The Great Insurance Hoax

I am pleased to include this Guest Blog Post by Chris Hargreaves who can be found on Twitter @scotprovsaysno. It is a long post but it’s all relevant and there is some really important advice here. If you take out any insurance you should read! Please also share with friends and colleagues we need to get the message out to stop these big organisations taking our money!

We are told time and again to be proactive and to insure against all sorts of disasters from insuring our home, cars, pets, to ourselves. The UK insurance industry along with banks tries to get us to buy a wide range of protection insurance from PPI to life, critical illness and income protection. As we know, especially the banks who sold PPI at record rates sticking in on loans and products even without the customer knowing which led to the PPI scandal which is costing the industry billions of pounds a year.

So has the industry learnt a valuable lesson? NO it has not. The industry says their biggest problem in getting people to take out protection insurance is cost but when you talk to the public their number one concern is trust. What’s the point of paying for these policies? These policies never pay out anyway? To be fair the pay outs on protection policies has risen from the 80% mark to around 90% with Friendly Insurers paying out around the 98% mark with £6million a day paid out in claims. Here’s the sceptic in me… If you have 100,000 claims that means 10,000 people can be faced with a refused claim and if the industry never tells you how much in premiums it’s taking on a daily basis how can you come to a fair conclusion? So what happens when you take out a policy in good faith and your claim is refused? This:

In 2009 I was hospitalised with severe internal bleeding and a HB of 5 where I spent the next three months in three hospitals being treated like a lab rat. To cut a very long story short I was operated on without sedation, got a large PE on my lung due to being bedbound for so long, told incorrectly I had bowel cancer and epilepsy (treated for both) and put on enough powerful medication that you could have brought down an elephant. I suffered horrific withdrawals on discharge and because I was sent home without a life saving injection was admitted again in an emergency situation only 48hrs later. My next four months was spent at hospital 3 days a week as they fought to control the internal bleeding which was being made worse by the treatment for the clot which resulted in my blood being made thinner which in turn made me bleed more. Finally after blacking out in January 2010 I was seen by another specialist who stopped the clot treatment and finally I could have an operation to help stop the bleeding. The bleeding slowed but I was still quite ill and with the added stress of being unable work along with my wife losing her job due to the recession we had to live on £62.50 JSW along with food and essentials being bought by our families. I like to think I was prudent in taking out protection insurance and we started our claim against insurance giant Scottish Provident in September 2009 as I was too ill to start it whilst in hospital and as you can imagine we had other things on our minds. I had been sold what is called a “task based” protection policy which meant I had to be unable to do a set number of tasks to get a pay out. These tasks range from 6-8 and you have to be unable to do between 2-3 to get a pay out but consist mainly of; can you hold a pen in either hand, can you communicate in a way to be understood, walk 200 metres without stopping or being in serious pain, can you hear in a quiet room and read 16 point print all with the help of others or aids? Some might be thinking these sound very similar to the tests currently being used to see if people should be receiving disability state benefits and you would be correct. These policy definitions were taken from the assessment of benefits years ago and are used by insurers for policyholders they deemed to be “high risk” to insure against the inability to do their own job. If you do any form of manual work, e.g. driving even if it’s just a small percentage of your job the chances are you have a “task based” policy or to give its correct name Activities of Daily Living (ADL) or Activities of Daily Working (ADW).So in December 2009 Scottish Provident refused my claim because they said I had not experienced any restrictions through my illness or medication even though I was in hospital for three months. We asked to see the reports which left us dumbfounded. The forms were in 3 parts. The first part was about the policyholder, second was looking for non disclosure and if I had caused my illness with the last part asking about my restrictions to six set tasks. Now this is where it got interesting as the form asks for the policyholders current restrictions to the set tasks even though some consultants had not seen me for four months. These consultants said “we presume he has returned to work or not seen from discharge so don’t know current health condition but after this length of time we would say he should have recovered”.

