Act now on mis-sold endowments: new article

Jarnn

Hi everyone,

I am looking for some views / suggestions from the wealth of knowledge and experience shared among fellow members.

My situation....

I bought a property in 1991 and had my mortgage arranged through a building society and was sold an endowment policy by PEARL ASSURANCE (a company we used for various life insurance / assurance policies)

My intention at the time was to have a 'Repayment' type of mortgage and the Pearl were told this at the time.
When our regular agent arranged a meeting with us it was to include one of his colleagues responsible for mortgages etc as he himself didn't deal with that side of the business.

At the meeting, I stated that I wanted a repayment type but the 'salesman' pushed the endowment type through most of our meeting and the fact that we would have our mortgage paid off AND have a nice lump sum of cash for ourselves at the end of the term.

After a few hours I ended up signing up to an endowment policy and the paperwork etc was completed and sent to the building society by the Pearl to link up and complete the mortgage.

Having had an opportunity to clear my mind of the info being forced in by the agents, I contacted them and cancelled the policy again stating I didn't want an endowment but a repayment type. The building society were also informed.

The Pearl then contacted me again to visit to re-arrange a policy that I wanted.
On this visit the initial salesman attended and also his boss and once again they both went through the hard sell of pushing the benefits of the endowment whilst slating the repayment type - they stated that my morgage would be paid off by the endowment policy and that I would also have a lump sum of cash available as well.
They both pushed this continuosly as the best deal for myself and stated that repayment mortgages were dying out as they were more costly in the long term and I would be much better off with the endowment as these were replacing them.

Again, I relented and signed up to this policy as I needed to get my mortgage in place and didn't want to start trying to go through it all again.

My headache....

I sold the property in 1997 but maintained the endowment policy as a fall back life insurance cover and have had it for sixteen years now with it due to mature in nine years time.

I have had the various letters that it was falling short of planned payout figure, this didn't include the suggested additional figure the salesmen stated so was way below the expectations the salesmen used to close the deal.

I have also had the 'positive' letters now stating that the policy is back on track to pay the mortgage in full (so long as the returns continue)

My problem........

As I no longer have a mortgage to be paid from it, I had not considered myself to be in a position to have been able to make a claim against the company.

However, the issue is whether I was mis-sold the policy in the first place and not whether I have a mortgage and should I be able to pursue this?

I would welcome any and all feedback from the members and thank everybody for their help /advice,

Jarnn

dunstonh

However, the issue is whether I was mis-sold the policy in the first place and not whether I have a mortgage and should I be able to pursue this?

You are in a surplus position. What redress do you think you are going to get?

Redress is calculated on you being out of pocket. You are not out of pocket. You would have benefited from lower mortgage payments and you are on track for a surplus payment.

It would be like complaining because the endomwent is doing what you were told it would do.

Jarnn

Cheers Dunstonh,

I appreciate your points.:o

Had I filed the complaint a year ago when the paperwork suggested there was going to be a large deficit / shortfall would I have been better placed?

Was I too patient for my own good?:cool:

Would no longer having a mortgage have affected any claim as the payout would have been much lower than the stated value at start of policy.

What if the returns start to drop again and I end up off target once more - would it be too late to claim?

I suppose it just goes to show the benefit of listening to the general theme within this website and also the forums -

ACT ON IT QUICKLY - ACT NOW - BEFORE IT IS TOO LATE

Many thanks again and hopefully it will cheer everybody up - someone wanting to complain because it does exactly as it says on the packet:rolleyes:

Cheers,

Jarnn

mayb_2

I know what you are saying dunstonh but some things will stick in your mind more than others. If I had said yes I know there is a risk that my mortgage wont be paid at the end of the policy and I won't necessarily get a lump sum - I am sure I would remember it. Not only that, I am sure I wouldn't have bought it.

The average person did not know how these things worked and nor did they understand the ins and outs of the stock market. These things weren't an issue at one time because these policies did use to pay out as described, so nobody mentioned the risk at point of sale. It is only now with sites such as these, that people are finding out just what is happening here.

Therefore, the assumption should be that sheilavw's sister is telling the truth and has a case. Therefore all help should be given to her to enable her to answer the questions truthfully and to avoid some of the 'traps' set by these question papers.

I believe that people seeking to obtain something they are not due are savvy enough to know how to answer these questions and would not need to ask for help in this way.

