Prudential has announced it will stop paying customer compensation claims directly to third-party firms.
The provider says this will include mortgage endowment compensation claims which it will instead now pay direct to endowment policyholders.
Prudential says in the last twelve months it has paid out £1.7m in compensation to customers using third-party complaint firms for mortgage endowment mis-selling but that at least 25% (amounting to £438,000) of this has gone to the third-party firm in commission.
Mark Wood, chief executive of Prudential UK and Europe, says while the provider has no specific issue with third-party complaint firms, he is concerned many endowment policy holders will not know they can approach Prudential direct.
“If a customer has been mis-sold an endowment then they are entitled to compensation and we firmly believe they should receive 100% of the compensation. At the end of the day, this compensation is calculated to put the customer back into the position they would have been if they had taken out a repayment mortgage,” he adds.
Changes to the way compensation claims are paid out will take effect immediately.
Prudential says any existing compensation case submitted through third-party complaint firms will also be paid direct to the customer, leaving the decision about payment to the complaint firm down to the customer themselves.
Prudential will also write to all new complainants who are using a third-party firm to inform them that they can deal with it direct.
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