Serious Fraud Office & FSA: fraud concealment?

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  • 25 years ago endoments still attracted tax relief and any endowment taken out before JUne 1984 stilll has 12.5% tax relief. Add to that the fact that MIRAS existed gving irelief on interest And Add to that the fact that many Repayment mortgages did not deduct the monthly mpayments until the end of the year drinving up the APR.

    In percentage returns after considering life insuranes costs those who put into an Endowment over the last 25 years have gained in terms of their input The problem is that the input wa based on greater returns and therefore there is a shortfalll.

    This shortfall does not equal a loss. Those with a repaymet mortgage will not have the shortfall but would have paid more into it..

    I am not saying that anyone is blameless for this scario, but with the given facts presented 25 years ago an Endowment was GOOD advice. The problem has been the lack of management as goal posts have moved over the years.

    Lower returns did coicide with lower interest rates so IF many had used the savings on interest (which has existed for a number of years now) to back up their endowment savings with another investment or even partial repayment then the gap would have been more likely to have been bridged and the total paid in most cases of 25 year mortgages would have still been less for Endowments than Repayment models.

    As for blaming IFAs, some deserve it, but most of the dodgy advice was given by tied advisers representing mortgage companies. or single life companies.
  • DavidLaGuardia> but with the given facts presented 25 years ago an Endowment was GOOD advice.

    Sorry David - your opinion is subjective not objective.

    When your opinion or judgement does not fit with the entire facts - it is your judgement that is wrong.

    HOW IS ENDOWMENT FIT FOR PURPOSE OF MASSIVE LOAN REPAYMENT?

    The Endowment was known to be unfit for purpose AND PROVEN SO!

    I will have personally paid out a LOT MORE than I will get back.

    You should really also check the definition of TORT.

    Quote:

    Derived from the Latin word tortus which meant wrong. In French, "tort" means a wrong". Tort refers to that body of the law which will allow an injured person to obtain compensation from the person who caused the injury. Every person is expected to conduct themselves without injuring others. When they do so, either intentionally or by negligence, they can be required by a court to pay money to the injured party ("damages") so that, ultimately, they will suffer the pain cause by their action. Tort also serves as a deterrent by sending a message to the community as to what is unacceptable conduct.

    http://www.duhaime.org/dictionary/dict-t.htm

    The Financial Industry conned everybody for millions upon millions of pounds in fees - making them massive profits.

    The damages - for everybody - include monies not paid to fulfil the large mortgage loan - the principal reason for taking out Endowment.

    I have also lost the benefit of five and half years Repayment Mortgage Scheme churned from me.

    DavidLaGuardia> As for blaming IFAs, some deserve it, but most of the dodgy advice was given by tied advisers representing mortgage companies. or single life companies.

    It can be seen that the IFAs gave exact same advice as my building society - the only difference is that some IFAs were ignorant (therefore negligent) that Endowment was 'unfit for purpose'.

  • Sorry David - your opinion is subjective not objective.

    When your opinion or judgement does not fit with the entire facts - it is your judgement that is wrong.

    I have tried to consider ALL the facts and mentioned some of the majors factors that made an Endowment a reasonable proposition based on the math and the various reliefs given. Without the benefit of hindsight many people would have viewed endowments as a prudent financial decision and in terms of Tort, any advice would have had to consider the facts known at the time.

    I have no reason to disbelive that you will have less than you paid in, but this would be unusual and even more so once the cost of life cover is taken into account, before we even get to the tax relief.
    The problem has been one of reaching the target as the Presumed rate of growth was lower
    At March 2000 (when current markets reached their nadir in recnet years) the Times published a list of With Ptrofit Endowments over a broad range of companies from the worst to the best. They ranged from not so bad afterall to good. One can also see similar results in default unit linked funds.
    I am not going to whitewash the genuinely poor advice that has happended but I don't see that endowments were universally inappropriate. I would however struggle to defend ones that were sold later on when reliefs were removed and more flexible investment products game on the secen starting with PEPs etc. But even the latter would only be suitable to a certain risk type. However what you are contending is the situation that presented itself twwenty five years ago when Life Assurance Premium Relief was very attractive indeed.
  • Correction the report was March 2003 not 2000
  • theGrinchtheGrinch Forumite
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    you obviously feel passionate regarding this matter. you should get some legal advice; ideally with likeminded people.

    is there a finanical ombudsman available?
    "enough is a feast"...old Buddist proverb
  • theGrinchtheGrinch Forumite
    3.1K Posts
    Part of the Furniture 1,000 Posts
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    you obviously feel passionate regarding this matter. you should get some legal advice; ideally with likeminded people.

    is there a finanical ombudsman available?
    "enough is a feast"...old Buddist proverb
  • DavidLaGuardia> I have tried to consider ALL the facts and mentioned some of the majors factors that made an Endowment a reasonable proposition based on the math and the various reliefs given. Without the benefit of hindsight many people would have viewed endowments as a prudent financial decision and in terms of Tort, any advice would have had to consider the facts known at the time.

    Sorry David - you have not considered ALL the facts - you seem to pretend that the Financial Industry did not know about market crashes and declines, like that which has recently put untold thousands upon thousands in financial difficulty.

    Given that it is a gamble, you have yet to explain how an Endowment policy can objectively be 'fit for purpose' of massive loan repayment.

    Indeed - it has been proven to be 'unfit for purpose' - true or false?

    The Financial Industry did not need hindsight to know about market crashes and declines - therefore are liable for any damages that arise out of their fraudulant (or according to those niave beyond belief - negligent) advice.

    FACT: The Endowment was known by the Financial Industry to be unfit for purpose AND WAS PROVEN SO!