Redress does not pay off the mortgage or give you a pension to look forward to, so why would anyone bother to pursue something like this, they would have moved their money when it started to look bad if they knew about the way these things worked.

I think the balance of probability would be that these were missold rather than the other way round. If these companies have already given redress to other similar claimants then the balance of probability increases in favour of the claimants too. I think it is shoddy to make each individual claimant jump through these hoops. They must keep records of who sold what and when. If they were missold to one, then it is probable they used the same technique when selling all of their policies. The claimant must be considered 'innocent' until proven guilty not the other way round. The FSA itself said that more of these policies were sold after it was known that they would not reach target. Commission on these was high and the gravytrain was pulling out.

dunstonh

Had I filed the complaint a year ago when the paperwork suggested there was going to be a large deficit / shortfall would I have been better placed?

Yes. You are not alone. Those that complained early in the process after 2002 got really big redress payments. Some of those endowments have now returned to surplus positions and they get to keep their redress.

The system the regulator chose isnt really fair to everyone on both sides.

Would no longer having a mortgage have affected any claim as the payout would have been much lower than the stated value at start of policy.

The calculation method would be different.

What if the returns start to drop again and I end up off target once more - would it be too late to claim?

There is the argument that you should perhaps get out whilst you are ahead. Especially when you consider you have a Pearl plan. However, you can only be timebarred three years after you have been warned of a high risk of not hitting target (sometimes shown as a red warning).

I know what you are saying dunstonh but some things will stick in your mind more than others. If I had said yes I know there is a risk that my mortgage wont be paid at the end of the policy and I won't necessarily get a lump sum - I am sure I would remember it. Not only that, I am sure I wouldn't have bought it.

You say that however, in reality it isnt the case. I did an investment case in 2006 and in 2007 the guy spoke to me on the phone and started accusing me of not telling him something yet I had. I referred him to my report and the copy email he responded to discussing the issue and then he suddenly remembered the conversation and reading. That was just after 12 months.

Therefore, the assumption should be that sheilavw's sister is telling the truth and has a case. Therefore all help should be given to her to enable her to answer the questions truthfully and to avoid some of the 'traps' set by these question papers.

Why should the assumption be that she is telling the truth? There are far too many people trying it on or have selective memories which are sudden perfect recollection in all the areas that suit them but cannot recall things which would work against them.

I'm not saying this person is doing that but the large number of fraudulent claims, many instigated by the dodgy claims companies, has created a lot of mistrust on some complaints. I know the complaints team at my network know which claims companies are dodgy and they will treat those with more distrust than others.

The innocent parties in this (on both sides) have been suffering due to those that knew the risks, knew what they were doing and have been trying it on with opportunistic complaints.

There have been many calls for the funding of the FOS to change and a number of the proposals include introducing a charge to complain which is refunded if not upheld. So many could just be resolved without the need for complaint if there was just some communication rather than going straight to complaint.

mayb_2

There have been many calls for the funding of the FOS to change and a number of the proposals include introducing a charge to complain which is refunded if not upheld. So many could just be resolved without the need for complaint if there was just some communication rather than going straight to complaint.

That was certainly not my experience dunstonh and I know a few more people posting here that would agree with me. Talking got me nowhere.
The double whammy of then having to pay for bringing a complaint in the first place would just double the injustice.

As you know I had my mortgage endowment redress without having to take it further than filling in the which model letter and then the document they sent me - no problem. This was not the case with my savings plan (endowment).

The innocent parties in this (on both sides) have been suffering due to those that knew the risks, knew what they were doing and have been trying it on with opportunistic complaints.

Don't really get that one dunstonh - how do you know they knew the risks. Just because someone's case is not upheld it does not mean they knew the risks. Perhaps they were unlucky enough to deal with one of your 'dodgy' claims companies and had it thrown out on that basis.

Why should the assumption be that she is telling the truth? There are far too many people trying it on or have selective memories which are sudden perfect recollection in all the areas that suit them but cannot recall things which would work against them.

For the reasons I have already given and why is this person - who apparently knows exactly what she bought - bringing her case so late in the day and asking for the advice of her sister and this site?

treliac

Mayb, thank you for your kind thoughts. I have read many of your posts over the past few months and admire your determination. I have been inspired by the generosity in sharing knowledge and information that you and some others on this site have shown.

I know that our case will probably take a long time to resolve but I am relieved that the company did not try and deny us the right to complain and that the Ombudsman service is now prepared to address it. Our mortgage goes back to what I believe is 'pre-regulation' and yet we have only learned, during the past year, about the scale of the mistreatment we received and so could not have acted before.

