Questions of Cash: June 2014

Posted on September 17, 2014 · Posted in The Independent

Q. I’m writing about CPP’s compensation scheme [for the mis-selling of Payment Protection Insurance]. My husband was sold a policy in 2004.  He died in May 2013 and in August last year a letter came from CPP explaining that he may be eligible for compensation for mis-selling.  I informed CPP of his death and pointed out that the policy was held jointly and paid for from our joint bank account.  I sent my husband’s death certificate and documents proving my identity and that of my son as estate executor.  Eventually I was told by letter that if eligible I would receive a cheque in six to eight weeks.  I then had numerous forms and letters from CPP and I made several phone calls to CPP.  A letter then came addressed to me, but enclosing a cheque payable only to my deceased husband. I had closed his bank account in May 2013. My bank will not accept the cheque.  I approached Barclays Bank as it had issued the cheque, but it also refused to accept it.  I again spoke to CPP, explaining that I was unable to pay the cheque into my account and complaining about the way the matter was handled.  I was told by a supervisor that I would have to wait a further six to eight weeks for a cheque to be reissued. I have now received a letter from the Joint Scheme Administrator informing me that the reissuing of the cheque can take a further eight weeks.  He adds that this is their final letter in relation to my complaint and hoping that I am satisfied with the way the matter has been handled! I don’t feel that I should have to go through such a tortuous process to obtain compensation to which I am entitled. I am 81 and have been left feeling exhausted and frustrated. MA, Somerset.

A. CPP apologises for what it accepts was an insensitive and poor handling of this matter. You should have now received its cheque in full payment of the claim. Helen Spivey, CPP’s head of investor and corporate relations, responds: “The Scheme process includes the opportunity for those who wish to claim on behalf of a customer who has passed away. Our priority is to manage claims in these circumstances with empathy and we appreciate that this is a very sensitive matter and sincerely apologise for any distress to [the reader] as a result of her claim on behalf of her late husband. The Scheme issues cheques depending on how the estate is/was settled and the relevant information that we are provided with. This is to ensure that the payments are issued to the relevant and appropriate recipient. In most cases, someone handling an estate that is still open will be able to receive funds in the customer’s name and add it to the estate assets for distribution. In [the reader’s] specific case, we did not change the payee prior to issuing the cheque based on the information that we had been provided with during the claims process. The delay [the reader] has experienced in the processing of this new cheque is a result of the volume being managed by the Scheme and the need to request the cancellation of the cheque and then await confirmation of cancellation from the bank before we can then request a new one be sent.”

Q. We bought a washing machine from ISE Limited in April 2009. This company sell their machines through a network of local service engineers, marketing products based on the reliability and durability of the machines. Our previous machine, a Bosch, had lasted seven years and we bought the relatively expensive ISE machine hoping that it would last at least as long, if not longer. The price included an extended five year warranty to cover all repairs and parts.  Over the last five years the machine has been repaired a few times under the warranty by our usual local engineer at no cost. At the start of April, with just a few weeks to run on the warranty, the machine was making grinding noises and it was clear there was a serious problem. Our usual engineer is not working at present due to illness, but ISE arranged for another local firm to come and repair the machine. This firm did an initial repair under the warranty and informed us that there were further problems with the machine requiring more work. They referred back to ISE who wrote to inform us that they would not arrange the repairs under the warranty. They blamed this decision on their insurer and sent us a £70 cheque to settle. We obtained a quotation for the repair of £177, plus VAT and parts. We wrote to ISE, returning its cheque, stating that we had a binding legal contract with them, not with their insurer, which says that the warranty covers repairs and parts. ISE have written again, refusing to honour the warranty, blaming the insurer and again enclosing the cheque for £70. KC, West Yorkshire.

A. Kenneth Watt of ISE has provided a detailed response.  He says the warranty “was sold and clearly shown as being an insurance backed warranty, rather than a manufacturer warranty”. As such, approval for any claim is decided by the insurer, not ISE. The total cost of repair, including tax and parts would have been more than £320, making any repair uneconomic, given its age and condition.  Under the terms of your purchase agreement, he says, you were due a mere £7.50 repayment, given that it was just one month short of being out of warranty.  ISE “voluntarily” agreed to pay more, sending you a cheque for 15 per cent of the original purchase price.  Any further compensation should be sought from the retailer, who should have properly explained the warranty, says Mr Watt.  However, your understanding was that ISE sold the produce and you are convinced the warranty does apply.  We suggest you refer the matter to the Financial Ombudsman Service to review.