Act now on mis-sold endowments: new article

FrugalFinn

Hey all,
My Mum is going through a nasty divorce at the moment and is very poor! She has been in touch with the company that administer her and my dad's two endowmnet policies so that they can pay some of their mortgage off as part of the divorce. She wanted to see if there was any way of getting compensation as they were told when they 'purchased' them that the mortgage would be paid off when they matured. And it's turned out to be a long way from being sufficient. Anyway, the company has told my mum that they can't help her because the policies were taken out when they lived in Germany while dad was serving in the forces.
I don't have very much information I'm afraid as mum is useless at the moment (no offence Mum!) due to the stress of the divorce etc, but would this be generally correct? Would the advice they received be invalid just because they were living in BAOR?
Any advice would be very gratefully received.
Thanks!

mayb_2

FrugalFinn - are you saying that although living in Germany these endowments were taken out with companies over here? When serving in another country your nationality doesn't change. If so why would these not fall under the same redress scheme as those living here and taking out the policy. The companies are British based and therefore subject to our laws I presume. I wouldn't be suprised if there was some loophole they were hiding in though - perhaps your mother should challenge them and see what they say - then take it from there. Are there letters from the company warning of shortfalls etc? If so how can they claim that there is a difference because they were living in Germany at the time of purchase.

dunstonh

Anyway, the company has told my mum that they can't help her because the policies were taken out when they lived in Germany while dad was serving in the forces.

That is correct. The consumer protection applies to mainland Britain and companies that are based in the UK. Companies based abroad didn't offer FSA/FOS protection in the past. Protection comes from the company that gave the advice. If they were living in Germany and saw a UK based adviser then thats different.

The companies are British based and therefore subject to our laws I presume.

When the industry started to get rid of the dodgy advisers of old, many went into Europe where they could continue to sell products outside the regulation of the FSA. Ex-pat communities and armed forces were the main areas they picked on.

HAVEFAITH

Hi,

Can anyone out there tell me if you refer a mis-selling situation beyond the 6 month date stipulated is that curtains for any case. The FOS have a 'exceptional circumstance' and it's on this we are trying to progress. The company that mis-sold our policy did not return calls etc and we are determind to go via the FOS and not third party companies ...

turbobob

Yes in genuine exceptional circumstances the six month rule may be waived. This could be for serious ill health to give an example. If the company and/or FOS don't agree the circumstances are exceptional then you have the right of appeal via an Ombudsman but bear in mind this will likely take a long time - several months, maybe longer.

turbobob

dunstonh wrote: »

That is correct. The consumer protection applies to mainland Britain and companies that are based in the UK. Companies based abroad didn't offer FSA/FOS protection in the past. Protection comes from the company that gave the advice. If they were living in Germany and saw a UK based adviser then thats different.

I believe that to sell a UK companies endowments they would have had to have been authorised by whatever the regulator was at the time. If they weren't then the provider would have been at fault for allowing an unauthorised firm to sell the policies. I remember dealing with some ex-pat IFA's abroad in the past (I've worked at an insurer) and I'm pretty sure they had to be SIB authorised as we couldn't process the business without this.

Bearing this in mind would clients of these IFA's not have the same rights and protection as if they had dealt with a UK company?

dunstonh

turbobob wrote: »

I believe that to sell a UK companies endowments they would have had to have been authorised by whatever the regulator was at the time. If they weren't then the provider would have been at fault for allowing an unauthorised firm to sell the policies. I remember dealing with some ex-pat IFA's abroad in the past (I've worked at an insurer) and I'm pretty sure they had to be SIB authorised as we couldn't process the business without this.

Bearing this in mind would clients of these IFA's not have the same rights and protection as if they had dealt with a UK company?

Insurance companies used to dish out agencies to anyone that wanted one. Whilst checks are made nowadays, that was not always the case and not always a requirement.

Whilst the people seen abroad may have called themselves IFAs or financial advisers (or any name they wanted), they wouldnt have offered the protection that exists had they been based in the UK.

The following is a copy and paste from the FOS:
Whether you could bring the complaint to us would depend on where the business that provided the financial service was based – not on your particular nationality or on where you were living at the time.
Broadly, we cover businesses that provide retail financial products and services in or from the UK.

mayb_2

dunstonh surely that means that if the product sold was a British one then the complaint qualifies no matter what your nationality of place of abode at the time? 'in or from the uk'? If you are a serviceman living abroad then wherever you are, you are working for the government here and are conceivably in Britain as far as your employment is concerned - you have no free will as far as your base is concerned but are paid by the Government as a British worker.

That and the authorisation question posed by turbobob should cover it in all directions and the case could certainly be argued on that basis. Oh but I forgot, the Ombudsman doesn't have to look at all the evidence does he.

Your quote appears to come from an individual reply from a Member of the Ombudsman service or are you saying this is a published policy of the FOS dunstonh?

dunstonh

dunstonh surely that means that if the product sold was a British one then the complaint qualifies no matter what your nationality of place of abode at the time?

You are not complaining about the product. You are complaining about the advice given.

Personally, I think in the case of armed forces it was very wrong as effectively bases are little bits of UK sitting in a different country. However, that is how the regulation worked. In the case of expats then I have no problem with it as they are in a different country.

Your quote appears to come from an individual reply from a Member of the Ombudsman service or are you saying this is a published policy of the FOS dunstonh?

Taken straight from the FOS website.

This is not a grey area or something you can debate. This is the way it was. Its no different to someone who signed their application on 28th April 1988 being rejected as its pre-regulation and someone who signed on 29th April 1988 being accepted as that is the day regulation began. No matter how much you feel its unfair or wrong, it isnt going to change a thing.

mayb_2

more's the pity dunstonh - if something is wrong it is wrong - end of. It is not right that companies who accepted the business can distance themselves as to how they got it and the results of that - authorisation should address that and so no business should be accepted from unauthorised sources and such authorisation should require an acceptance of certain standards and the responsibility of applying them.

Happy New Year by the way.