Owners who insured their pets with Lloyds or Halifax and whose animals are receiving treatment are being urged to complain and demand compensation after the cover was withdrawn suddenly.
Consumer campaigners say Lloyds Banking Group, which owns both brands, is leaving some insurance customers high and dry. They are calling on the Financial Services Authority to step in and order the State-owned bank to treat its customers fairly.
Financial Mail revealed last October that the group was pulling out of the pet insurance market. But customers whose cats and dogs have medical problems are unable to get cover elsewhere because no insurer will cover a pre-existing condition.
Worry: Julie Knox with Tasha and Jack, front, has complained over loss of coverThese owners must choose whether to pay for their pet’s treatment, which could run into thousands of pounds – or make the grim decision to have the animal put down.
Lloyds and Halifax pet policies were popular because they allowed owners to claim for a specific ailment or condition, year after year, up to an annual cap that was then renewed after 12 months. This type of policy, known as lifetime cover, is more generous than other lower-cost plans that impose a 12-month limit on claims for a particular condition.
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The group claims that it is listening to customers’ complaints, but it would not confirm rumours that cash had been set aside to pay compensation to customers who were receiving payments from their policies at the time cover was withdrawn.
Marc Gander, of online body the Consumer Action Group, has been contacted by many former Halifax and Lloyds pet policyholders, who are distraught that they will no longer receive payments from their policies. Gander urges them to complain and demand cash compensation to cover future treatment.
‘Lloyds has relied on a termination clause in its documents that allows it to stop cover,’ he says. ‘But there is an implied promise from both sides when someone takes out a lifetime cover policy that cover will be provided for the life of the pet, as long as the policyholder continues to renew and meet the terms and conditions.
‘I would argue that the bank has breached this. It also goes against the FSA’s rule that firms have an obligation to treat customers fairly.’
Gander says policyholders who complain and are offered ‘goodwill’ payments should not accept them. ‘Victims should push for full compensation to cover all treatment in the future,’ he says.
Julie Knox, 55, a retired civil servant, has complained to Halifax about the loss of cover for her nine-year-old German shepherd-collie cross, Tasha.
Julie, from Harelaw, County Durham, had covered Tasha since she got her from a rescue centre in 2005. But the dog developed a serious joint problem in a back leg, which has required regular medication costing about £700 a year. It will be impossible for Julie to get cover for this elsewhere.
‘I took out cover with Halifax specifically for its lifetime guarantee,’ says Julie, whose husband Peter, 65, is a retired British Gas safety officer.
‘Tasha may need an operation on her leg, which could cost up to £5,000. We’re retired and on a low income so it is worrying to think we will have to take on these costs – or, perish the thought, have Tasha put down.’
Julie is now waiting for a response from Halifax. The FSA says other customers who feel they were misled should complain to the bank. If not satisfied, they can take their case to the Financial Ombudsman Service.