The Financial Services Authority is changing its rules to require firms explicitly to warn endowment policyholders who have a high risk of shortfall of the date that their right to make a complaint about the sale of the policy expires. The rule changes will come into effect on 1 June 2004.
The FSA also says that companies must warn policyholders at least six months in advance that they are nearing the end of the three-year limit. So far, more than 450,000 complaints have been made about mis-sold endowments.
For firms who wish to time-bar such complaints, the revised rules will require them to:
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Make clear to policyholders that they have three years from their first 'red letter' to complain
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Issue the time bar warning at least six months in advance of the date from when the customer would be time-barred from making a complaint
This notification is likely to be in a customer's future reprojection letter.
Anna Bradley, FSA's Director, Retail Themes, said: "We are applying these measures straightaway to ensure that consumers who believe they were mis-sold their endowment policies are clear about the date their right to complain runs out and to address concerns that some consumers could unwittingly lose the opportunity to claim compensation.”
A number of firms are not imposing time limits on endowment complaints received. These rules ensure that where firms do impose time limits, or decide to do so at a future date, consumers are made aware of the time their right to complain expires.
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