Money Mail victory over RBS for targeting dying man who signed away £500,000 on pension that would never pay out

Money Mail victory over RBS for targeting dying man who signed away £500,000 on pension that would never pay out

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Money Mail has won £500,000 for the family of a dying man who lost his life savings after a visit by a salesman from Royal Bank of Scotland.

The state-backed bank, along with insurance giant Aviva, has reimbursed the relatives of Norman Hensher following our investigation into the way he was sold a pension.

Mr Hensher, 80, was convinced to convert his life savings into an annuity which would have provided an income for life — despite suffering from terminal throat cancer.

He died before he ever received a
payment, leaving the insurer to pocket all the cash. The RBS and the
salesman who advised Mr Hensher to take out an annuity received £15,000
commission.

Initially, RBS International — which
owns Isle of Man Bank which the salesman worked for — and Aviva — which
offered the annuity — denied any wrongdoing. But our investigation
prompted the watchdog, Isle of Man Financial Supervision Commission, to
reopen the case.

It has now ruled the advice and the sale of the annuity were unsuitable.

Crucially, it found there was no evidence the salesman made any attempt to find out about Mr Hensher’s life expectancy.

The £500,000 Mr Hensher invested  in the annuity has been paid to his estate.

So serious is the case, the regulator has forced the bank to review all sales made to customers aged over 70 since 2008.

Mr Hensher’s closest surviving
relative, his sister Brenda Brooks, says: ‘It still makes me shudder to
think the money was taken from my brother when he was frail and
terminally ill with cancer.

‘Until now Aviva and RBS have just
ignored our protests. It’s fantastic that this money is being paid back,
but it was only after the intervention of Money Mail these companies
did the right thing.’

The victory comes just a week after
RBS was embroiled in a row over the £1 million bonus it was planning to
pay to chief executive Stephen Hester. He rejected the bonus only
following pressure from the Mail.

In December, Money Mail revealed how
Mr Hensher’s family had been battling with RBS and Aviva over the
hundreds of thousands of pounds they feel they have had snatched
from them.

The case was uncovered as part of a
wider investigation into how some greedy banks and insurers were
boosting their profits by preying on the sick and vulnerable.

A bachelor, Mr Hensher lived in a
hotel on the Isle of Man. He was diagnosed with throat cancer in August
2007, and in January 2008 was told the disease had spread.

The 5ft 10in former businessman had
problems eating and his weight had dropped to less than 9st. As the
cancer progressed, he first took painkiller tramadol and then morphine
pills five to six times a day.

Following a phone call from Mr
Hensher, an adviser from Isle of Man Bank, part of RBS International,
paid him a visit in January 2008.

No one knows exactly what happened in
the meeting as no one else was present. But sales documents indicated Mr
Hensher wanted a low-risk investment which would boost his income.

RBS claimed during this meeting Mr
Hensher ‘seemed optimistic’ about his health. Its lawyers even said that
at the meeting in 2008, Mr Hensher believed he was on the mend and had a
reasonable life expectancy.

But documents from the regulator show
that while the adviser had been told of Mr Hensher’s cancer, there was
no record the adviser had asked him how serious this was and how this
would relate to his investment.

Mr Hensher invested £500,000 — which
came mainly from the sale of his family’s furniture-making business —
into an immediate life annuity. It made the adviser and RBS £15,000 in
commission.

Like ordinary annuities, one of the
main drawbacks is once an annuity is taken out, all the money goes to
the insurer. Mr Hensher would have had to live for a decade just to make
his money back.

As it was, he never saw a penny of it. He died in his hotel room on March 3 — a day before his first pension payment was due.

His sister Brenda, herself a widow,
from Worthing, Sussex, has always claimed her brother was not of sound
mind when the salesman called.

A solicitor who visited just days after refused to allow him to make a will and declared him in an unfit mental state.

Despite a legal challenge by Mrs Brooks, 80, RBS International was adamant it had behaved fairly.

But following our investigation the
Isle of Man Financial Supervision Commission began its own probe. It
discovered no evidence showing the RBS adviser had asked about Mr
Hensher’s life expectancy, despite knowing about his cancer.

It also found there was no evidence
showing why the adviser believed the annuity to be suitable. And it
found the annuity sale had breached the bank’s own rules. It came to the
conclusion the annuity recommended and the advice given were
unsuitable.

Despite paying the money  back RBS still insists it did nothing wrong.

A spokesman says: ‘We believe this was a unique set of circumstances.

‘At all times the bank acted in
accordance with Mr Hensher’s wishes and at no time has the regulator
suggested we mis-sold the product to Mr Hensher.

‘The financial adviser left the bank last year, unconnected to this matter.

‘The commission was paid to the bank and, as the sale has been unwound, will be returned.’

An Aviva spokesperson says: ‘Further
to on-going consultation with the Isle of Man Bank, we have been
informed that a thorough review of Mr Hensher’s files  has now taken
place by the  bank, in conjunction with the Isle of Man Financial
Supervision Commission.

‘The decision has been made by the
Isle of Man Bank to reverse the sale of the immediate life annuity to
the late Mr Hensher. As such, all funds held will now be passed to Mr
Hensher’s estate.’

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Category: Business