Pearl's holiday disappointment

One thing finance firms should be relied upon to get right, is figures. But, as the BBC's Money Box programme reveals, this is not always the case.

How would you feel if you were told how much money you had in an investment account, booked a dream holiday on the strength of it, and then were told you didn't actually have the cash.

That happened to one Money Box listener, Caroline, when Pearl Assurance said it had made a mistake years earlier and instead of having the cash to book her trip, she owed them more than £2,000.

The dream holiday was to take Caroline and her daughter Charlotte to Florida and Disney World.

They were all set to go next May, but it all hinged on the money mum was getting from the Pearl Assurance investments she has held since 1993.

Admitted overpayment

All the statements the company has ever sent looked good, so last September Caroline asked for an up to date quote.

Chris A'Court, Money Box reporter investigates Pearl's mistake.

The Pearl said she had several thousand pounds left in her fund so Caroline booked the holiday on a credit card thinking she would convert investment units to cash when the time came to pay the card bill.

At that point things started to go wrong.

"I phoned in late November and said to Pearl 'I'm ringing to release the money'.

"That was the point where the service clerk said 'you don't have a policy, it has been closed'."

Pearl admitted that they had overpaid Caroline three years ago and that they had now taken the money back - leaving her with a debt of £2500.

Query rebuffed

What Pearl had done was to make a crucial mistake three years ago when Caroline made a withdrawl of money.

When you're told by a huge company that everything is fine who am I to think that it isn't

Caroline

Instead of taking units away from her investment account it added more to it, increasing the value.

But no-one spotted the error, even when Caroline herself questioned if the investment was doing as well as it appeared.

Pearl always insisted the figures were right

"I rang and I was quoted over £3000 in the policy. I thought it was mine and I spent it because I thought it was mine - this isn't my mistake.

"When you're told by a huge company that everything is fine who am I to think that it isn't?"

Is she poor enough?

Only after the dream holiday was booked last autumn did the Pearl realise the mistake it had made in 1998.

We have apologised to Caroline for the extremely poor service she has received from Pearl and have reassured her that the overpayment on the policy will be waived, without question

Pearl Assurance

And it was then that it told Caroline to cancel the Florida trip because it would not provide the money.

It was Pearl's own mistake but staff were adamant that she now owed them money.

Pearl suggested it might waive her £2500 debt if Caroline could prove she was poor enough - but for that it demanded to see her bank statements, pay-slips and other personal documents.

So instead of having everything to look forward to Caroline suddenly found herself deeply in debt and dreading having to tell her daughter that the trip was off.

"It's what every child dreams of: she's told all her friends!"

Money Box asked for an interview from the Pearl. It refused but said it would review the situation.

Holiday is safe

Pearl acknowledged it was an 'unfortunate but rare mistake'.

"We have apologised to Caroline for the extremely poor service she has received from Pearl and have reassured her that the overpayment on the policy will be waived, without question," it said in a statement.

"We have also told her that we will cover the costs she has incurred as a result."

That means the holiday is safe. Pearl faxed a letter to Caroline at work saying it would be paying.

Caroline's reaction was understandably jubilant and it is great news but it does show how finance firms can blame you if they make a mistake.

Unfortunately there isn't any official time limit to protect consumers if errors like this are made.

After hearing about this case, the Association of British Insurers told Money Box that it would welcome a legal ruling on exactly where and when it is reasonable to ask customers to pay back money, given through mistakes like this.

Money Box is on Radio 4, on Saturdays at noon (GMT) repeated Sundays at 9 and on its web site all week.