Serious Fraud Office & FSA: fraud concealment?

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  • cloud_dogcloud_dog Forumite
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    Garry

    You obviously enjoy (perhaps not the best word to use) putting together factual well constructed, meaningful arguments supporting your opinion.

    I suppose my problem is that you will not acknowledge reasonable argument that is in opposition to your own - you don't have to agree, just acknowledge its value. I thought (my opinion, I know) that DavidLaGuardia posts were reasonable and meaningful and offered another perspective. No, they did not address all points relating to your posts but they addressed a reason why endowments 'may' have been considered a reasonable investment vehicle.

    Your facts focus on specifics that 'may' not be the norm. For example I was mis-sold an endowment and have been recompensed by the provider so that I am not finacially worse off - so from my perspective things have been addressed. I know there are other people out there who probably have not received any recompense but without knowing all the ins and outs I cannot comment and connot state categorically one way or another.

    I can only assume that your pension contributions are invested in cash as anything else is not 'fit for purpose' for a such an important job.

    I have read your web sites and, as I said earlier, you 'enjoy' (wrong word again, but cannot think of the one I want) raising awareness and putting forward facts to back-up your opinion.

    For me, I truely beleive in my tag. I have a responsibility to understand what I am doing, otherwise don't do it. With due respect to people who have finacially lost out I agree with DavidLaGuardia posts that it seemed 'reasonable', at a point in time, that endowments would be ok. Hindsight is a wonderful thing.

    Perhaps this thread should be moved to the Discussion Time or Vent Board(s).

    Cloud_dog
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone

  • 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?.........

    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.

    Starting with the last paragraph. I agree with you. Doing anything is a balance between the likelyhood on an event and the effects of that event
    I know there are many events beyond my control that could kill or maim, me when I drive on a long trip
    Being killed or maimed is one of the most undesirable things (second only to it happening to a loved one who may also be in the vehicle).
    Yet I make the decision on the balance of probability that I still make the drive
    Now that is an extreme example, but then so nearly is the probabilty of TOTAL loss which you are proposing.

    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.

    It does not mean a peson has to take their hand off the driving wheel. If you but an important investment an not lokk at it, then more fool you. The provision made for a payment in the future can be monitored in line with investment returns. endowments can be altered within given parameteres and where this does not satisfy, necessary parrallel savings can be made. In terms of this being possible, lower interest rates mean lower payments leaving room in a budget to do this during slower growth.

    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')

    It is your opinoin not a fact
    take a look at 25 year histories there are bull and bear markets, but in the end the bull has charged faster than the bear. You also ignore the level of protection in With Profit funds for policies with specific maturity dates (it is not perfect but it is significant)

    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)

    Is volatility any different or worse than many prvevious periods? While I know the historical odds of being killed crossing the road I do not know what risks may be peculiar to my own situation tommorow. I have to rely on historical evidence and also an understanding of the existing economic factors, but as long as those do not indicate the collapse of Western civilization, I make a decision as best I can according to the evidence before me.

    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)

    Again we have opinion about "Fit for the purpose"
    I don't persoanlly like endowments for their expense and inflexibility, but the cost of the contract must also be reflected by whether other factors act favourably. Many endowments offered chep add on insurances, but to avoid that debate the overwhelming cost benefit was tax relief, which is still retined in part for endowments taken out before the changes in 1984. even after that there was MIRAS for a long time.

    As Cloud says, please consider other views besides only your chosen agenda as you have ignored some of the points I have made.
  • Cloud Dog - I am sure everybody here knows the difference between fact and opinion.

    They know even so-called 'expert opinion' in a Court of Law is overruled by the facts.

    The facts stated above were always know by the Finance Industry - they cannot deny this.

    cloud_dog> You obviously enjoy (perhaps not the best word to use) putting together factual well constructed, meaningful arguments supporting your opinion.

    Thank you for the compliment :-)

    Quite frankly, it really sickens me that I have to "state the blinking obvious" - there are more intelligent and better educated people in authority that have a duty to take care of these things.

    But what makes me feel even more ill is - why are people so afraid to face the facts.

    cloud_dog> I suppose my problem is that you will not acknowledge reasonable argument that is in opposition to your own - you don't have to agree, just acknowledge its value. I thought (my opinion, I know) that DavidLaGuardia posts were reasonable and meaningful and offered another perspective. No, they did not address all points relating to your posts but they addressed a reason why endowments 'may' have been considered a reasonable investment vehicle.