    They could not deny this in a court of law - it would be perjury.

    As you know, it is criminal offense to make false statements under oath.

    The Judge has only to ask the Defendant - "How would the loan be repaid if there was a decline in the market or a crash?"

    FACT: We had Repayment Mortgages - the Financial Industry defrauded us by selling a replacement product that was 'unfit for purpose'.

    How have you considered ALL the facts - when you ignore those above?
  • If you but a house are you gambling?
    FACT
    Yes it is a gamble
    Property prices may go down and in some circumstances not recover, it is possible by an umber of factos
    Is it a reasonable gamble to take? Many would view it as such.

    If you invest in a market over 25 years through regular payment are you gambling
    FACT
    Yes it is a gamble
    Is it a reasonable gamble to take? Many would view the period of time involved as reasonable.
    Has anyone lost saving in major equity markets over 25 years in the past 100 years?
    FACT
    No They have not. Even if they invested imediately before thev1929 crash and depression. In fact much shorter periods could be used. (The shorter the time more risky though.)

    A repayment by contrast is risk free. Agreed. But when faced with the measure of risk against the reliefs that existed in 1979, would you honestly not havr chosen to take the endowment route over 25 years?
  • DavidLaGuardia> If you buy a house are you gambling... etc.

    Good try David - but a silly argument - like I have not heard it before :-)

    Like after the 1929 market crash those destroyed families had not lost anything ;-)

    You haven't fell for a financial advisor's propaganda, have you?

    DavidLaGuardia> A repayment by contrast is risk free. Agreed. But when faced with the measure of risk against the reliefs that existed in 1979, would you honestly not havr chosen to take the endowment route over 25 years?

    Not being 'risk averse' - I may risk my 'spare money' on the stock market.

    It would be stupid for anybody to gamble family home - wouldn't it?

    Answer just one very simple question: Had there been large drop or market crash - how would I be able to afford to repay the massive loan?

    This question is especially important to those approaching old age.

    Like you admit, "repayment by contrast is risk free".

    Yes - there is risk in most we do - does that make fraud in these things okay?

    I know quite a bit about risk.

    Risk is not just about probability - which is what corrupt people would like you to believe.

    Risk has two main elements: 1) the probability that something will go wrong 2) the seriousness of consequences if it does.

    Do you honestly understand the seriousness of consequences for millions of people if Endowments go wrong?

    You try associate one risk with another to suggest that because one is acceptable then so is the other.

    *Specifically - you would advocate making the risk greater should people follow your suggestion*

    To show how silly this argument is - let us follow up on the oft-used example of those that demonstrate that avoidance of all risk is impossible (like it was some excuse for 'mis-selling'):

    There is a risk of getting killed just crossing the road. This act takes time and requires alertness. More time is required when making diversions for Pelican and Zebra crossings.

    You are saying it is acceptable to cross the road for the next 25 years without the aid of a safety crossing - with your fingers in ears and eyes closed. Just think of all that extra time and effort saved over 25 years by not looking for traffic.

    Why would anybody advocate making the risk greater?

    Please answer some very very very simple questions - they are not difficult despite what some would like you to believe.

    To help you, I have even wrote my answers in brackets :-)

    a) You have yet again failed to explain: How is Endowment 'fit for purpose' - when market could crash or decline any number of times over a 25 year period?

    (It is fact - that Endowment is NOT 'fit for purpose')

    b) Give volatility of world market: What are the odds on Endowment repaying a massive loan in 25 years time - 2 to 1? 1 to 3? Evens? Any guess?

    (It is fact - that there is absolutely no way of knowing)

    c) Why is 'mis-selling' a most expensive financial product - that is 'unfit for purpose' - not fraud?

    (It is fact - that this is an obvious major case of fraud)

    Perhaps just one single bright intelligent person can say why any of these facts are incorrect or just mere opinion.
  • Grinch - you are not sympathetic to those that have swindled us, are you?

    You know that some people were told they would have to increase payments to make up for 'predicted' shortfall in Endowment Mortgage - more cash in commission for the crooks.

    Despite paying thousands of pounds extra for this 'predicted' shortfall - how does this protect people should the market crash or fall again?

    Would you advocate betting more on a losing horse?

    theGrinch> you obviously feel passionate regarding this matter. you should get some legal advice; ideally with likeminded people.

    The word 'passionate' is not right.

    I am angered by this fraud - but moreso by the cover-up.

    Hmmm - like minded?

    You talk as if the facts quoted are merely my opinion :-)

    Facts beat opinion and judgement - even the Prime Minister had to admit that.

    Let us see if you are like minded Grinch :-)

    Please answer the very simple questions (a, b, and c) in todays previous post to DavidLaGuardia above and also the following easy peasy questions.

    And to help you, I have wrote my answers in brackets also :-)

    d) Do you think those that 'mis-sold' (defrauded) us in Financial Industry should get away with it - if so why?

    (It is fact - to let them get away with it would be a perversion of Justice and no deterrent for something similar happening again in future)

    e) Who ultimately ends up paying FSAs large fines?

    (It is fact - it is us that ends up paying - the customers and investors)

    f) Should it be up to individual victims to pursue legal action in this massive con - or the authorities?

    (It is fact - the SFO are legally charged with prosecuting major cases like this and the FSA are responsible for protection of consumers and reducing financial crime)

    After many communications - neither the FSA nor the SFO deny that this was fraud - try guessing why that is - the answer to that is just as simple.

    I was proven correct two years after saying that vCJD could be carried in blood - when Government had previously always denied this - calling the risk only "theoretical" at best. This is all documented.

    It is certain that I will eventually be proven right about this also - the facts are there for all to see.

    Please prove me wrong.
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