With annual revenues of £4.2bn, the Phoenix Group is a financial giant, and is one of the largest insurance providers in the UK. This group includes Phoenix Life and Scottish Provident.
After a retired financial advisor called the company to enquire after the amount charged for his insurance, he then got in touch with several news outlets. He wanted to advise customers that anyone with a Scottish Provident policy (provided by Phoenix), may want to check and see if they are owed any money back.
After Phoenix bought up several pension funds, known as ‘zombie funds’ due to their inability to change to new accounts, the financial advisor claims they charged at least a fifth extra on top of the existing policies, and raised premiums for the owners of these policies.
Phoenix has commented on the claims, but are denying this practice has been applied across the board. Instead, they say that this situation is unique to the individual account and it was simply a mix up with the polices, and will not be affecting anyone else’s. They have said they will be reviewing their own policy practices and the policies of their customers as well.
The financial advisor who first raised the issue has commented on the statement, saying that he advised the firm of their errors more than 12 months ago, and he is very surprised to see that no action has been taken or no more information gathered.
With a customer base of over 5 million policy holders, if they have overcharged even a small percentage of them, Phoenix may end up having to re-fund huge sums of money. As well as potential re-funds, Phoenix will have to battle this negative public opinion in a climate where unethical financial institutions are already very poorly thought of after the various financial crises recently.
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