    Yes - DavidLaGuardia posts are indeed reasonable and meaningful and certainly offered another perspective (strangely enough, that perspective driven by entire Finance Industry).

    However - when judgement or opinion does not fit the facts - then this opinion is most certainly wrong.

    My opinions are sometimes wrong - I always admit when they are wrong - only a fool (or corrupt politician) would not.

    However, nobody has proved these (clearly stated) facts wrong.

    I sincerely doubt if David, or anybody else for that matter, will ever address all the facts stated.

    You will see that I asked people nicely - they refused.

    I think we all know why.

    Endowments 'may' be considered a reasonable investment vehicle - for your spare cash - but certainly not for the repayment of the largest loan you are likely to make - or the repayment of any loan come to that.

    You have all seen this recently proven.

    cloud_dog> Your facts focus on specifics that 'may' not be the norm. For example I was mis-sold an endowment and have been recompensed by the provider so that I am not finacially worse off - so from my perspective things have been addressed.

    The facts stated focus on specifics that go directly to the root of the problem - true or false?

    If you are content to let a thief get away with just giving your money back - then I am happy for you.

    Having seen variability of outcomes - I am quite sure other people may not have been able to prove their case against your provider.

    Quite simply - your provider got away with screwing other customers.

    If you want your provider to go unpunished for their 'crime' and do not want payment for the worry it has caused you and partner - then that is entirely up to you.

    I am sure your providers are happy also - they are now free to find another con - which they know they will get away unpunished again.

    cloud_dog> I know there are other people out there who probably have not received any recompense but without knowing all the ins and outs I cannot comment and connot state categorically one way or another.

    Whatever the ins and outs - all that got Endowment have been 'mis-sold' an unfit product - many of them will not be recompensed.

    cloud_dog> I can only assume that your pension contributions are invested in cash as anything else is not 'fit for purpose' for a such an important job.

    That is another matter which should certainly be addressed after this.

    It will never be addressed while everybody is too afraid to face facts of this massive Endowment Fraud.

    cloud_dog> I have read your web sites and, as I said earlier, you 'enjoy' (wrong word again, but cannot think of the one I want) raising awareness and putting forward facts to back-up your opinion.

    My opinion is based on common sense - the facts are demonstrably true - anybody is most welcome to disprove opinion or facts.

    cloud_dog> For me, I truely beleive in my tag. I have a responsibility to understand what I am doing, otherwise don't do it. With due respect to people who have finacially lost out I agree with DavidLaGuardia posts that it seemed 'reasonable', at a point in time, that endowments would be ok. Hindsight is a wonderful thing.

    Your tag is "Personal Responsibility - sad but true" - as I said before, "I do take personal responsibility of my actions - however, if I act wrongly - entirely because of my full reliance on somebodies deception or recklessness - they are the ones at fault".

    Again - it does not require hindsight for the Financial Advisors.

    I stupidly believed (along with the millions of others) that I understood what I was doing.

    After all, how could the authorities put millions of people at risk?

    This was before I realised that the government sometimes lie to us.

    Like I said earlier - even if I was telling a lie - let us pretend I completly understood what we were getting into and accepted the risk (even though - nobody has a clue in what financial position they will be in twenty five years time - therefore, they really only think they understand).

    How exactly does that make Endowments "fit for purpose" of a massive loan repayment?

    cloud_dog> Perhaps this thread should be moved to the Discussion Time or Vent Board(s).

    You know that I have no spleen to vent - I lost it after Papworth botched an operation :-)

    Please explain how this thread does not directly address the central issue of Endowment 'mis-selling'.

    Please explain what is rhetoric - even jail for guilty is logically explained (as we pay their fines).

    You seem to want me censored on this board - why is that - do you not want others to know these facts?
  • David - to use your analogy - you have a car that never breaks down or kills people (Repayment scheme).

    Why would you use a car that breaks down or kills people (Endowment scheme).

    Garry> 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?

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

    DavidLaGuardia> It is your opinoin not a fact - take a look at 25 year histories there are bull and bear markets, but in the end the bull has charged faster than the bear.

    You have yet to explain - what happens when policy is due after a big fall in the market?

    You will have to take into account that these people will be coming near to retirement.

    The principal purpose of Endowment is to repay a massive loan - it does not do this.

    So you can clearly see - it is fact - that Endowment is NOT 'fit for purpose'.

    Are you not aware that even the FSA say, "Where firms show past performance, they must also include a clear message stating that consumers should not see past performance as an indication of future performance"?

    http://www.fsa.gov.uk/consumer/advertising/past_performance/other_products.html

    Do you know why that is?

