Aviva Endowment Error - shortchanging customers compensatory interest

WallyMan

A couple of weeks ago my wife received a letter from Aviva in regard to an error they made 3 years ago on the calculation of the maturity value of her endowment. It appears they failed to correctly calculate the final year bonus.

While a cheque for £800 may be welcome I am disappointed to report that Avivia are only providing Bank of England + 1% compensatory interest from the point of maturity.

I know they should be providing 8% simple interest (per annum). This is the amount that both the FCA expect and FOS will instruct them to pay.

If anyone has one of these letters can I suggest:
1 - you write to Avivia and request they recalculate using 8%. I have done this (PM me if you'd like a copy of my letter)
2 - If they fail to respond within 2 weeks or respond without resolving this issue take your complaint to FOS who will instruct them to pay 8%

I also plan to write to the FCA to make them aware of this situation. It's completely unreasonable for them to do this. The majority of folk will not be aware.

dunstonh

I know they should be providing 8% simple interest (per annum). This is the amount that both the FCA expect and FOS will instruct them to pay.

That is on compliant resolution. The FOS regularly use comparable savings rates instead of the 8% depending on the reason.

Daniel54

WallyMan wrote: »

While a cheque for £800 may be welcome I am disappointed to report that Avivia are only providing Bank of England + 1% compensatory interest from the point of maturity.

They made a mistake and are obliged to put you back to the position you would have been in had the mistake not occurred.

Over the past three years you would not have earned 8% interest in a deposit account

EDIT

There is specific reference on the FOS website that they can apply BOE rate plus 1% in some instances

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/33/awards-33.htm

In any complaint to Aviva I think you would need to have asserted why this level of redress should not have been applied.If refuted by Aviva,it would seem clear there is no guarantee the FOS would subsequently agree with you