EMAG press release:
"…a black day that brings dishonour on the FOS."

A few hundred policyholders finally, after three years of delays, winning some compensation is NOT the real FOS story today.

Deplorably, the FOS has ducked its duty to investigate a MUCH bigger Equitable Life issue - complaints based on the rigorous Penrose report.

It is a black day that brings dishonour on the FOS, whose raison d'etre is to investigate complaints against companies such as Equitable. On hearing rumours, EMAG had wrote to Walter Merricks BEFORE the news was announced, saying:

"It appears cynical and underhand for the FOS to seek to subsume a landmark decision under the announcement of quantum on ELAS late-joiners and at such a blatantly politically chosen moment, as this Parliament is prospectively dissolved and in the undertow of Easter, perhaps in the hope of burying such shameful news."

One year ago, the Treasury accepted Penrose's report and directed policyholders with new complaints to the FOS to investigate. Lord Penrose prepared a 30-month study that concluded that Equitable had orchestrated an elaborate confidence trick since the 1980s. Both the Society and the FSA, during Maxwellisation, tried unsuccessfully to persuade Penrose otherwise. But the FSA has stood by the Society and last July it reiterated its dubious assertion that Penrose was wrong, and that there'd been no over-bonusing and there was no new basis for complaints. Well, they would say that, wouldn't they? Tellingly, the FSA has consistently refused to substantiate that opinion, citing confidentiality of consultants' and counsels' opinions. Now, the FOS is using the opinion as a plank and has conspired with the FSA to turn its back on investigating.

The FOS has buckled both to the bully-boy threats of Equitable who have tied the FOS in knots for years and to its FSA masters, who are terrified that Penrose-based claims could bring down the Equitable house of cards.

Paul Braithwaite of EMAG said:

The FOS's incestuous relationship with the FSA is totally unsatisfactory. The FSA is concerned primarily with industry confidence. That will always prevail over protecting policyholders, as Equitable Life has proved over and over. The responsibilities conflict and MUST be separated. Investors' trust in financial services has been destroyed by the FSA's trail of failure over Equitable Life. The FOS in its current guise is a worthless poodle of the FSA and it should be abolished."