    Garry> 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?

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

    DavidLaGuardia> Is volatility any different or worse than many prvevious periods?

    That is the whole point David - nobody knows - true or false?

    My guess (given climate changes, declining oil stocks, more effective terrorists etc.) is that the future market will be more volatile - I fully admit that I could be wrong.

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

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

    DavidLaGuardia> Again we have opinion about "Fit for the purpose"

    It has been proven 'unfit for purpose' - by the fact that they cannot be relied upon to repay masive Endowment loans - true or false?

    DavidLaGuardia> As Cloud says, please consider other views besides only your chosen agenda as you have ignored some of the points I have made.

    The Financial Industry and your views fail to take into account most important central facts.

    I would certainly NEVER ignore any points that would have an effect on the facts.

    My agenda is purely to have the central facts addressed - and acted upon.
  • serpicoserpico Forumite
    169 Posts
    My agenda is purely to have the central facts addressed - and acted upon.

    That's going to be a bit of a tough call.
  • You have yet to explain - what happens when policy is due after a big fall in the market?

    You will have to take into account that these people will be coming near to retirement.

    The principal purpose of Endowment is to repay a massive loan - it does not do this.

    So you can clearly see - it is fact - that Endowment is NOT 'fit for purpose'.

    You have yet to explain - what happens when policy is due after a big fall in the market?

    Fair comment but iunderstand the product.
    The structure of a With Profits fund favours those who have reached maturity by proecting their funds and applying market value adjustments on the pooled fund to those who dip out early.
    I am not saying losses or shortfalls can not occur clearly they can, but these shortfalls can be warned of and acted upon in advance.
    You have yet to explain - what happens when policy is due after a big fall in the market?

    DavidLaGuardia> Is volatility any different or worse than many prvevious periods?

    That is the whole point David - nobody knows - true or false?

    My guess (given climate changes, declining oil stocks, more effective terrorists etc.) is that the future market will be more volatile - I fully admit that I could be wrong.

    My goodness Garry take a look at what has happended inthe last twentieth century two world wars, depression, recessions., oil crisis...need I go on
    However I'm not going to concentrate on that point as we are concerned with whether endowments were a bad idea or not in 1979. I am not advoccating them now.

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

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

    Fraud is dependent on ignoring the facts and I have tried to explain what they were inb 1979. If you dismiss this this is the point when we must agree to disagree
    I am sorry, but the vast majority of 25 endowment maturities, while down on originbal projections have IN FACT been a good return for the investor. The shorfall is an indicator of falling growth and static premiums, but not a loss
    I would not enter into one now though, but that is not my position here
    If you do not believe the former to be the case, ask yourself why there are so many investors out there willing to buy endowmnets off people for greater than the surrender value? This is rhetorical and I appreciate other factors come into play, but the major one is that the returns with exsting bonuses are not that bad.

    FRAUD depedns on knowingly misleading, I think this is a difficult point to prove with endowments sold 25 years ago, and I believe it is plain wrong anyway
  • cloud_dogcloud_dog Forumite
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    cloud_dog> Perhaps this thread should be moved to the Discussion Time or Vent Board(s).

    You know that I have no spleen to vent - I lost it after Papworth botched an operation :-)

    Please explain how this thread does not directly address the central issue of Endowment 'mis-selling'.

    Please explain what is rhetoric - even jail for guilty is logically explained (as we pay their fines).

    You seem to want me censored on this board - why is that - do you not want others to know these facts?

    Garry

    I'm affraid I do not agree with all of your 'representations' be they fact or opinion (subjective, I kow).  

    I think we will just need to agree to disagree.

    Wrt me wanting you to be censored, I think that was a bit out of order.  I could get pedantic and ask you to specifically point out how I suggest you are censored but, its really not worth it.  I merely thought that moving this thread to the "Discussion Time" might make it avaialble to others who may share / be interested in debating / expanding your thoughts.

    Goodbye, Cloud_dog
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • DavidLaGuardia> I am not saying losses or shortfalls can not occur clearly they can, but these shortfalls can be warned of and acted upon in advance.

    How you act against a large fall towards the end of 25 year policy when reaching old age - when your investments will be taken out at the same time?

    This Endowment was not sold with insurance policy to repay any shortfalls - was it?

    How does this make Endowment 'fit for purpose'?

    DavidLaGuardia> My goodness Garry take a look at what has happended inthe last twentieth century two world wars, depression, recessions., oil crisis...need I go on However I'm not going to concentrate on that point as we are concerned with whether endowments were a bad idea or not in 1979. I am not advoccating them now.

