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Equitable Life – delay leading to penalty 2

United Kingdom
31/01/2003
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Reference: L00504

The complainant had an individual arrangement with Equitable Life. The case concerned poor administration by Equitable. In April 2001, he wrote to Equitable for a transfer quote. He chased them in May and June. He finally received his quote in August. However, Equitable had announced in July that leavers would suffer from a 10 per cent deduction and allowed him only 14 days grace to determine what to do. He took 17 days (during which time he obtained detailed financial advice) and so Equitable subjected him to the 10% penalty. Equitable acknowledged maladministration in relation to the delay and the Ombudsman said "there seems little doubt that Mr Craik was anxious to take his Policy benefits and I find, on the balance of probabilities, that he would have done so before 16 July 2001 if Equitable Life had not delayed in providing him with the information he required. Thus had there not been maladministration by Equitable Life he would not have suffered the consequences of the devaluation of his fund…". In addition, the Ombudsman said the "14 day deadline was very tight, particularly when compared with the period of delay for which Equitable Life had been responsible, and it is my conclusion under the circumstances that it was an unreasonable deadline…". Equitable were therefore directed not to apply the 10 per cent penalty.





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