Help needed to write to Ombudsman please,

jackie005

EdInvestor wrote: »

Ok as soon as they arrive, we're in business.

From Scottish Widows.
Sum Assured £9,500
Current value £3,535
Maturity date Dec 2013
Illustrative Value at maturity as follows
£4,860 £5,340 £5,860


Pretty awful!

Many thanks Jackie.

jackie005

Just spoken to FSO who were extremely helpful.
FSO tell me that although the bank say I'm 'timed barred' that it may not be the case.
They are sending me the necessary paperwork to complain.
Gotta be worth an effort, hasn't it?

Regards Jackie

EdInvestor

jackie005 wrote: »

Illustrative Value at maturity as follows
£4,860 £5,340 £5,860

Hi Jackie

I've used the surrender value of 3398 you mention in an earlier post (the current value is something different).

Based on that, if you cashed in the endowment now and used the lump sum to reduce your mortgage, also increasing the monthly mortgage payment by the (now redundant) endowment premium of 18.20 at maturity you would have a return of 6055

This beats all their forecasts so I suggest that you surrender the endowment immediately and proceed as above. It is also likely to be sensible to stop paying the 50 per month into the ISA, and add that money also to your monthly mortgage payment.That will pay it off faster and also reduce any shortfall.

Leave the ISAs as they are though (dn;t close them), to grow as long term savings or use to pay off any shortfall you might have on the mortgage at the end.

This is definitely a case where keeping things simple can save you a lot of money.

jackie005

Hiya,

I can see that your suggestion would be in my best interest but before I make up my mind could you answer me a couple of queries?

A. When I took out the morgage it included life cover to the value of the morgage. If I now surrender the endowment would I also be cancelling the life cover? I'm now really ancient and taking out a new life cover would be really expensive.

B. If I was to surrender the endowment, how would this effect any decision the Ombudsman would make?

Yesterday I spoke to the FSO. The Advisor said that I was possibly given bad advice by the bank 2000 and as I still have the paperwork from the bank stating their suggestion was to was to put £50 per month into an ISA to cover the shortfall...then maybe this could possibly act in my favor.
The FSO are sending me paperwork and have asked that I include all copies of bank correspondance.

Once again, I can't thank you enough for your advice, it has certainly opened up my eyes to how irresponsible I have been regarding my finances.

Kindest regards Jackie.

dunstonh

The FSO are sending me paperwork and have asked that I include all copies of bank correspondance.

At this stage, the FOS cannot get involved. They may be telling you all these things but all they are going to do is forward it to the provider who will in turn almost certainly say the time bar is valid. No doubt you will go to the FOS who will chekc the time bar and they will say the time bar is valid.

Some early time bars turned out not to follow the laid down rules (typically those that started the clock in 2001 but a later date was used that did and most of these expired in 2007).

You need to be prepared for rejection as I doubt the FOS will overule the time bar. The dont very often.

jackie005

Many thanks for your reply.
I do appreciate what you are saying but I have nothing to loose by writing, all it's going to cost me is time, that's now going to be a lot easier as I now have all the paperwork at hand.
Kindest regards Jackie.

EdInvestor

jackie005 wrote: »

A. When I took out the morgage it included life cover to the value of the morgage. If I now surrender the endowment would I also be cancelling the life cover?

Yes

I'm now really ancient and taking out a new life cover would be really expensive.

The price of life cover has come down a lot in recent years, have you actually checked how much it would cost? This is a very small mortgage.

B. If I was to surrender the endowment, how would this effect any decision the Ombudsman would make?

It wouldn't affect the decision.

Yesterday I spoke to the FSO. The Advisor said that I was possibly given bad advice by the bank 2000 and as I still have the paperwork from the bank stating their suggestion was to was to put £50 per month into an ISA to cover the shortfall...then maybe this could possibly act in my favor.

So are they suggesting that you may have been missold the ISAs? AFAIK there is no time bar applying to ISA misselling.Timebars only apply to endowments.

jackie005

FSO didn't suggest anything but did say I may have received bad advise re the banks suggestion that I took out an ISA to cover the shortfall...Case of wait and see.
Many thanks. Jackie

dunstonh

jackie005 wrote: »

FSO didn't suggest anything but did say I may have received bad advise re the banks suggestion that I took out an ISA to cover the shortfall...Case of wait and see.
Many thanks. Jackie

You cannot read anything into what the FOS say. Every single product recommended can be mis-sold. In theory you can have a 100% mis-sale rate. So they will say that you may have received bad advice. They only hear what you have to say and have no evidence from the other party.

Using an ISA to cover a shortfall is not bad advice. It is a valid option. However, its not the only option so it all depends on how the other options were documented and ruled out.

EdInvestor

The appropriate advice in the situation of an endowment shortfall was usually to convert the relevant bit of the mortgage which the endowment would not now cover from an interest-only basis to repayment basis.This meant there was no risk that part of the loan would not be repaid.

Instead you were sold another risk-based product (the ISA). What was your aim when you visited the bank after learning about the endowment problem?Was it to resolve the problem of the shortfall? If so, you have a good case for misselling as sale of another risk based product does not achieve that aim.