The endowment mortgage compensation firm was found to be using money gained for its clients for its working operations and not refunding the fees of clients if their claim was unsuccessful, despite offering a ‘no win, no fee’ service.
The court believed there was ‘a serious risk to creditors and to the public should the company be allowed to continue to trade’ and compulsory liquidation was ordered on 1 February.
Mark Gregory, managing director with profits at Legal & General, commented:
“This is an isolated case but these things do happen. I don’t think this case points to any issues within the wider endowment sector.”
While the Austin Hamilton Associates case may not be indicative of the state of the compensation sector, brokers were not saddened by the news.
Tony Catt, a sole trader, said: “If the customer has a genuine complaint against the endowment policy, they should be dealing with the adviser direct, rather than going through an intermediary which often employs questionable practices.”