My GP on the other hand knew different and said I was still restricted, having frequent emergency admissions to hospital and did not expect a full recovery until March 2010 as I was also being treated for a blood clot. This was also supported by a private consultant but Scottish Provident said they could ignore this evidence because the consultants in the hospital were more qualified to comment. Back and forth my case went in the internal quagmire of Scottish Provident’s claim handling teams so we went to the Financial Ombudsman Service. A lovely lady helped us through and I told her the evidence was wrong so she suggested we got the correct evidence and then send it to her. We thought this would be easy but the NHS put up brick wall after brick wall as they knew they had totally mishandled my care. It took us to make an official complaint against both Trusts and a face to face meeting before we got the evidence we needed as their approach was that it was not in their interests to comment. Armed with new evidence we went back to the FOS only to be told they could not use this evidence as it was not available to Scottish Provident when they refused my claim even though the new evidence supported my claim in full. They returned my claim to the insurer and asked them to assess my claim again based on the new supporting evidence but Scottish Provident just kept refusing my claim.

On the verge of giving up, we went public and wrote to every newspaper and organisation we could think of in the UK without reply so kept writing to them (over 1000 emails over 2.5 years) until The Times Newspaper chief consumer troubleshooter got in touch. The Times ran our story and also featured another couple let down by Scottish Provident with the same policy. This followed by us setting up a Twitter account aptly named @scotprovsaysno which attracted some interest from within the industry. It quickly turned out one leading light within the industry had been raising the issue surrounding these policies for some years without success so how were two outsiders going to make a difference? We just kept on tweeting and soon we had several thousand followers peaking at 13,000 which led to The FTAdviser, Cover Magazine, The Mail on Sunday, The Protection Review, Which?, The Telegraph, AOL Money, Money Marketing and other publications getting behind our campaign. With this added confidence we were in the right we went back to The FOS and won what the media describe as a high profile case against Activities of Daily Living protection policies. But, there is always a “but”. Scottish Provident appealed the decision twice meaning our case went all the way to the Ombudsman who supported our claim and slammed Scottish Provident for the way they handled my case. We could have walked away at this point but as we had nearly lost everything due to my illness including my business we set about stopping anyone else having to go through what we did. We achieved our first major change when insurance giant Aviva agreed to rewrite 95% of all their new critical illness and income protection away from ADL’S and ADW’s to “Own Occupation” definitions. This was a major turning point as more and more insurers did the same except, you guessed it, Scottish Provident who stuck to the argument it’s better to offer a choice even if it’s a poor choice than no choice at all. In September 2012 BBC consumer program Rip off Britain ran our Angry Policyholder campaign see here  and finally after 3 years Scottish Provident admitted defeat and confirmed it would address these policies in 2013.

In December 2012 earlier than expected Scottish Provident rewrote new policies and offered more occupations for the superior “Own Occupation” definition which means if you cannot do you job the policy pays out. Our story and campaign does not end there as not one insurer who sells ADL/ADW policies has addressed the 800,000 policies that were already in place in the UK before the new changes were made. Now, it’s not as easy as this but if you take 800,000 premiums ranging from £13.00 to £70.00 per month that’s a lot of money insurers are receiving when we all know they are hardly ever going to have to pay out on a claim. Some figures suggest that at least 55% are refused with as little as 10% of claims being paid in full so we need help to keep up the pressure. In Brazil, following consumer pressure the government banned these policies several years ago because hardly any were paying out. So if you have a protection insurance product we cannot stress enough to check if it is “own occupation” and if it is not, you seriously need to consider changing before it is too late.

Friendly Insurers do not sell task based policies and so there are options if your insurers won’t cover your occupation. If the industry wants to raise sales of protection insurance products they need to build trust with consumers. They can start by stopping hiding important clauses in small print, making clear that if a policy is to pay out after 4 weeks to make you aware that it could take 12 weeks to assess your claim and finally be more open and honest about pay out figures and stop hiding behind a top line figure which in itself can hide a lot of bad news. For example 2% of claims are refused on average due to non disclosure, but that sounds like the policyholder has hidden some previous medical condition. In fact, cases we have seen involve an ovarian cancer claim refused due to non disclosure of a previous ear infection and this can be even worse if your policy has been sold on to a closed book insurer where a third party decides your claim not your insurer and these companies DON’T publish their claim statistic.

