Posted by Jeremy Burgum on 03 January 2001 at 09:23:59:
Equitable Life, the troubled mutual insurer, is to face yet another investigation into a claim the society has broken consumer protection rules.
The Office of Fair Trading (OFT) have said investigation into whether Equitable was unfair to impose penalties on customers who cash in their policies early will be given priority due to the high profile of the Equitable case.
The society put itself up for sale but last month the final potential bidder, Prudential, withdrew and Equitable was forced to close its doors to new business in December. And to deter customers from leaving the exit penalty was raised from 5% to 10% of the policyholders' fund.
Whilst Equitable says penalties are commonplace in the industry, unhappy shareholders believe they are now trapped into staying with Equitable.
To date, the OFT has requested detailed information from Equitable and has threatened further action if Equitable doesn't comply within a fortnight.