Mrs J found us via Facebook and came to us back in late 2020 wanting to know if she had been mis-sold a Free Standing Additional Voluntary Contribution (FSAVC) by Lincoln. Mrs J knew that is started around 1999.
Many of our client’s don’t have paperwork so we always start by sending the provider an information request to get all the information about client’s policy we need to make a detailed complaint. We did an information request to Lincoln for Mrs J’s policy information and after a week they sent it to us. Now we had all the details we were able make a letter of complaint to send to Lincoln.
2 weeks into Lincoln’s investigation into Mrs J’s complaint they wrote to us with a questionnaire request. They needed more information from Mrs J, so we went through the questions with Mrs J. We always like to do the questionnaires with the clients to get good strong answers to sometimes ambiguous questions. This was then completed and returned to Lincoln.
After another couple of weeks Lincoln had finished their investigation and said they had turned down Mrs J’s complaint. This means that they didn’t agree that Mrs J was due any compensation and that the policy was right for her.
The reasons Lincoln gave for this case to be turned down were that the recommendations to take out the policy in 1998 and increase the contributions later in 1998 both show that Mrs J was made aware of the generic differences between the IHAVC (In House Additional Voluntary Contribution) and the FSAVC.
The In-House AVC are where payments are taken directly from your pre-tax salary and put into an investment fund, which grows over time and helps to boost your retirement savings and FSAVC is where the payments are made by either direct debit or standing order from your bank account.
A Further discussion was held with Mrs J and we relayed what Lincoln had said about her case. She said she did have an In-House AVC with Prudential, so we then wrote to them to get the details of this. They came back to us after 3 weeks and said that Mrs J had an In-House AVC had been taken out prior to the FSAVC with Lincoln, so she was still within the funding limit so makes no real difference to the case.
Our general manager investigated everything we had on this case and decided we should pursue this with the Financial Ombudsman Service so that they can review the case. We advised Mrs J that cases that go to the Financial Ombudsman Service can take a while so not to expect a reply from them straight away, but we will keep her updated along the way.
We wrote to the Financial Ombudsman Service explaining that we believed that there was negligence from the advisor in giving Mrs J the advice to have an FSAVC plan. The plan was unsuitable for her and there was no real evidence in the sales file that Mrs J has been shown the differences in the charges between the FSAVC and the In-House AVC. Mrs J had lost out with regards to her retirement provision due to the poor advice given by Lincoln.
Our normal procedure is to chase the Financial Ombudsman Service after 2 Months to get an update for our client, they replied and said the case was with their admin team still waiting to be passed to an investigator. This is very normal as it can take a while for anyone’s case to be looked at the Financial Ombudsman Service because they are inundated with cases over a range of financial products. We would always update the client when we get updates on their cases.
After a week the Financial Ombudsman Service then contacted us to clarify the client’s reasons for complaint. Our general manager explained to them that Mrs J should have been given something other than generic information about the costs such as a working example. They also said they have requested the business file and will then investigate more once received.
Again, in line with our procedures we wrote to them for a further update after 2 months. We received a response from them saying they now eventually had all the information they needed to start investigating the complaint, they would update us once they had.
6 Months after submitting the complaint to the Financial Ombudsman Service we received an Investigators Decision to uphold the complaint explaining a charges comparison should take place. They gave Lincoln 2 weeks to reply to this. We phoned Mrs J to update her and give her the good news.
Unfortunately, Lincoln didn’t agree with the investigators decision and wanted it passed to an Ombudsman for a final review. We again called Mrs J to further update her on this we let her know that the case will take a while longer now that it needed to be passed to an Ombudsman, but we wouldn’t give up.
The Ombudsman completed their investigation after further 3 months and agreed with us and the investigator that the case should be upheld. This was a Great result for Mrs J and us, but that was not the end. These calculations can be very complex and can often take several months to complete.
Mrs J couldn’t believe how long this was taking but understood that as we had to take the case to the Financial Ombudsman Service and the also passed to an Ombudsman, they all had to make their own investigations.
Nearly 2 years after starting this process, we finally received an offer of compensation of £7779.63 for our client. Mrs J was extremely happy with this when we called her. After such a long wait, this was a great result and if we hadn’t pursued the case at the Financial Ombudsman Service, we wouldn’t have received any amount for Mrs J.