Whitechurch Investment Services and Tudor House Financial Services are two of the 16 firms whose clients could now stand to gain from compensation paid from the Financial Services Compensation Scheme.
Latest list of ‘default’ firms issued by the FSCS says policyholders at Bristol-based Whitechurch Investment Services – which caused controversy last year by legally ‘dumping’ its policyholder liabilities onto the FSCS in the same manner as firms such as Berry Birch Noble Financial Services – should now receive compensation payouts for mis-selling up to a maximum of £48,000.
Likewise, partners at Wrexham-based Tudor House Financial Services has now been declared in default after the FSA Tribunal withdrew the firm’s permission to conduct regulated business on November 1st and the firm was subsequently forced to close. Policyholders may now gain compensation if there is a case to answer.
At the time authorisation was withdrawn, Tudor House was just days away from taking the Financial Ombudsman Service to task in a test case through the Royal Courts of Justice, to challenge the £500 fee imposed on every IFA whose clients submit a compensation claim to the body.
The FSA argued back in November 2002 it had withdrawn authorisation – see story: Welsh IFA forced to withdraw case against Ombudsmanbecause the firm had failed to comply with five outstanding compensation awards set by the FOS and dating back to the previous year.
Tudor House, on the other hand, argued at the time – see previous IFAonline story: IFAonline investigation: charges confusion may have created endowment shortfall - it had refused to pay the compensation awards because it had evidence suggesting the compensation being paid to top up endowment shortfalls, as a result of suggested mis-selling, may be the result of regulatory requirements on providers to use Lautro rates in illustrations which did not reflect the true charges consumers would be paying.
Other firms declared in default are:
The FSCS also points out all policyholders of insurance intermediaries will be covered by the Financial Services Compensation Scheme from Saturday 15th January, once insurance products and advisers fall under FSA regulation.
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