Pru puts squeeze on ambulance chasers

Insurance giant, Prudential, has confirmed it's to stop paying customer compensation - regarding endowment complaints - to third-party complaint firms.

Firms are to be informed by letter that all payments due as a result of settling endowment complaints will now be made straight to the customer.

This will take effect immediately. Where the Pru is currently dealing with complaints received via third parties, the compensation will still be paid directly to the customer, who will then have to pay the company for their services.

Pru will also write to any new complainants using a third-party, to tell them that they can complain direct themselves - thereby benefiting from the full compensation without having to first give up a chunk of commission to another company. This move is designed to save customers the average 25% and up to 50% in some cases of any pay-out that is normally clawed back by outside firms.

The insurer's figures show that it paid out £1.7 million in the past 12 months to customers who used third-party firms to handle their endowment mis-selling complaint - the average commission charged for such complaints being 25%.

The insurer says it will investigate any endowment mis-selling compensation complaint free of charge - the amount of compensation paid being calculated to put customers back in the position they would have been had they taken a repayment mortgage rather than an endowment loan.

Customers already contracted to third-parties will be treated exactly the same as customers complaining on their own. Any contractual matters will have to be settled with the third-party complaint handlers. Where customers have already agreed to terms from third-parties, successful resolution of complaints will mean those customers will have to pay the third-party.

If you have a complaint about your endowment you should contact either the financial adviser who recommended it or Prudential on 0800 000 000. The Financial Services Authority consumer helpline on 0845 606 1234 can help you trace the financial adviser if you are having trouble.

Moneyextra.com recommends you take independent financial advice before acting on any article

2005-04-27 10:51:58 © Moneyextra.com