A firm led by Sir Howard Davies, the former chairman of the FSA, is conducting an internal review after it sent out letters signed by someone who no longer works there.
Sir Howard Davies, the chairman of Phoenix Life, has written to one of the company’s clients after he was sent letters and documents relating to a life insurance policy signed by an employee who had left to work at Lloyds Banking Group more than a year earlier.
In a letter to the client Sir Howard said the documents were still valid under a legal principle called estoppel – which means the person who signed them was judged to have the authority to do so by Phoenix.
He wrote: “With regards to the issue of out-of-date signatures, I can confirm that the internal process to rectify this issue is nearing completion and the names attached to future documentation will be up-to-date.
“Phoenix has, by its conduct, held out the signatory to have authority to act on its behalf in the letters you have received and you are therefore entitled to enforce such terms on reliance of this conduct.”
Mr Howard added: “Given that we have previously reiterated in writing that the authority contained within these letters was valid and enforceable, such authority has also been ratified ‘after the fact’.”
Earlier this year Phoenix admitted it had overcharged people with a Scottish Provident insurance policy.
A spokesman for the FCA said firms must communicate with their clients in a way that is clear, fair and not misleading.
He declined to say what action the FCA might take if it found an advice firm making this mistake.
Adviser view
Petra Griffiths, director of Sussex-based PSG Financial Solutions, said: “The FCA would throw the book at them if an adviser firm did that. It is quite concerning that this happened, but not surprising.”
