Annuities Decision Reference 2022-0234

• Case Outcome: Partially upheld
• Reference: 2022-0234
• Date: 18 July 2022
• Year: 2022
• Subject Matter: Annuities
• Finantial Sector: Investment
• Conducts Complained Of: Failure to provide correct information

Decision Ref:

2022-0234

Sector:

Investment

Product / Service:

Annuities

Conduct(s) complained of:

Failure to provide correct information

Outcome:

Partially upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The complaint relates to an annuity pension.

The Complainant’s Case

The Complainant submits that following the death of her husband, his pension annuity was

transferred into her name. She further submits that the Provider, in a letter dated 18th May

2011, informed her that she was entitled to a pension effective from 1st May 2011 and that

this annuity was payable “monthly in advance throughout your lifetime”.

The Complainant contends that in May 2019, she went to the bank to collect her annuity

where she was advised that there was no payment made. She states that when she

contacted the Provider, she was advised that her annuity had expired. The Complainant

submits that she is very dependent on the annuity payments.

After submitting her complaint, the Complainant appointed solicitors to represent her. The

Complainant’s solicitors submit that an annuity contract was taken out in June 2009 by the

Complainant’s husband in consideration of €171,481.86. They submit that he passed away

in 2011. The solicitors refer to the letter dated 18th May 2011 from the Provider to the

Complainant informing her that the annuity pension would b e payable to her monthly in

advance “throughout your lifetime”. They submit that between May 2011 and June 2019,

the Provider made monthly payments to the Complainant pursuant to the annuity contract

and that relying on the Provider's letter of May 2011, the Complainant conducted her life

and financial affairs on the basis that she had a guaranteed income stream pursuant to the

annuity contract, of €11,139.86 per annum for life.

- 2 -

/Cont’d…

The solicitors submit that at the time when the Provider stopped paying the Complainant in

June 2019, approximately €111,398.86 had been paid by the Provider pursuant to the

annuity contract.

The Complainant’s solicitors submit that the Complainant is elderly, and her financial

position has deteriorated, and she has suffered upset, loss and damage as a result of the

Provider's actions. They submit that documentation has been supplied to her by the

Provider in a piecemeal manner and that she was not provided with general terms and

conditions of the contract or its schedule.

The Complainant’s solicitors submit that the Complainant relied on the May 2011 letter in

making decisions and plans about how to spend her income between May 2011 and June

2019 on the premise that she was entitled to the annuity payment for life. They submit that

the Complainant has not made provision for herself in the way she would have, if she had

understood that they annuity payment was for a period of 10 years only, rather than for life.

The Complainant’s solicitors refer to an internal email from the Provider which provides an

estimated cost of paying the Complainant an annuity of €11,139.86 for her lifetime as

€200,400. They submit that the Provider is in breach of contract and in breach of duty

(including fiduciary duty), and guilty of misrepresentation or a negligent misstatement.

The Complainant’s solicitor submit that the total amount paid by the Provider in respect of

the annuity contract between June 2009 and June 2019 was approximately €60,000 less

than the purchase money specified in the pension annuity application. They submit that it

now appears that the Provider did not furnish terms and conditions documentation in

respect of the annuity to the Complainant's deceased husband. They reject the implication

in the Provider’s submissions that the Complainant was somehow on notice of the limited

guarantee period due to the words “remainder of guarantee” used in certain

documentation. They submit that the representation in the letter of May 2011 was clear

and unequivocal and that the Complainant was dealing as a consumer throughout. The

Complainant’s solicitor submits that, as part of a data access request, the Provider purported

to deliver a terms and conditions document which referred to a schedule, but no schedule

was provided. The Complainant’s solicitor was subsequently informed that no policy

conditions were issued under the contract and that the terms and conditions booklet that

had been issued was in error and was a 2019 version.

The Complainant’s solicitors submit that an estoppel by representation of fact, arises in the

present case as a representation was made by the Provider which induced the Complainant,

on foot of the representation, to alter her position to her detriment. They submit that the

detriment was that, as a result of her reliance on the representation, she lost an opportunity

to protect her interests by taking an alternative course of action about how to make financial

provision for her old age. The Complainant’s solicitors submit that the Provider is estopped

from asserting a state of facts contrary to representations contained in its letter of 18th May

2011 and the Provider should be directed to pay compensation to the Complainant for loss,

damage and distress.