Act now on mis-sold endowments: new article

dunstonh

My question is does this offer seem fair and could I ask the company for an immediate cash alternative? What is likely to be best for me?

It seems fair considering its only 19 months away from maturity. Indeed, a £5500 shortfall at 4% may end up in surplus.

Endowments are typically cheaper than repayment mortgages. Plus you had Miras and potentially double miras for a long period. So you are probably quite a bit better off having done an endowment. So, to get a guarantee that they will meet any shortfall seems fair enough. Ideally, that would have been the best option from the start for all providers of upheld complaints but it wasnt.

You could refuse and go to the FOS and wait 3-12 months for an outcome which may result in no redress payable because you are better off. It could also yield more but we dont have the data to say (better endowment would pay out less redress than a bad one at this stage. It may not even pay a penny).

Its probably a judgement call based on the quality of the endowment.

Also, they have given me the option of taking my complaint to the FOS but in dunstonh's last post he seems to indicate that I could not do that in view of the start date of the endowment.

The previous post refers to a company that no longer exists. The FOS will not review complaints of companies that no longer exist. That falls to the FSCS and they only take on complaints for sales after Aug 88. Your circumstances are different.

treliac

There are people much better informed than me who may answer you but, as I understand it, 1986 was pre-regulation and if you bought on the advice of the company's own adviser you can still sometimes complain, which seems to be the case for you. In which case I think you could still go to the FOS. Did your company not send you any information or a cut off date by which to do so?

multiman

Many thanks for the prompt responses.

On balance I think I'll sign on the dotted line and accept!

gardening_diva

mayb wrote: »

http://www.exasoft.biz/homepages/home.asp

The above is a link to the calculator for endowment compensation as recommended on the Which site. It probably costs £50 to use this but it might be well worth it to ensure you don't lose a lot more.

Good Luck!

Bearing in mind that the FOS have refused to calculate our due compensation, saying "it is not the role of the [FOS] to perform redress calculations..." I was surprised to see this in one of their newsletters (http://www.financial-ombudsman.org.uk/publications/ombudsman-news/5/mortgage-may.htm)

"We have bought a licence to use software designed for this purpose, called Mortgage Fundamentals, produced by Exasoft Limited. Mortgage Fundamentals contains information from most of the major UK mortgage lenders about the historic interest rates they have charged and the account operating procedures they have used, up to the present day. It also incorporates the other features mentioned above and enables us to calculate easily, and with a good degree of accuracy, the actual capital and outgoings losses and gains for each complaint".

Are we being given the run-around by the FOS?

treliac

Are we being given the run-around by the FOS?

Would appear to compound the suspicions of quite a few of us. How can they rule on whether your case has been dealt with fairly if they don't do calculation? This is the crux of the complaint we are taking to them.

Seems a contradiction here!

dreamylittledream

multiman wrote: »

I am confused!

I took out an endowment mortgage in 1986 and have recently complained to the company concerned that I was missold the endowment. The latest policy projection is for a shortfall of £5500 (at 4%). The policy has only 19 months to run to maturity. The company have upheld my complaint and offered me something called an indemnity certificate whereby they promise to pay the difference between the target figure to pay off the mortgage (£30k) and the eventual proceeds of the policy. I have to continue paying into the policy to qualify for this.

I have not seen this option being mentioned by other successful complainants who seem to have been offered immediate cash compensation.

My question is does this offer seem fair and could I ask the company for an immediate cash alternative? What is likely to be best for me? Also, they have given me the option of taking my complaint to the FOS but in dunstonh's last post he seems to indicate that I could not do that in view of the start date of the endowment.

Any comments gratefully received

You've had what is known as a contractual guarnatee upheld. In very general terms this is probably the best outcome from any complaint situation and as a result I'd probably accept it.

You are entitled to ask for any loss on costs you have suffered as well - this is unusual given endowments are usually cheaper than repayment mortgage but not unheard of. Worth asking if they will undertake such a loss calculation at maturity also.

The FOS view on this form of redress is whilst it does not follow their normal approach, its viewed to be a fair and reasonable approach - so you'll probably not get much joy in a appeal...

dreamylittledream

gardening_diva wrote: »

Bearing in mind that the FOS have refused to calculate our due compensation, saying "it is not the role of the [FOS] to perform redress calculations..." I was surprised to see this in one of their newsletters (http://www.financial-ombudsman.org.uk/publications/ombudsman-news/5/mortgage-may.htm)

"We have bought a licence to use software designed for this purpose, called Mortgage Fundamentals, produced by Exasoft Limited. Mortgage Fundamentals contains information from most of the major UK mortgage lenders about the historic interest rates they have charged and the account operating procedures they have used, up to the present day. It also incorporates the other features mentioned above and enables us to calculate easily, and with a good degree of accuracy, the actual capital and outgoings losses and gains for each complaint".

Are we being given the run-around by the FOS?

Okay the FOS and MF (mortgage fundamentals) is an interesting one.

It is not the FOS's job to check that redress calc has been input correctly, although they do indeed have the facility. MF is the usual method of completing a redress calculation (RU89) but it is not the only method. This is one reason why they steer very carefully around making recommendations on redress calculations. The FOS largely makes decision on whether to recommend complaints are upheld or rejected and methodology to be used. They are reluctant to be drawn into the varying methods of actually calculating them. Which to be honest is a bit silly as an MF calc can easily be checked by looking at the input and output print outs.

Relatively few staff at the FOS have either access to MF or an understanding of how it operates. If you want to challange a calculation therefore you need to understand exactly what might have been done wrongly and then keep pushing until you reach an senior adjudictor who does understand MF in depth (they do have a few!)

As such you options are employ someone to check the calc and challange it for you or attempt it yourself (exasoft's website has a web based version, but you do need to know what you are doing). Something to bear in mind however, is the vast majority of redress calculations are completed correctly. Therefore employing a third party may not assist you in increasing redress, if the calc was correct to start with (which is quite likely, but by no means certain, to be the case).

multiman

Thanks Dreamy, but who said anything about Standard Life?

dreamylittledream

multiman wrote: »

Thanks Dreamy, but who said anything about Standard Life?

Sorry...seem to have imagined that you put Standard Life in your original comment.

In my defence it was late last night when I replied.

Replace my reference to SL with whichever company has upheld your complaint...

Crazy_Saver

multiman wrote: »

I am confused!

The company have upheld my complaint and offered me something called an indemnity certificate whereby they promise to pay the difference between the target figure to pay off the mortgage (£30k) and the eventual proceeds of the policy. I have to continue paying into the policy to qualify for this.

I have not seen this option being mentioned by other successful complainants who seem to have been offered immediate cash compensation.

Any comments gratefully received

Wow multiman!

Wish I'd been offered that!

Our latest projection letter showed a £33,500 shortfall. I would have jumped at an offer like yours instead of having the ongoing battle I'm currently in with the FOS.

If we do ever get any redress, I'm sure it will be nothing like the £33+K shortfall that we have had to deal with.

Please don't think I am trying to tell you what to do, I'm just expressing my jealousy;)

Good luck

Crazy Saver