ALERT: Prudential Compensation Payments

ScottishNotAmicable

March this year Prudential informed me they had undervalued my Scottish Amicable 8.7% GAR fund ~£11,000 (Surprise surprise) My NRD was9.25 years ago (March 2016) when the annuity was bought.

They stated they would compensate me to cover my loss without stating the rate.
I asked for a breakdown and they informed me I will get Bank of England +1%.
 
The Prudential is regulated by the FCA therefore the Financial Ombudsman rates apply - 8% simple. Also when they missed my NRD by 1.25 years they paid me compensation at 8% simple.

I gave them a deadline and last week they sent me a cheque with BoE +1%. I have informed them that I accept the cheque as part payment only and re-iterated the compensation rate that should apply.

I informed them that if they do not apply this rate and send the balance with another cheque, I will complain to the Financial Ombudsman AND I will request the Ombudsman refer the fund to the FCA for investigation because of their past actions regarding this fund.
See Here
https://forums.moneysavingexpert.com/discussion/6611371/prudential-scottish-amicable-and-scottish-widows-gar-funds-alert#latest 

DullGreyGuy

ScottishNotAmicable said:

They stated they would compensate me to cover my loss without stating the rate.
I asked for a breakdown and they informed me I will get Bank of England +1%.
 
The Prudential is regulated by the FSA therefore the Financial Ombudsman rates apply - 8% simple. Also when they missed my NRD by 1.25 years they paid me compensation at 8% simple. 

The FOS is currently reviewing the interest rate that is paid (see https://www.financial-ombudsman.org.uk/news/consultation-compensation-interest-levels-launched-financial-ombudsman-service) with their recommendation being that it is changed to be BoE + 1% which will apply to all new cases after the decision is made. 

Decision on the proposal is anticipated in September with implementation ASAP. There is a proposal, though not recommended, that it apply to all cases immediately and so certainly could be a motivation to get any complaints in at the earliest opportunity. 

ScottishNotAmicable

Thank you for that info, unfortunately I must wait 8 weeks before I can lodge. I have a little space - but they may delay.
Strange, I believe 8% was set because that matches a successful  court case award.

ScottishNotAmicable

Just checked small claims court in England, Limit £5000 and interest is 8%. (Scotland where they have offices its still £3000 but 10% interest my claim is just over 5k)
I have previously prosecuted and defended successfully small claims in Scotland against Ryan Air (later lost on jurisdiction), Scottish bank fees (for my son) and a Legal firm (against a QC). Usually they go nose to nose - Scottish Bank folded 30 minutes before the case was called!!
So if the ombudsman case is too late I will simply take them to court in London.

dunstonh

I informed them that if they do not apply this rate and send the balance with another cheque, I will complain to the Financial Ombudsman AND I will request the Ombudsman refer the fund to the FSA for investigation because of their past actions regarding this fund.

The FOS will not report things to the Food Standards Agency.       They also do not report cases to the FCA in the way you appear to want them.   The FCA collects data and will review cases where trends are identified.   If yours is a one-off then the FCA won't be interested.   If yours is one of many, then the Pru would probably have already referred it to the FCA.    

Indeed, the fact that they approached you rather than you approaching them indicates that it has arisen as part of a past business review, and these are nearly always conducted with the FCA kept in the loop.      The Pru has carried out a past business review for all annuity sales between July 2008 and September 2017.   These reviews can lead to other issues being identified and require putting them right.

ScottishNotAmicable

 LOL on Food - I'm old when it used to be Financial Standards?
I did read that Ombudsman can refer cases to FCA, that's why i said that. My concern is that the Prudential has compelled members of this fund to accept a combined annuity with the other unrelated fund. My brother with identical case raised Pension Ombudsman complaint and Prudential admitted 'error'. Problem is that Ombudsman is not awarding him Cash for the non GAR fund at the moment (under appeal). I suspect all members have been treated this way.

DullGreyGuy

ScottishNotAmicable said:

Just checked small claims court in England, Limit £5000 and interest is 8%. (Scotland where they have offices its still £3000 but 10% interest my claim is just over 5k)
I have previously prosecuted and defended successfully small claims in Scotland against Ryan Air (later lost on jurisdiction), Scottish bank fees (for my son) and a Legal firm (against a QC). Usually they go nose to nose - Scottish Bank folded 30 minutes before the case was called!!
So if the ombudsman case is too late I will simply take them to court in London.

Small track limit in principle is £10,000, its £5,000 for personal injuries which is unlikely to be considered by the FOS. The financial limits however are supposed to be indicative and its actually the likely duration of the hearing that is supposed to define the track but judges are encouraged to put cases into the lowest track possible so you will see some cases under £10k being heard in Fast Track and you will see some over £10k being heard in Small Track. 

Case limits are broadly irrelevant however given statutory interest applies to all cases irrespective of track where no other interest rate had been agreed. B2B is worse as its 8% + BoE however it would be rare to have a B2B contract that doesnt stipulate an interest rate on breaches. 

It could be interesting to see if there is a move from the ombudsman to the courts if the proposed changes in interest goes through though for those with the bigger losses it becomes more of a gamble if you lose and in principle less cases should go in favour of the consumer (currently its circa 35%) given the courts apply the letter of the law whereas the ombudsman is bound to find fair outcomes and not to follow the letter of the law.

dunstonh

I did read that Ombudsman can refer cases to FCA, 

It can but it tends to be cases where fraud could be in play or where the firm is not complying with its regulatory requirements to the FOS.     It wouldn't do in your case as it's a disagreement on a resolution which needs independent arbitration.