reasons, £500 in compensation for sending the information to an unauthorised address.

But the customer says his losses will be in the region of £50,000 plus legal expenses, as his ex-wife is seeking half of the pension policy’s £100,000 value.

In a letter sent earlier this month, seen by Money Marketing, Scottish Widows says it erroneously updated the customer’s address when his ex-wife provided a change of address instruction for a different policy. This was despite the provider having been informed the couple had divorced.

The letter says: “This should not have happened as she was not a party to the contract.

“Due to the errors I have mentioned, we sent information to an unauthorised address and I understand that it was opened by the occupant.

“The misdirection represented a breach of the Data Protection Act.”

Scottish Widows says it is willing to consider a claim relating to the customer’s legal expenses “in principle”, but it notes full compensation would require proof the costs are “solely linked to our error”.

The customer says: “Scottish Widows has divulged the details of my personal pension to a third party. I want them to recognise the damage they have done and put things right.

“I intend to present myself at their offices in protest until they deal with this.”

The customer has lodged a complaint with the Financial Ombudsman Service and the Information Commissioner’s Office.

The law requires both parties in divorce cases to provide full disclosure of assets.

But the customer says he has received legal advice it does not need to be disclosed.

A Scottish Widows spokesman says: “We have apologised to the customer for having the incorrect address on his records and have offered compensation in recognition of the distress this has caused.

“However, we cannot become involved in a domestic dispute connected with the legal advice he was given at the time of his divorce.”

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. Money Guidance CIC 18th December 2014 at 12:01 pm

    I`m not too sure why full disclosure of assets did not seem to extend to pensions in this case anyway.

  2. Full disclosure of assets on divorce may very well be required. But the obligation to make the disclosure is on the parties to the divorce. Scottish Widows under the Data Protection Act should not have disclosed details of the husband’s pension to any third party with the authority of the husband. It is up to the husband to decide whether he will disclose the pension as part of any separation/divorce settlement. It is also the husband who will face the consequences if his failure to disclose was unlawful.
    I do not want to see anybody avoid their legal commitments but it is not for Scottish Widows to go against confidentiality as enshrined in the Data Protection legislation. Personally, I think Scottish Widows should pay the full amount because at the very least this will ensure that in future they will keep their records properly and act appropriately.

  3. The obligation to disclose assets on a divorce is imposed on the parties to that divorce. If the husband decided not to disclose then he takes the consequences if he is proved to be wrong.
    Scottish Widows should not disclose confidential information without the husband’s authority and I should imagine that this was done in error rather than because they were taking a principled stand. Whatever the reasons I think they should pay up the full amount plus costs, if only to prompt them to remember their obligations in future.
    I am not condoning the husband’s actions in seeking not to disclose his pension and if he is proposing to do this unlawfully then I hope he and his adviser face the full consequences. However, Scottish Widows should still act within the rules of the Data Protection Act and not choose to ignore it. To do otherwise could result in all kinds of fraud.

  4. Widows seem to be hiding behind the fact that the pension possibly should have been disclosed as a justification for their blatant breach of client confidentiality and data protection rules.

    It is not for them to even pass comment on the clients disclosure obligations, it is nothing to do with them! You would hope that if a potential x partner/spouse called/wrote to Widows asking for information they would not disclose it, or are they saying they would be justified if they did??

  5. Some people decide to exclude pension rights as part of a divorce settlement, but then if they see the numbers they change their mind, so it is wrong to presume that inappropriate or inaccurate disclosure went on, but totally right for Widows to pay £50,000

  6. I understand the points made about data protection and Scottish Widows should have not disclosed but we should also not be encouraging parties of a divorce to hide assets.

    My understanding of divorce law is that if a party does hide assets in a divorce proceeding then the ex-partner can reopen those divorce proceedings even 20 years later. How many of us really explain this to clients who are getting divorce and we also shouldn’t forget the divorce law does cut both ways nowadays with wealthy women having to share pensions as well.

    Personally I don’t think Scottish Widows should be liable for the £50,000 plus legal costs as the ex-husband had a duty to disclose this pension to his ex-partner and therefore he was effectively breaking English law by nondisclosure.

    Two wrongs don’t make a compensation claim!

  7. Such a can of worms. If the non-disclosure by the husband was improper (which I am not prejudging), in assessing the consequential loss, surely Scottish Widows could not measure loss against a position that could only apply unlawfully? How could the provider base loss on something that would require it to effectively recognise as legitimate something that might amount to an attempt to deceive the Courts?

  8. The policy in question does not mature until May next year so its not a question of whether the husband has disclosed or not disclosed and in turn broken any law….he had until May….instead Scottish Widows have done it for him. They then followed up the breach with a telephone conversation with the ex wife in which they disclosed the options available to the husbad when his policy matured.

  9. Customer has received legal advice – our experience is that lawyers know very little about this subject!

  10. He who seeks equity must come with clean hands…

  11. So he has failed to disclose his pension assets. But she has opened a letter addressed to him. Isn’t that a criminal offence itself?

  12. Not enough information to pass a significant comment on, but I am inclined to agree with Marcko’s point.

  13. As he should have disclosed all of his assets I don’t know what his problem is.

    Is he admitting that he ignored any court order to disclose all of his assets?

  14. Harry: It is not necessarily an offence to open someone else’s mail.

    The law (Postal Services Act 2000) states that “A person commits an offence if intending to act to a person’s detriment and without reasonable excuse, he opens a postal packet which he knows or reasonably suspects has been incorrectly delivered to him.” The words “intending to act to a person’s detriment and without reasonable excuse” are tricky. The wife could argue that she was checking to see whether the letter was anything important or just junk mail. Whether that would stand up in court, who knows, but I wouldn’t want to be the one attempting to prosecute.

  15. Whilst Scottish Widows are undoubtedly at fault, the wife or her LPR’s are entitled to the information anyway so what financial detriment has the customer suffered that he wouldn’t anyway?

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