An influential group of MPs has attacked HM Treasury over its handling of the redress scheme for Equitable Life policyholders, saying it “failed” to learn lessons from previous schemes and that, as a result, more than 230,000 individuals may not be compensated.
The Public Accounts Committee has demanded the Treasury and National Savings and Investments explore options to use data from the Equitable Members Action Group to contact policyholders as 236,000 may otherwise miss out on payments..
In its latest report the committee criticises The Treasury for refusing to examine the data previously provided by the action group on 350,000 policyholders over Data Protection Act concerns, saying it did not explore alternative options to overcome these issues.
The Treasury currently estimates that it may not trace 17 to 20 per cent of policyholders.
The committee also recommends that the Treasury should accelerate its planned publicity of the closure of the Equitable Life payment scheme so that eligible policyholders will be aware the scheme is closing and can come forward.
The Treasury and NS&I do not plan to publicise the closure of the scheme until September, which limits the time allowed for some policyholders to find out about the closure and submit their applications for compensation, the committee warns
The scheme closes in March 2014 and the Treasury’s objective is to pay all eligible policyholders by this date.
The report states: “When setting up the Equitable Life Payment Scheme, HM Treasury failed to learn the lessons from previous government compensation schemes. It focused on an arbitrary deadline for making the first payments to policyholders rather than on detailed operational planning and clearly defined responsibilities.
“This weak set-up led to a series of administrative failures including delays in making payments to policyholders and poor customer service. There is yet another arbitrary deadline of March 2014 for closure of the scheme, increasing the risk that some policyholders, who remain untraced, will miss out on receiving the money they are owed.”
