Angela said she met with her financial adviser Stephen in March 2011, and told him she wanted income protection insurance to cover her in the event of her being made redundant.
Angela said Stephen told her the policy he had arranged for her provided cover in the event of redundancy.
In February 2013 Angela contacted Stephen as she wanted to review her insurance. Angela met with Stephen’s colleague, Tom. Angela said Tom told her Stephen had made an error when he placed her insurance, and that the policy would never cover her in the event of redundancy.
From February 2013, Angela said she tried to contact Stephen to discuss the issue and was only ever able to speak to another of Stephen’s colleagues, Tracey. In October 2013 Angela cancelled the policy.
Angela complained to FSCL. She wanted Stephen to refund her the premiums she had paid ($1,665), because she said Stephen had misrepresented to her the extent of cover under the policy.
Angela also complained that she had been unable to contact Stephen to resolve the issue, and was only ever able to speak to Tracey.
Lack of a report
We opened the investigation of the complaint and asked for Stephen’s report and file on the complaint by 27 January 2014. By 21 February 2014 the report had not been received, despite our case manager following up with Stephen several times, and despite Stephen saying that the information was on its way.
As we did not receive any information from Stephen within a reasonable time, our CEO issued her preliminary view on the complaint without it. Our CEO said that as we had only heard Angela’s side of the story and Stephen had not provided any information to rebut her allegations, we had to accept Angela’s evidence and Stephen should pay Angela $1665.
Our CEO also formed the view that it was appropriate for Stephen to pay Angela $500 to compensate her for the inconvenience caused by Stephen’s non-communication when Angela was unable to speak with him for 8 months about the issue.
We also pointed out to Stephen that his failure to refer Angela to FSCL at any point after she first raised the complaint with him (February 2013) was a breach of FSCL’s terms of reference (“TOR”). We were of the view that if the referral had been made, the complaint would have been resolved much sooner.
It was also a breach of the TOR when Stephen did not provide information to FSCL within a reasonable time period.
Stephen then contacted FSCL and said it appeared he did not ‘tick the correct box’ when placing Angela’s insurance, and as a result of his human error, it appeared Angela had not been covered in the event of redundancy.
Stephen said he would pay Angela the full amount of $2,164.44. Stephen then did not pay Angela the funds within the time stated on the FSCL’s settlement agreement (10 working days). After we followed up again with Stephen, he finally made the payment to Angela.
Lesson to be learned
The sooner a complaint is acknowledged and action taken to try and resolve it, the better. Ignoring a complaint will not make it go away, and will often aggravate the situation.