Ombudsman blasts Zurich’s sluggish rebate switch

Zurich was also slammed for ‘inappropriately’ ignoring a formal request for information from the Pensions Ombudsman.

The Pensions Ombudsman has upheld a complaint against Zurich Assurance for failing to promptly forward rebates to a switching customer’s new provider.

According to the ombudsman, Mr D J Ryan complained that when he switched from the Zurich Personal Pension plan to a Skandia product, Zurich did not forward one rebate in good time and failed to pass on another rebate altogether.

The ombudsman criticised Zurich for prolonging the complaint process for Mr Ryan.

The ombudsman’s office requested information regarding the case from Zurich in writing on 15 August 2011, but did not receive a response.

On 31 August 2011, the ombudsman sent a letter by special delivery to Zurich requesting a formal response to the complaint.

Although it was recorded as received on 1 September, the ombudsman said no response has been received.

Mr Ryan changed pensions products in September 2007. However, Zurich received payments form HMRC on 1 June 2008, 2009 and 2010.

Zurich did admit on 1 June 2010 that the process had taken too long, and offered to make up any growth lost on the payment between 1 June and the date it was received.

On 6 May 2010 Skandia told Mr Ryan that because form CA1544 was not completed by Zurich he was still officially tied to them.

Skandia also alerted Zurich to this that day.

It was not until 10 August 2011 that Skandia received the 2009 to 2010 payment, and enquiries regarding the 2008 to 2009 payment remained unacknowledged, according to the ombudsman.

According to ombudsman Jane Irvine, initial confusion began with Zurich not completing the appropriate HMRC form.

She said: “This is maladministration, but it is also wrong for Zurich to take such an amount of time to either return rebates or forward them to Skandia. In my view such a process should take no more than two weeks.

“It is quite inappropriate for Zurich to ignore requests for information and a formal response to the complaint from my office.

“This has only served to prolong the complaints process and I make a separate award to account for the increased inconvenience Mr Ryan has been put to in dealing with the matter.”

The ombudsman ruled that Zurich pay £2,548 into Mr Ryan’s Skandia plan, increased at Bank of England base rates from 19 July 2010 to the date of payment, as well as paying base rate interest on £2,598 from 1 June 2010 to 17 February 2011.

Finally, the ombudsman requested Zurich pay £650 to Mr Ryan personally.