FSCS launches online service for endowment claimants
1 February 2006
Consumers who want to make an endowment claim against a firm that is no longer trading can now get help online.
The Financial Services Compensation Scheme (FSCS) has launched an online service to help people who think they may have been mis-sold an endowment policy decide whether they have a claim that FSCS may be able to help with.
FSCS is the UK's statutory fund of last resort for customers of financial services firms. This means that FSCS can pay compensation to consumers if a financial services firm is unable, or likely to be unable, to pay claims against it. The service is free to consumers. FSCS is funded by levies on authorised financial services firms. It covers deposits, insurance, mortgages and investments.
The new online questionnaire, available on the FSCS website, www.fscs.org.uk, is designed to help speed up response times for consumers. It will help people determine whether FSCS may be able to help with their endowment complaint, and will automatically generate an application form for those who may have a claim.
Loretta Minghella, FSCS chief executive says: "FSCS plays a vital role in protecting consumers and maintaining confidence in the industry. Without our help thousands of consumers would have nowhere to turn. Since we became operational on 1 December 2001, FSCS has paid consumers over £650 million in compensation.
"Over the past couple of years endowment claims have been received at unprecedented levels, way beyond our expectations. The processes we are putting in place should ensure a faster response for consumers and help us to deal with their enquiries more quickly."
The majority of new investment claims received by FSCS over the past couple of years relate to mortgage endowment claims. It is expecting to receive 22,000 new endowment claims in the financial year 2005/06, and a further 26,000 in 2006/07. This compares to just under 9,000 new endowment claims received in 2004/05.
These increases have had an impact on the overall time taken to process consumers’ claims. Whilst FSCS has been building up its capacity to deal with higher claims volumes, some consumers have been waiting longer to get a decision on their claim than FSCS would like. FSCS is planning to complete 63% more endowment claims in the financial year 2006/07 (24,500), compared to this financial year 2005/06 (15,000). The overall number of investment claims in total forecast to be dealt with during 2006/07 will be an increase of over 500% compared to the number of claims dealt with in the full financial year 2004/05 (4,900).