    What exactly has changed for anybody not to advocate them now?

    Merely your false perception of the risk.

    The experts always knew the real risk - that the market could crash or make massive decline *at any time*.

    DavidLaGuardia> Fraud is dependent on ignoring the facts and I have tried to explain what they were in 1979.

    The relevant facts have never changed - have they?

    e.g. Even though the market was rising - the 'Experts' knew that a gamble was unfit for massive loan repayment (2-3-4 times joint annual salary) - and was *proven so*.

    We may have disagreement of opinion - however the facts are undeniable (e.g. Endowment was unfit for purpose of mortgage repayment).

    cloud_dog> I'm affraid I do not agree with all of your 'representations' be they fact or opinion (subjective, I kow).

    My opinions may be wrong (which, as they fully fit the facts, I doubt) - I respect your opinions as being honestly held - we will have to agree to disagree.

    However, the facts are demonstrably true - which specifically do you say are wrong and why?

    I am always open to intellectual debate and willing to be proven wrong.

    cloud_dog> I merely thought that moving this thread to the "Discussion Time" might make it avaialble to others who may share / be interested in debating / expanding your thoughts.

    Sorry Cloud Dog - I believe moving this thread to a general area (away from that specifically designed for it) would be most detrimental to discussion.

    I thought that was your intent.

    Apologies if I got wrong end of the stick :-)
  • BBC Working Lunch did a special on Endowments last week - so I sent them this email.

    I guessed that they would ignore it (like most financial 'experts') - as they could not counter the facts with any logical argument - other than everybody was simply incompetent at their job (not to see that it was 'unfit for purpose').

    Subject: Endowments - Facts v. expert opinion

    Background: I was what you call 'mis-sold' an Endowment. I know the difference between facts and opinion and have had an official complaint against the FSA found in my favour. This was for the FSA's "unprofessional lack of integrity" in answering a few simple questions on this Endowment 'problem'.

    On Tuesday Simon asked Walter Merricks, the Chief Financial Ombudsman, "Do you honestly think that anyone should have been sold an Endowment policy to cover their mortgage?"

    Mr Merricks replied, "Oh yes, there are many people who for whom it was, at the time, an appropriate way of funding what they thought was going to be suitable for their mortgage."

    Simon interjected, "If they had the risk explained to them?"

    Mr Merricks confirmed, "If they had the risk explained to them and if they were the sorts of people for whom an Endowment Investment was a suitable kind of investment."

    Three principle facts (not to be confused with mere opinion):

    1. Endowment shortfall could have been a lot worse.

    2. Endowment gamble was clearly not 'fit for purpose' of repaying your families largest loan (and was *proven so*).

    3. Financial experts always knew Endowment was not 'fit for purpose' - and yet continued for many years to recommend this gamble or misleadingly put it forward as a viable option.

    I believe the only way to make Financial Industry (and authorities) admit the facts would be in a Court of Law. As we know - facts beat any 'expert opinion' or anyone's judgement.

    Mr Merrick seems to have little regard for people's intellect and, like the FSA, has the main priority for trying to get confidence in the Financial Industry.

    Why do I hold this opinion of Mr Merrick?

    1. You cannot know your position in twenty-five years time - other than you and partner will hopefully both be alive and approaching mid-life or old age in reasonable health. You will no doubt be worrying if you will have enough for a happy retirement - you may not be able to afford and certainly do not want to be paying any mortgage shortfalls. Forget this "suitable kind of investment" propaganda rubbish - the fact is that people bought endowment to repay a massive loan. Even if the risks were explained to them - when is it 'good financial advice' to gamble the repaying of your families largest loan?

    2. How then is it "going to be suitable for their mortgage"?

    3. If the market is rising or falling "at the time" - when is a gamble ever "going to be suitable for their mortgage"?

    4. He calls it an "Endowment Investment" - how does this make gambling on the stock market fit for the purpose of repaying your family's largest loan?

    5. I am certainly not 'risk averse' - the phrase they use to disqualify legitimate claims by people that were 'mis-sold' endowments. However, it would be really stupid to gamble with the repayment of my family's largest loan - true or false?

    These simple points should highlight some of the main deceptions to any intellectual observer.

    Why do you not inform your viewers?

    Regards,

    Garry Anderson
    http://www.woolwichsucks.co.uk/
    The Condemned Building Society
    http://www.skilful.com/
    Health Warning - under reporting of elective surgery errors in UK and Sick of Spin
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