‘Scottish Widows sent my dad’s life insurance policy to my estranged nephew’
Ruby Hinchliffe
5 min read
The Scottish Widow, Amber Martinez, from the brand's advertising campaigns
The daughter of a royal marine commando says she has “given up fighting” after Scottish Widows sent her late father’s £10,000 life insurance payout to her estranged nephew.
The 72-year-old was caring for her father, who served in Korea and Aden, around the clock until he passed away five years ago.
“He was a lifer,” said the woman, who followed her father into the Armed Forces when she joined the Royal Air Force.
“He was the sweetest man. When he retired after 22 years, he and my mum bought a pet shop.”
He lived to the age of 89, but sadly passed in April 2019. In the lead up to his death, his daughter was looking after him in Cyprus. She had arranged for her father to live overseas with her because she feared he was not receiving adequate care in the UK.
In January 2019, while her father was receiving care in Cyprus, he sent a letter to Scottish Widows – seen by The Telegraph – asking the company to transfer his £10,000 life assurance policy into his daughter’s name “for safety reasons”.
Scottish Widows proceeded to send the father and daughter, who have not been identified for legal reasons, a form titled “Deed of Assignment by Way of Gift” to fill out.
This was signed and returned. Scottish Widows went on to confirm receipt, and the daughter said the company called her father while he was in hospital to confirm the transfer – with his nurse standing in as a witness.
However, after he died his daughter said it seemed that Scottish Widows had never filed the forms they sent. She also said she discovered that her dad had two other accounts with Scottish Widows that she was not aware of: a £14,000 Isa and a lump sum of £23,000 in an open-ended investment company account.
If she and her father had been aware of them, the daughter said, then they would have requested for these to have been put into her name as well. When they sent off the forms, she said they were under the impression that the life assurance policy was all there was.
After the father’s death, the contents of all three accounts were sent to the daughter’s estranged nephew, who was still left as the lasting power of attorney. It was in this discrepancy, between deed of assignment and power of attorney, that the problem seemed to lie – pointing to a flaw in how the system currently works.
Duty of Care obligation
Alan Lakey, a financial adviser and founder of insurance comparison site CIExpert, said: “If an insurance provider does not assign a form, then there is scope for complaint. But an issue can arise if the power of attorney is not involved in the deed of assignment.
“If they aren’t, that could mean the deed of assignment is null and void, because every financial transaction before death has to involve the power of attorney, as that person has been appointed. On a technicality, it might be that they get it – rather than the family member it was assigned to.
“But every organisation is bound by a duty of care. If an assignment is null and void, companies should be aware of this, and if they don’t point it out then they have failed in their duty of customer care. So a financial loss could be apportioned to them, even though the power of attorney is entitled to the money.”
Duty of Care is a legal obligation imposed on organisations in a court of law, to prevent acts which could foreseeably harm others.
The daughter in this case submitted a complaint to Scottish Widows, before escalating it to the Financial Ombudsman Service. But in 2021, the Financial Ombudsman Service told her it could not consider her complaint because it did not sit within its jurisdiction.
The daughter said: “I’ve given up [fighting the case] so many times. It’s dragged on and on. I’ve been with Lloyds Bank [the owner of Scottish Widows] forever. To be treated like this is absolutely shameful. It was so difficult. I was with my father 24/7 towards the end.”
‘This is not an isolated matter’
Earlier this year, she found the Facebook group “Scottish Widows Complaint Platform”. It was here that she met campaigner Mark Radin, and decided to reignite efforts to take the pension provider to task.
Mr Radin told the Telegraph: “I wish this was an isolated matter, but it’s not. Unfortunately, addressing these issues has not historically been a priority. Many MPs are now being appraised of this.”
Scottish Widows complaints to the Ombudsman surged 63pc last year, making it the most complained about pension provider on the Ombudsman’s database. The company has said it’s since made progress, working through a backlog of complaints.
The Telegraph has spoken to customers who have been locked out of £115,000 pensions, forced to borrow money for partner’s funerals after delayed payouts, and denied insurance money for years over critical illness claims.
Stephen Timms MP, former chair of the Work and Pensions Committee, met Donald MacKechnie, Scottish Widows chief operating officer, at the start of Parliament’s summer recess last year. He was told the provider had invested in more workplace training, increased the number of employees answering calls and reallocated experienced staff to more complex cases.
A Scottish Widows spokesman said: “We appreciate this is a very difficult time. However, the customer did not have appropriate authority on her late father’s policies with us, so due to the legal procedures involved in this family dispute, and customer confidentiality, we are unable to comment any further.”
