The diagnosis came out of the blue. James Lloyd* is 41 and had not had to visit a GP in five years. In May he was told that he had stage 4 bowel cancer. The treatment and surgery have prevented him working and his wife, Julia, has had to take extended leave from her job to care for him.
James had bought critical illness cover from Royal London, which promises “the financial stability you need to cope with the money worries that illness and death can bring”, but six months after making a claim, he is still waiting for the £30,000 lump sum and £1,200 a month protection payments the couple needs to survive.
“I will soon be on half pay because of the months I’ve been off work and we’ve had to remortgage our house, which is costing us £100 a week more,” says Julia. “We are keeping afloat thanks to our families, but with winter coming we are scared.”
The Lloyds are among a number of readers coping with critical illness or bereavement who have contacted the Observer after being let down by financial services.
There is a common theme to their complaints – reports of obstructive processes, poor communications and distressing insensitivity. Their experiences suggest that some City firms are failing to abide by guidance on fair treatment of vulnerable customers issued by the regulator, the Financial Conduct Authority.
Julia says the stress of chasing Royal London for updates has compounded the couple’s anguish.
“At one point, they were questioning James’ mental health because he had been on antidepressants six years ago, which caused us huge distress,” she says. “I can’t phone any more. I wait 30 minutes to be told nothing. It is traumatic.”
Royal London says: “We’re sorry for the delay on this case, which is being reviewed as a matter of urgency. The claims assessment involves requesting information from treating doctors to make sure the definitions are met, and the original application form was completed accurately.”
The claim was approved three days after the Observer intervened and £400 added in compensation.
Other families report harrowing ordeals when trying to obtain pension and insurance payouts after a bereavement. When Andrew Slater’s* partner, Denise, died suddenly of an undiagnosed heart condition last year, he notified her private pension provider, Scottish Widows.
Twelve months later, he was still awaiting a payout and says he was told on three occasions that Denise would need to come to the phone to authorise any action.
Unlike other providers, he claims the company was unwilling to accept the interim death certificate issued pending the inquest, or the final death certificate issued in May which confirmed death from sudden arrhythmic death syndrome.
“I will never forget the impact when an agent told me bluntly, over the phone, that they were not processing the claim as they could not rule out third-party involvement in Denise’s death,” he says.
“It made me wonder if our two sons were somehow under suspicion without me knowing anything about it. To use those words when speaking to someone dealing with the loss of their partner of 27 years was unforgivable.”
Scottish Widows ceased communications during the summer, according to Slater, who says his emails received no response and that he had no idea what stage his claim was at.
“There have been many occasions when I felt like giving up and forgetting it however much the fund is now worth, but the memory of Denise and her own hatred of injustice is keeping me going,” he adds.
Scottish Widows formally approved the claim three days after the Observer took up his case. It says: “We are sorry for falling short of our usual standards at what must have been a very difficult time. We will be making a payment for the distress and inconvenience caused.”
Timothy Christie* was kept waiting for four months by Scottish Widows after his wife died. He was owed £44,875 from the Lifetime Security Plan, but only received it after the Observer stepped in, while Ben Macintosh* accused the firm of “inexcusably heartless” treatment after his father died in February.
“I made repeated attempts, both by telephone and letter, to get Scottish Widows to pay out his life assurance policy,” he says. “On two of the phone calls it was suggested the sum assured was £66,000, not the expected £76,000.”
Scottish Widows paid the full amount owed plus compensation seven months later when the Observer questioned the delays. It says: “We recognise some customers have experienced levels of service below what we’d expect, and for that we’re sorry.
“We’re working to improve our service by recruiting and training more staff, investing in our systems and simplifying procedures.”
FCA guidance requires companies to train all frontline staff in sensitive handling of vulnerable customers and expects processes and communications to meet their needs.
However, Allen Barker says he was staggered by the insensitivity of Halifax when he tried to settle his late brother’s affairs. “I had to pay an outstanding balance on his mortgage … the bereavement unit couldn’t process the payment, so passed me to the mortgage servicing team,” he says.
“After a long wait on hold, the latter told me to use the automated payment system which, predictably, would not accept the payment because I was not the account holder.
“I was directed to two call handlers, on dreadfully poor lines, and each time had to repeat my brother’s details. Payment was eventually made after 80 minutes of hassle.
“When I rang the complaints line I was put on hold, then accidentally disconnected. Eventually, I got through, only to be told my call would be redirected to the mortgage servicing team.”
It is unacceptable that anyone has to be subjected to needless pain and stress when contacting companiesSteven Wibberley, Cruse Bereavement Support
Halifax claims it offers a bespoke bereavement service and staff are trained to support grieving relatives. It apologised and offered a goodwill gesture after the Observer alerted the bank to Barker’s experience. It says: “We have genuinely listened closely to the feedback Mr Barker gave us and are committed to acting on it.”
A charity, Cruse Bereavement Support, is campaigning for the government to introduce a compulsory standard for companies, including an agreed time frame to settle the accounts of deceased customers, streamlined processes to avoid duplicated demands, and dedicated bereavement channels.
Chief executive Steven Wibberley says: “A bereavement can be one of the most difficult experiences a person goes through, and it is unacceptable that anyone has to be subjected to needless pain and stress when contacting companies. We are calling, once again, on government and regulators to step in and ensure grieving people are appropriately and compassionately supported.”
The FCA says: “Since we published our vulnerability guidance we’ve seen improvements in firms’ treatment of the bereaved. Clearly, however, some have more work to do.
“We take any reports of customers being treated unfairly seriously and expect firms to assess how well they’re supporting all customers, including those in difficult circumstances.”
* Names have been changed