L&G Complaint Upheld but Need Help Please

Ex-Spendaholic

OK I'll try to keep this as short as possible.

March 1993 - Bought our first home, we were aged 21. We were told we would be mad to take a repayment mortgage as it would only guarantee to pay off the mortgage whereas the interest only with endowment would pay off the mortgage and provide a surplus of approximately £75K. Agent kept talking about the holiday home we could buy. Figures showed that the repayment mortgage and interest only plus endownment monthly costs were almost identical. We took the interest only and endowment. The mortgage was for £32,775 and the endowment premium was £56.87 per month made up of £44.78 as the flexible mortgage plan and £12.09 additional protection. I think the mortgage payment was around £190.00. Those were the days. :rotfl:

August 2000 - Letter from L&G to say that they believed there would be a potential shortfall of £11,000. :eek:

We changed that day to repayment mortgage, borrowing the same amount that we did 7 years previously. We phoned L&G and they offered to increase premiums etc but we were much to scared to do this.

We sold the policy to a company on the internet for around £3000-£3500.

2008 - Enquired on here if it was worth complaining - general advice was no it was too late etc etc.

July 2008 - Decided to send a letter anyway.

September 2008 - Received a letter saying that they were dismissing complaint and that we had good salaries etc, no misselling took place and there were no documents to show we had been promised a surplus etc etc. I decided at that point that the subject was closed.

11 October 2008 - Received a letter from L&G. Its 6 pages long but here are the main points:

I have assessed your circumstances and I am not sufficiently satisfied that the recommendation for you to take the risk of repayment of an interest only mortgage using a Flexible Mortgage Play invested in the Managed Fund was suitable. In particular I am not convinced that your capability to accept the consequences of the risk of a shortfall for this plan was fully established.

It then goes on to say in the Summary:

I do not believe that the recommendation to take a risk with the repayment of your mortgage with an endowment invested in the Managed fund was suitable. This is based on my assessment of your circumstances at the time of sale. As such I have upheld your case on this point.

Then in the Summary of Offer:

I have concluded that a repayment mortgage would have been more appropriate for you. Therefore my offer will place you in the position that you would have been in had you taken out a repayment mortgage.

However as your policy was sold to Mr * ******** on 29 August 2000, we require documentary evidence of the amount that the policy was sold for before we can calculate whether any redress is due to you. Please send this information in the enclosed prepaid envelope.

So this is where the problem arises. I do not have documentary evidence. The policy was sold to a company on the internet. Even if someone was to say the name of it now I would not know it. One thing I do remember is that the policy wasn't a type that was wanted by all companies. I think it was something other than with-profits.

So how do I get this documentary evidence? Would L&G themselves have any record of a company which sold it to the current policy holder? The other thing I'm wondering would my bank be able to check back to see which company issued a cheque to us for £3K ish in August/September 2000? Is there anyway around this at all? I would hate to think I have come this far for it to be shelved due to my lack of record keeping.

Also I have seen mention on here before of a formula which can be used for calculating any compensation due. Where can I find this? (yes I know I'm jumping the gun and I may get nothing).

Any help and advice would be greatly appreciated.

dimbo61

Contact the bank and ask
they only have to keep records fo 6 years but it wont hurt to ask.

dunstonh

So how do I get this documentary evidence?

Look at your bank statement or ask your bank.

Would L&G themselves have any record of a company which sold it to the current policy holder?

They would have the assignment and address of the new owner but they cannot give that to you. You no longer have rights to access to information on that plan.

Also I have seen mention on here before of a formula which can be used for calculating any compensation due. Where can I find this? (yes I know I'm jumping the gun and I may get nothing).

Its called mortgage fundamentals. Although it works differently in your case as its calculated to the point you stopped using the endowment towards the mortgage. In 2000 in your case.

EdInvestor

Ex-Spendaholic wrote: »

So this is where the problem arises. I do not have documentary evidence. The policy was sold to a company on the internet. Even if someone was to say the name of it now I would not know it. One thing I do remember is that the policy wasn't a type that was wanted by all companies. I think it was something other than with-profits.

You can find the TEP traders all listed here, which may jog your memory.
https://www.apmm.org.

Ex-Spendaholic

Thanks everyone for your help. Unfortunately I don't retain bank statements. I check them for anything that looks untoward and then they are history.

I didn't realise there are so few of these traders. Neville James is sounding familiar but I've maybe just read their adverts or something. I'll give them a call and see if they have ever heard of me but again now that its 8 years down the line they may not have records.

turbobob

Just a question, how have you sold a unit linked policy invested in a managed fund? Generally only non unit linked with profits policies are tradeable.

Anyway, if you can't find any evidence of how much you sold it for, I would explain that and ask if they can base the calculation on the surrender value at the date you sold the policy. As its managed fund it should be possible as it will essentially mean looking up how many units you held at the time and the unit price.

Ex-Spendaholic

To be totally honest I'm not sure what type of policy it was. The documentation refers to L&B Flexible Mortgage plan. (does that mean anything to anyone?) All I remember is that day in August 2000. It was a Friday and the rain was bouncing. I opened that letter talking about a potential £11K shortfall and paniced. I looked on the net and some companies would take it and some wouldn't. It could be any type of policy for all I know but that reference to managed fund is in their letter.

turbobob

Like I said, if you no longer have the information, explain this and ask if they can calculate based on the surrender value of the policy at the time.

But it does sound strange that anyone would buy a managed fund policy on the open market.

dunstonh

L&G offered both unit linked and with profits funds. So, it could be either. Although there is no second hand market for unit linked funds as no-one is going to pay you more for units they they can buy themselves at normal retail price.

silvercar

Don't raise your hopes to high. We had a similar story, also with L&G, though we have never sold the endowment.

They reviewed and said that without documentary evidence either way they would accept it was mis-sold. They then calculated that we were not in a worse off position than if we had taken a repayment mortgage and so weren't entitled to compensation. Supposedly the decision to accept that we were mis-sold is made independentaly of the calculation that of any compensation due. :rolleyes:

Remember the compensation is designed to put you in the situation you would have been had you taken a repayment from the start, not to ensure the endowment fully clears the mortgage.

Ex-Spendaholic

UPDATE:

I phoned L&G on 14 October and advised that I had no documentary evidence. The guy I spoke to said he would refer it on and get back to me with the next course of action. I then took off for 2 weeks holiday and returned last night.

Waiting on me was a letter from L&G. They did the calculation on the assumption that I sold the policy for £3200. The result is they are offering compensation of £1730.37. :j :j How delighted am I? I honestly never really did believe I would get anything out of this but thought I would do it to close the matter for good.

Thank you so much to Martin, dunstonh and all the other helpful people who have inspired me to do this. :beer: