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ombudsman news

issue 36

April 2004

about this issue

Some of the disputes that are referred to us are outside our "jurisdiction" - which means we have no power to deal with them, whatever their merits. In this issue we outline the criteria we use when establishing whether complaints against banks and building societies are within our jurisdiction.

We also discuss the small but increasing number of insurance disputes referred to us where firms have varied the terms of an insurance policy after the customer has bought it. We have seen cases, for example, where a travel insurer has sought to exclude from cover not just any medical conditions that customers suffered from before they took out the policy, but also any medical conditions arising between the start of the policy and the start of the holiday.

We would not normally expect a firm to issue a policy and later change its mind about what cover - if any - it will provide. And we do not necessarily consider the terms of such policies to be fair and reasonable - particularly if they were not highlighted when the policy was sold.

Following on from last month's article about calculating compensation for mortgage endowment mis-selling, we give further examples of cases where the firm has been uncertain of the approach to take. The situations we look at are where the firm has argued that the customers failed to "mitigate their losses", and where the complaint involves the sale of more than one mortgage endowment policy to the same customer.

Finally, in this month's "ask ombudsman news", we hear from the director of a small firm of independent financial advisers, asking whether our increased caseload will impact on the amount that firms have to pay for our service.

Walter Merricks, chief ombudsman

ombudsman news issue 36 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.