Press Release 12 Jan 05 - EMAG calls on the FOS not to yield to bullying

EMAG has called on the FOS not to yield to Equitable’s campaign to stop them investigating legitimate complaints arising from the damning evidence revealed in the Penrose Report. To block off this route to resolution 10 months after undertakings and encouragement by the Treasury minister would be perverse.

“The credibility and independence of the FOS is on the line.” said Paul Braithwaite, general secretary of EMAG. “Does it have the backbone to defy bullying by Equitable and the integrity to stand up to the possible displeasure of its parent body, the FSA? Equitable is the biggest financial scandal in a decade and it would be shameful for the FOS to give way and shirk its public duty to thousands of policyholders to adjudicate.”

EMAG says that the arguments advanced by Equitable in a letter to the FOS are ’sophistry concocted by expensive lawyers’ and it has offered to help the FOS in every way possible, including coordinating a coherent group claim.

Today, EMAG published a forensic analysis of Equitable Life’s actual performance after 1999, by Chartered Accountants Burgess Hodgson, as a reasoned rebuttal to what it describes as “Equitable’s own dodgy dossier”. The new report seeks to debunk the contents of Equitable’s unsigned but carefully crafted ‘Fact Sheet’ - which EMAG dubs as ‘bizarrely named, with very little fact and lots of half truths’.

EMAG says that the reason it is important to challenge the ‘Fact Sheet’ is because it is being used to block all policyholders’ new complaints based on evidence about over-bonusing in Penrose’s report and it has been circulated to complainants by the FOS.

“Lord Penrose, Scottish Judge and Chartered Accountant, took more than 2 years and £2 million to produce his balanced, authoritative and independent report of what went wrong at Equitable, yet the Society tries to sully and dismiss it in just 4 pages” said the report’s author Colin Slater of Burgess Hodgson. “This highly prejudiced document tries to discredit Lord Penrose's conclusions by using a series of specious arguments. In our report we have tried to set the record straight.”

EMAG says that the ‘Fact Sheet’ also underpins the Society’s recent submission, nine months after publication of the Penrose report, that the FOS should NOT, after all, look into any Penrose-related complaints. This, despite Treasury minister Ruth Kelly’s repeated undertakings and advice in the Commons last year that the FOS is the appropriate alternative to expensive Court proceedings for aggrieved policyholders.

The new Burgess Hodgson report and EMAG’s formal response to Walter Merricks at the FOS are both available on EMAG’s website at: www.emag.org.uk

Note for editors:

Tom Lake, author of EMAG’s recent petition to Europe (ref: 29/2005) and EMAG’s longest-serving committee member, is the newly elected chairman of EMAG, effective 1 January 2005