Chris and Nicola

FB: Facebook Angry Policyholder

Some of the media articles covering our campaign

This Is Money


FT Advisor

The Chauffeur

ME Association

Money AOL

Holidays and transport

How to Win When EasyJet’s Customer Service Fails

If you are looking for how to complain about delays, cancellations and your rights see All you need to know about booking/complaining about holidays/flights

The Complaining Cow jumped half heartedly over the moon eventually…

So airlines difficult to get money back from? Yes, on the whole, mainly I think because it’s the same old complaints and they know just how to put people off, the same old excuses churned out and they can afford to lose customers. But I’m here to show you that if you keep to my tips (many of them in this case!) and persevere you can do it! (Added to the fact of course that now, with Social Media and Review sites etc., it is much easier to spread the word about bad customer service).

A friend of mine used EasyJet for a holiday with her family. Whilst there, her mother in Law became seriously ill and they had to fly home. EasyJet wanted to charge £1000 for the flight home. In fact they got it for £700 from an Internet cafe. That was for 4 of them one way on top of what they had paid! They, like I thought that was exploiting the fact that they needed to get home before her Mother in Law died. Bear in mind of course that EasyJet would have sold their existing tickets on for more profit. Had her Mother in Law died whilst they were on holiday they would have had their money refunded. Even I am stuck to put a light hearted spin on that state of affairs!

When they got back Jo complained. As you would expect they got some standard rubbish back about prices and their Price Policy. They did say they would pay back the tax. Generous huh? No. Because they then backtracked on that saying it was a transfer. I disagreed. I also disagreed with them that my friend and her family should have to trawl the Internet with no help from the EasyJet Customer Representative. I disagreed that EasyJet should make a profit on the situation. I disagreed that they should not be compensated for the inconvenience and misinformation they were given. So, being quite a disagreeable soul I took to work.

I would have liked to have made this complaint so many people could see but unfortunately the rather brilliant Dave Carroll got there first in shaming an airline by performing the song that went viral

United Breaks Guitars

Anyway, I can’t sing. So out came the hooves and I reverted to type. Did you see what I did there? Clever pun huh? No? Okay back to complaining.

Now, Jo won’t mind me telling you that her written English is rubbish, her emails informal (kisses I tell you KISSES – is there a sighing emoticon one can use? Insert it here!) and well let’s just say when I sent her my version of a complaint to send to the CEO she said it scared the poo out of her! She may have put it less eloquently…

Anyway, where was I? Ah yes, pointing out the error of EasyJet’s ways. I wrote an email for her to the CEO (you can get contact details for any CEO at and pointed out the following:

1)    I am fully aware that one takes a risk in flying with a budget airline and can expect to pay more if changes need to be made. However, charging such an extortionate amount more for a different flight I believe is profiteering.

2)    The customer services representative stated that “Sometimes if a flight is not selling as well as expected we would reduce the fare to encourage people to book.” They booked at about 6.00pm for a 10.15am flight the next day. This contradicts what the representative says. There was little time left for people to book and to have 4 tickets available (and there were more) then clearly there was scope for these flights to be cheaper!

3)    The original tickets were approximately £550 including the extras. The actual flights were about £90. They then had to pay an additional £675 (£1000 if booked directly at the desk). Easyjet would presumably have sold the original flight on for at least £675. That makes an additional approximate £1300 profit for Easyjet on top of the original acceptable profit. Nearly 250%! Stunning profiteering I believe!

4)    Easyjet needs to treat all customers equally, so, does that mean it takes advantage of every customer who finds themselves in a difficult situation?

5)    Why should it be cheaper at an Internet cafe trawling through flights than just transferring the flight dates directly with EasyJet!

6)    The representative had offered to refund the tax and this offer was withdrawn as he said that they had transferred the tickets! More contradiction! This is incorrect, they bought new tickets and so they are entitled to at least the tax back. EasyJet even charged again for speedy boarding and baggage – how is THAT is a transfer?!

7)    The correspondence to date was forwarded and the point made that the last email hadn’t even gained a response. (The one of pointing out their contradiction..)

8)    EasyJet’s guidelines on “Refunds and Cancellation fees” state that “In exceptional circumstances, however, EasyJet will consider issuing a credit in the event of the bereavement of an immediate family member provided that the claim and a copy of the death certificate are submitted by post to the EasyJet Customer Services Department.” Not only were they not advised of this by the EasyJet representative, they were not advised of it by any Customer Representative on holiday or in correspondence. With a charge of £30 per customer, totalling £120 I should be refunded the £675 minus £120. A total of £555.

She got her £550 in EasyJet vouchers….

Have you had dealings with EasyJet and other airlines? What’s your experience of their customer service?

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