This has meant a huge extra financial burden to us throughout the past two decades. Even though we have now transferred to a repayment mortgage, we will continue to pay the cost of this - our monthly repayments being higher since it is concentrated into a much shorter term than it should have been. Our finances should have been getting easier by this stage in our lives but not so.

I believe I am right in thinking that ours was never a cheaper option, like a low cost endowment might have been. We were paying into a pension policy that we can't access and don't want (have frozen now anyway) and into two life insurance policies that were linked to the pension mortgage too. We didn't take all this on to save money but simply because we accepted the advice that it would be so much more suitable for meeting our mortgage needs.

It's all very complex and has been difficult and time consuming to unravel. There are other aspects that I haven't gone into on this site which complicate things still further. I'm not even entirely sure we have now fully uncovered the extent to which we have been disadvantaged.

I am just hoping that in time we might get the redress I believe we are due and back onto the financial track we should be on. I am certainly now prepared to fight this as far and for as long as is necessary. I won't be put off by the lengthy and involved forms that keep coming through the door to be completed, even though I seem to keep having to supply the same information!

treliac

In reply to your points Lady-Jane, as far as I know the 25% only, in a lump sum, is standard to pension plans / pension mortgages. If this is news to you, as it was to us last year, it just goes to support my theory that there are many more people out there still oblivious to their predicament.

Fortunately, we have still got a lot of the original documentation too, which the insurance company don't realise and would probably rather we didn't still have. And yes, much of the paperwork we have had not been understood at all. We have worked hard to get our heads round as much as possible and, I will concede, should probably have done all this years ago. Again, we had implicit faith in the advice we were given by the representative of a large, well known company. It was before the days of internet and easy access to information that we have today; although I don't know whether that would have helped. We were young and gullible - however, it's easy to say that with the benefit of hindsight and maturity.

One other source of information and support (once we had explained the extent of our situation) has been The Pensions Advisory Service. They have been exceptionally helpful to us and have a helpline that you can ring on
0845 601 2923.

I agree with you that it would be wonderful if Martin and team could bring the issue of Pension Mortgages to greater prominence, highlighting the problems surrounding these and enlightening people about the possibility that they were mis-sold. I emailed them some time ago and they referred me to the forum, but I think that much more could be said to alert others.

As you said Lady-Jane, you were unaware of the 25% rule. How long does your retirement plan run on for before you can access your funds? Is it longer that the 25 years you would no doubt have taken a repayment mortgage for? Does it extend past your anticipated date of retirement? If so you will be paying interest on the mortgage loan for all this time, maybe even after you have stopped earning an income. These are some of the factors that were not highlighted to us in the selling process but that have become apparent since we scrutinised the paperwork.

treliac

mayb_2

Thank you teliac I appreciate your comments and congratulate you on your determination - you will probably need it. My husband and I are in a very similar situation to you and are now struggling to pay an increased mortgage and find a way of saving for our retirement. I do get cross when people try to set aside the issues that we face and to pretend that this sort of thing was not the norm at the time.

Something is tickling the back of my mind that there were different rules when it came to missold pensions, particularly if you were expected to be paying these after your retirement date. I thought these were virtualy automatically given redress - it might be worth you phoning the ombudsman or the FSA for advice even if you have not got that far yet.

treliac

Had we continued to rely on the pension mortgage, we would have been paying into it, along with full interest on the mortgage loan, until I was almost 70 and then what a shock when we realised this and how little there would have been to repay the mortgage loan, it doesn't bear thinking about.

The FOS say they are looking into our complaint and keep sending us loads of forms to fill in. They have twice got our complaint mixed up with an endowment complaint (and sent us the wrong forms) which doesn't inspire us a great deal. They don't seem able to say much else at this stage, seems we have to wait until it gets to an adjudicator.

The most helpful conversation we have had has been with TPAS, who seemed to get a good grip of our situation and explained some points that had eluded us previously. Their belief in our case has helped.

What is left of the pension will probably be of little significance at all. Fortunately, we are both in company schemes that we will be relying on for retirement. I am hoping that we may be able to get the pension mortgage plan rescinded altogether as I have heard this is sometimes possible.

Pension mortgages are so clearly different from endowments, I am still hopeful that Martin might be able to give them more publicity.

Mayb, I am sorry that you have had such a hard time. Have you explored all possibilities now?

treliac