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[MSE Jenny]

Please use this thread to discuss the new mis-sold endowments article.


This is a continution of the old endowments discussion both here and here.

[dunstonh]

While not always a fan of the Consumer Association, its Endowmentaction website is quite simply fantastic and an untouchable non-profit resource when it comes to endowments. It will tell you about who to complain to, how to do it and includes letters you can print off to do an instant complaint. So quite simply trip there!

I would love it if you could just alter the wording to "While not always a fan of the Consumers Association, as they recommended endomwents themselves but have decided to forget that....."

[kfn1502]

This is a bit of a long shot, and I'm hoping somebody will be able to help out with this dilemma. Or refer me to a free site/agency who could give advice, if possible

I have a friend who, with her then-husband, took out a second endowment mortgage (they paid off their first to buy a bigger home when babies started coming) in 1990. Her understanding of ANY financial matters is limited and her recollection of the original selling details is vague. However, what she does remember is understanding that at the time the mortgage would be due to be paid off, the endowment policy would have enough money to cover the mortgage AND provide about the same amount for them to have as a cash bonus.

During her marriage, her now ex-husband looked after all the financial affairs - paperwork etc - until they separated in mid-2003 when she suddenly had to look after everything for herself (as well as four children, the youngest aged almost 3). She received a letter in about August 2003 saying there was a projected shortfall in the endowment policy - but as she didn't really understand it, and was overwhelmed with everything else she was coping with at the time, she just left it.

At some point during their marriage, her ex-husband had a 'clear out' and threw away all paperwork which he deemed unnecessary. We suspect this included anything to do with the endowment as we can't find the policy document (or indeed a whole stack of other important documents which would be useful to have!).

She & her husband have finally divorced (not especially nicely) in June 2005 and he is not being at all helpful in anything. The court order states (among other things) that he's supposed to assign the endowment policy to her, but he's seeking leave to appeal the decision and therefore won't sign it.

My understanding is that she would need to complain about mis-selling of the endowment policy by the middle of this year (ie three years since becoming aware of a problem). My question is, does she need to have her ex-husband participate in the complaint since he is still a joint policy holder?

Would she be able to submit the complaint forms without his signature, but with an explanation of the facts?

Thanks so much for any help you can provide about this.

[dunstonh]

My question is, does she need to have her ex-husband participate in the complaint since he is still a joint policy holder?

No.

Would she be able to submit the complaint forms without his signature, but with an explanation of the facts?

Yes. Although if she doesn't know the facts, its going to be hard to explain them.

They would respond to the registered address though so that could be a potential issue.

[webwiz]

A contrary view.
I find it hard to believe that anyone savvy enough to be interested in this site would really buy a low cost endowment believing that it guaranteed to pay off a mortgage. It was absolutely clear that the final payout amount was not specified at the start, so the blindingly obvious question that anybody with any senses would ask is "well what is the minimum?".

It might seem that it is a good thing for the "little man" if big insurance companies pay them compensation even if it is not really deserved, but this is not correct. The compensation will, in the final analysis, be paid by other little men through lower endowment proceeds, higher premiums, losses in pension funds holding the shares of the insurance companies.

Insurance companies are being forced to pay compensation if they cannot prove that they warned customers that the target amount was not guaranteed and few have good enough record keeping to be able to do that after many years.

I also find it iniquitous that cash compensation is being paid. Even if someone was really mis-sold an endowment to support a mortgage then their mortgage should be converted to a repayment type at the Insurance company's expense. Who really thinks that the recipients of the millions of compensation are using it to reduce their mortgages?

[kfn1502]

Thanks dunstonh - we'll give it a go without ex-hubby's signature and see what happens. I know it will be a tough call to be able to explain her ignorance at the time of the sale because she is a bit of an ostrich when it comes to financial matters. All correspondence comes to her address so that's no problem.

[Violinist]

I've complained to my Financial Adviser using the Consumers' Association forms as a starting point. I think I have a good case in that it was never explained to me that I might not be able to pay off the whole mortgage.

However because it was a long time ago (early 90s) the Financial Adviser claims that they can't find any paperwork. They go through each of my points in turn saying, in effect "the adviser would have explained this to you" without any evidence to support it. Without exception they have ruled in their own favour, with no justification, on every point.

Can they do this? What should I do next?

[arlington]

Hello!

We believed that we were missold 2 endowment policies. We complained on both but were told one was time-barred. This was before all the new gov. regulations about time barring. We received compensation on the other claim but the ombudsman upheld Friends Provident's assertion that we were too late on the larger claim. This was all despite the fact that each time we received a letter saying our endowment might not be performing to our expectations, we phoned and were told that actually our fund was performing well. It was only after the time bar period that we discovered it was not!
We worked out that our claim would have been worth about £15,000. If Friends Prov hadn't given us misleading information we would have complained earlier. Funnily enough, the ombudsman said they couldn't take this into account because we were just too late!

[philb120]

Originally Posted by webwiz

A contrary view.
I find it hard to believe that anyone savvy enough to be interested in this site would really buy a low cost endowment believing that it guaranteed to pay off a mortgage.

I only found this website aprox a year and a half ago and it has certainly taught me to be more financially savy- something I wasn't when I took out my endowment.

[silvercar]

When we took out our first endowment we were in our first jobs post graduation and broke. The guy selling us the endowment had two pieces of paper one blank and on one he doodled pictures of planes (representing holidays) and little sacks (representing money). He asked us which one we wanted. Then said the blank page represented repayment mortgages and the other endowments, as they were the only ones which could give you extra money at the end of the mortgage.

He then ripped both pieces of paper up and put them in the bin. Saying he wouldn't get us the mortgage if we didn't choose an endowment because he needed the commission to live on! At that time (1986) the property market was so bouyant, particularly in London, if we wasted time going to someone else we would have lost the flat.

