Not upheld: Service failures generally complaint against Phoenix Life Limited

Decision detail

Summary

Mr H complained that Phoenix Life Limited incorrectly delayed releasing his endowment policy maturity proceeds from December 2020 to November 2023 and provided poor communication. The policy had been assigned to a Bank in 1981, and Phoenix correctly required confirmation that the Bank no longer held an interest before releasing funds. Phoenix made errors by not chasing the Bank frequently enough and by communicating via letters to Mr H's UK address despite his request for encrypted emails, as he lived abroad. However, the ombudsman found Phoenix was not solely responsible for delays as it was reliant on the Bank's response, which was likely affected by COVID-19 disruptions and the age of the assignment. The ombudsman upheld Phoenix's awards of basic interest (£2,411.91), late payment interest for the final period (£1,170.14), and £800 compensation for distress and inconvenience, declining to award late payment interest for the entire period or additional compensation.

The Ombudsman's reasoning

The ombudsman concluded that Phoenix was correct to delay payment pending Bank confirmation as the policy had been validly assigned. However, Phoenix made errors by not proactively chasing the Bank more frequently and by failing to communicate with Mr H using his requested methods (encrypted email/telephone), instead using letters to his UK address. Despite these errors, Phoenix was not solely responsible for all delays because: (1) it was reliant on the Bank to provide critical information outside its control; (2) the Bank's failure to respond was likely affected by COVID-19 disruptions; (3) the assignment dated back nearly 40 years making records difficult to locate; and (4) between March-August 2023, delays were caused by Mr H's financial advisor not returning the maturity form. Therefore, basic interest rather than late payment interest was appropriate, and the £800 compensation for distress and inconvenience was fair given the errors caused frustration and confusion over a sustained 2.5-year period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website