Denouncing the limited compensation process set up by the government, the Equitable Members' Action Group (EMAG) has withdrawn its support for a Treasury-commissioned review into compensation payments.
EMAG was formed to represent 25,000 Equitable policyholders after over a million people lost about £4bn when Europe's oldest mutual closed to new business in 2000. Sir John Chadwick was appointed to explore payments for policyholders "disproportionately" hit by Equitable's financial troubles.
EMAG general secretary Paul Braithwaite said that Sir John's recently published third interim report was nothing but "a series of dubious assumptions piled one on another..." EMAG called the report a Treasury "sham" controlled by civil servants. The group has said it would campaign for a full compensation fund to be established as recommended by the Parliamentary Ombudsman Ann Abraham.
Abraham accused regulators of a "decade of regulatory failure" over Equitable in 2008, finding them guilty on ten counts of maladministration. Sir John will publish his final recommendations in May, detailing the structure of the partial compensation scheme.
