Consumers mis-sold endowment policies have been left waiting weeks or even months for compensation cheques to arrive as financial institutions battle to cope with a flood of complaints, it has been claimed.
Policy vendors are stalling payouts to successful claimants, preventing them getting money they are rightfully entitled to, according to endowment claims company Brunel Franklin.
Millions of people bought endowment policies in the 1980s and 1990s in a bid to tap into stock market gains.
But poor investment returns meant that many were left with shortfalls on their mortgages, leading to a flurry of compensation claims amid allegations of widespread mis-selling.
Abdul Iqbal, a small business owner from Cardiff, claimed he was mis-sold a policy by Barclays in the early 1990s.
He lodged a complaint in October 2004 but it took two years and an appeal to the Financial Ombudsman Service (FOS) before Barclays' agreed to pay Mr Iqbal more than £3,000 in compensation.
But despite agreeing to the payout on October 6, Mr Iqbal has yet to see any money.
He said: "There is no rational explanation for the delay whatsoever - they have all the paperwork. They are saying it is a backlog, but backlogs are created through inefficiency.
"I have waited two years and they are not doing anything about it."
Ian Allison, claims director for Brunel Franklin, said: "It is wholly unreasonable to wait two months or more for your compensation payout when the figures have already been agreed and the offer accepted by the client. At this point there is no reason why the claim can't be settled within a few days."
