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Provider should not profit from monies it should never have received 2

United Kingdom
15/03/2006
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Reference P00520

The member had set up a free-standing AVC plan and had remained in it on the basis of advice given to him by a representative of the provider. It was later discovered that he had been ineligible for membership of the plan and the provider refunded his contributions, but without interest. The member claimed that that the provider should not have profited as a result of the incorrect advice that their representative had given him.



The Ombudsman found that when the provider had made enquiries to the member’s status intended to establish eligibility, the member’s responses had been “curt and unhelpful” and had he been more forthcoming at this stage the provider’s advice would have been different.



However, the Ombudsman did not accept the provider’s argument that they paid no interest on the refund because it had been the member’s responsibility to keep them informed. The Ombudsman could see no reason why the company should profit from contributions it should not have received, and directed that the provider pay interest on the refunded ineligible contributions, calculated on a daily basis from the receipt of each ineligible contribution to the date of payment of such interest.

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