PRUDENTIAL, one of the UK’s largest insurers, has hit out at the “ambulance chasers” of the endowment mis-selling scandal by refusing to hand over customers’ compensation to intermediaries.

The insurer said that it would no longer pay compensation through the growing number of firms that charge savers hefty fees to chase their claims. About £1.7 million of the £40 million in compensation that Prudential paid out last year was handled by intermediaries charging an average of 25 per cent of the payout each time. A similar claims pattern across the industry suggests that third-party firms will reap about £12 million from the £1 billion that the industry expects to pay out to mis-sold savers.

Mark Wood, chief executive of Prudential in the UK and Europe, said: “It is not fair (to our customers) that, on average, 25 per cent of the money should go to a third party when, by complaining directly to us, they can achieve the same outcome, in the same amount of time, at no charge.”

The endowment mis-selling scandal has spawned dozens of firms which advertise their credentials as professional complaints handlers. The internet is rife with names such as complain2us.com or endowmentjustice.com.

Prudential will still deal with third-party companies. But when the time comes to pay out, the cheque will be sent directly to the customer. The endowment complaint company will then have to chase the customer for its cut of the compensation.

Theresa Fritz, of Which?, formerly the Consumers’ Association, says: “There is absolutely nothing that these complaint handlers do that you could not do yourself. There is no magic in it.”

John Boulter, a design engineer from Plymouth, successfully lodged a mis-selling complaint against Britannia and Alba Life. He gained compensation of £12,987 and is now on track to pay off his mortgage before he retires. “It helped that I had kept all the original documentation,” he says. “I had proof that Britannia had noted my cautious attitude to risk. You don’t need to pay someone to help you.”

Ms Fritz points out that the compensation paid by insurers is designed to put you back in the position that you should have been in. In effect, you will be paid the amount necessary to pay off the shortfall on your mortgage. So if you hand over 25 per cent of the compensation to an intermediary, you will still be left facing a mortgage shortfall.

If you want to bring a mis-selling claim, find more information on the websites of the Financial Services Authority (www.fsa.gov.uk) and the Financial Ombudsman Service (www.fos.org.uk).