Norman Lamb welcomes the Financial Services Authority rule change over endowment mortgage reprojection letters.
11.43.30am UTC (GMT +0000) Wed 9th Jun 2004
Norman Lamb has welcomed the rule change by the Financial Services Authority which will require Life companies to explicitly inform endowment policyholders in red reprojection letters of the expiry date of their right to complain. Policyholders with a high risk of losing money have 3 years from the receipt of their first red reprojection letter, and 6 months from receipt of the second, to make a complaint for misselling.
During Treasury Select Committee evidence sessions, Mr Lamb pressed Life company representatives to explain why they had excluded the expiry date of the policyholder's right to complain from both first and second red reprojection letters.
"If people don't know when a deadline expires, how can they be penalised for missing it?" Mr Lamb pointed out. "But when I questioned them, the Chief Executives of the Life Companies refused to agree to mention the right to complain in red reprojection letters, even though the start of the right to complain 'window' is triggered by the letter!"
Mr Lamb also referred to the Government response to the Treasury Committee report in which the Government notes that an estimated 700,000 people may have missed their deadlines to complain for misselling. He is calling for Life companies to allow complaints from those people whose time limits have already expired.
"I am pleased that the FSA has changed the rule - it is long overdue." Mr Lamb said. "But now the Life companies should respond to those policyholders who have, unknowingly, missed their right to complain 'window' and voluntarily waive the elapsed deadlines."
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