Anyone all the evidence ended up in his bin- now we know why.

Having learned a lot in 20 years, including discovering this site, we realise that not only the surplus may not materialise but the endowment could be in shortfall.

But at that time we thought either you chose endowment or repayment; either way your mortgage would be paid off, the question was how much surplus you could get.

[MSE Martin]

webwiz

The vast majority of users of this site didn't start with an interest in money matters. In the trade this sites often referred to as a 'break-out' site as people who wouldn't read money pages and dont watch money type telly use it. That's something i'm very proud of. So hopefully the mistakes people may've made in the pasts have a small chance of being rectified here

[Sirshocking]

Hi

I have 3 endowments set up around 1990 which expire in 2011

1 with Norwich which was a life insurance policy that I upgraded to an endowment

1 with pearl, again was an upgrade from a life insurance requested by me but implemented by there local door 2 door salesmen

1 with Norwich again which I asked a small time broker to set up to pay for a bigger house purchase.


Do I have any chance in gaining compensation because they were requested by me?

Has anyone been successful in these companies in a similar situ.

Would be glad of a reply, claiming on one is a headache, but three, i have left to drag on a bit and should sort this soon before its too late. perhaps I don't have a chance from the way I bought the policies?


Steve

[exil]

Well, I'm not sure about this. I was offered a low cost endowment, but I knew at the time that the "low cost" bit meant the mortgage wasn't guaranteed to be paid. To be honest, I thought everyone knew that.

Instead I took out a repayment mortgage. This meant I paid out more than if I'd
taken the endowment - but my mortgage is now paid off.

Had interest rates and inflation remained high, then the low-cost endowment would have turned out to be the correct choice. Would anyone who had taken out a repayment mortgage then be entitled to sue for mis-selling? Or are you only entitled to compensation if you make no decisions on your own behalf?

[dunstonh]

1 with Norwich which was a life insurance policy that I upgraded to an endowment

No grounds for complaint as you did it yourself.

1 with pearl, again was an upgrade from a life insurance requested by me but implemented by there local door 2 door salesmen

If done on execution only basis. i.e. you told the insurance rep what to do and he recorded it as execution only, then no grounds for complaint. If he did it on advice basis, you could complain and Pearl's documentation is generally awful.

1 with Norwich again which I asked a small time broker to set up to pay for a bigger house purchase.

Same as Pearl really. Depends on whether it was recorded as execution only. A small time broker (which i have to assume you mean IFA) would be more likely to record it as execution only than Pearl.

Do I have any chance in gaining compensation because they were requested by me?

Not at all on the first one. Possibly on the second but less likely on the third but still potentially depending on the paperwork. Morally, you don't deserve a penny.

Had interest rates and inflation remained high, then the low-cost endowment would have turned out to be the correct choice. Would anyone who had taken out a repayment mortgage then be entitled to sue for mis-selling? Or are you only entitled to compensation if you make no decisions on your own behalf?

Most endowment complaints are not being upheld because they are classed as mis-sold. They are being upheld on the basis that the documentation is insufficient to support the recommendation fully. Of course much of that is based on todays rules being used retrospectively and perhaps thats the unfair bit.

I do get where you are coming from though.

[defender of the weak]

Most endowment complaints are not being upheld because they are classed as mis-sold. They are being upheld on the basis that the documentation is insufficient to support the recommendation fully. Of course much of that is based on todays rules being used retrospectively and perhaps thats the unfair bit.

I do get where you are coming from though.[/QUOTE]

Most are upheld because they were simply not suitable, not because of retrospective application of rules.

[Sirshocking]

yes I was afraid you say something like that, ah well back to the grindstone...

:'(


Many thanks

Steve

[Midice88]

Got it! Over £8000 but how do I know if they have offered me enough? Also claiming in retrospect the £50 it cost me to convert mortgage to a repayment even though I have no records. MSE you're brill!!!!

[Fuming Gal]

Hi,
I took out an endowment with the Halifax in April 1988. I've made a claim but the Halifax say they did not sell me the policy. They claim it was an independent finance company that is no longer in business (a company I have never heard of). I bought the policy in a Halifax branch, from a lady wearing Halifax uniform and badge. The Halifax say that at that time they had independent financial advisers working in their branches and were under no obligation to tell me this. The FSCS can't look at my case because it was sold before August 1988. I now appear to have no comeback. Any suggestions?

[dunstonh]

Got it! Over £8000 but how do I know if they have offered me enough?

The two calculations that can be used (3 if you include a voided policy) are defined by the FSA so unless they have put the figures in the software wrong, its unlikely to be incorrect. Many will show you how they came by that figure.

Also claiming in retrospect the £50 it cost me to convert mortgage to a repayment even though I have no records.

Some will cover the cost of conversion, and cost of advice when taken, but they will usually want a receipt.

I bought the policy in a Halifax branch, from a lady wearing Halifax uniform and badge. The Halifax say that at that time they had independent financial advisers working in their branches and were under no obligation to tell me this.

Correct for 1988. Remember no regulation back then.

The FSCS can't look at my case because it was sold before August 1988. I now appear to have no comeback. Any suggestions?

If it truely isn't a Halifax case, then it is end of the road.

[scotti]

Hi, we were sold an endowment in 1989, unfortunately the financial advisor has declared bankruptcy and our claim is currently with the FCSC.

All paperwork was submitted in Sept 2005, we contacted them again this month for a progress report and were told that it will take up to another 6 months!!!

When I see that some are having claims settled within a couple of months it makes me wonder if I could be doing more to speed things along.

Any comment/advice would be most welcome.

Many thanks

scotti