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Watchdog Merricks sees endowment trouble ahead

Chief financial ombudsman Walter Merricks is expecting further endowment shortfalls as a result of troubled markets, which he says will result in increased complaints.

In an interview with Money Marketing, Merricks said: “Reprojections will no doubt be at lower surrender values, opening a larger shortfall, which will encourage more complaints.”

The Financial Ombudsman Service says mortgage endowment complaints account for just over half of its caseload.

The industry has to send out reprojection letters to mortgage endowment policyholders every two years. The last round began two years ago and ended in July this year.

Consumers&#39 Association senior policy adviser Mick McAteer says: “The FSA should be pulling out all the stops. The regulator should publish a list of performance data so that consumers could see which are the providers with the biggest problems.”

Axa Sun Life marketing manager Steve Muir says: “Merricks is probably right. We are expecting at least more requests for information, which will result in a greater amount of communications from customers.

“It is important to rem-ember that these are long-term products. It would be irresponsible to make predictions.”

Merricks profile, p41

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