FOS
The latest ruling by the Financial Ombudsman Service (FOS) will come as a warning call to providers to buck up their ideas when dealing with consumer claims, writes Lucy Quinton.
It is a warning to providers that if they cannot prove a client is guilty then they should pay out.
The ruling is the result of a case where Scottish Widows failed to pay out to a widow a £250,000 life policy but the FOS eventually ruled in the consumer's favour and recommended the provider pay out the full amount.
This represents one of the biggest rulings won by an individual against a provider on a disputed claim. There have been other life cases where the FOS has made recommendations that exceeded £100,000 but normally the amount is less.
Johnny Timpson, head of distribution development at Scottish Widows, said that, while the provider did not agree with the particular ruling, it was keen to support the principles of the FOS, which is paramount.
He said at the time when the case was put forward that no back-end copy had been submitted to the consumer for them to check information that was to be submitted. This process has now changed, he added.
Timpson also said that now every client is able to check and verify data entered on their behalf prior to submission.
At Legal & General, Russ Whitworth, claims and underwriting director said it had established a senior panel of claims advisers to review claims that are to be declined before a final decision is made. He added that tele-interviewing and tele-underwriting at application stage also takes the burden of capturing medical and lifestyle information away from brokers.
Emma Parker, spokesperson at the FOS, said lessons can be learned individually as cases are considered individually and that, perhaps, sales or advice processes could be improved. However, she said that, because cases are often reviewed later down the line, often changes were already in force. There is no stance, generally, to be harsher to providers overall, Parker confirmed.
