Act now on mis-sold endowments: new article

mayb_2

Retired IFA you sound like my husband - he now has a leather chair and hopefully he will not set the house on fire, but he has someone to keep an eye on him. He has always rolled his own ciggarettes so I have him to thank that I never became a smoker myself - just don't think that rollys would have given me an air of sophistication somehow. I do recognise how hard it is to give up the habits of a life time though and smoking standing up is a bit like smoking out in the cold - it is a little bit nearer to not wanting to do it at all.

Perhaps next year's resolution could be that you will only smoke standing up and outside. You might not have a choice if you end up losing your house because of poor investments by your pension holding company!

mandy01

treliac

We still have paperwork/scribblings that state that the endowment will reach a specific target figure and beyond and even though we do not have a mortgage i still wanted to claim in regards to that it appears that it will not reach its target, will I still have grounds to do this? also becuase of the scribblings I am hoping that I can also claim that it showed there would be no risks, so basically we are claiming on 2 counts

1. Did not reach the target it stated (irrelevant of the fact we no longer have a mortgage we still expected a specific return))

2. The risks - It was never indicated that the investment could loose money ie no risk.

Thanks

mandy

mayb_2

Mandy01 you cannot claim that an investment didn't perform as expected because that indicates you knew there was a risk and understood the need for your policy to perform a certain way to meet its target amount.

If you were sold an endowment and didn't know that this constituted a risk, then you were missold as this should have been made very clear to you at the point of sale. Did you take this out originally as a mortgage endowment or was it a separate policy for other ends? If it was a mortgage endowment at outset it would be expected to at least cover the amount of your mortgage at the time.

It is easier to make a case for this than for other forms of endowment, where no target amount is put on paper. Your scribblings could prove invaluable if you can show that they link to your purchase and expected return was shown.

mandy01

Mayb

It was originally taken out to pay off a mortgage ( a homemaker polcy) and the target amount was based on the amount that would be needed to pay off the mortgage that I was paying at the time (in 1992) plus extra. At the time I was in the RAF and could afford the payments -The agent basically sold me the policy making out that it would meet the final mortgage repayment and some. The scribblings that I have show hand drawn tables that span the years and show nothing but the funds going up each year and the the agent never indicated that there would be a shortfall to the amount calcuated at the end of the maturity date. My worry is that because I no longer have a mortgage to pay off it will be seen as less of a case.

some of the questions in their questionnaire are:-

what age do you expect to retire at the time the endowment was taken and what age to you expect to reture now, but refer to self and partner

and ask had you or your partner ever previously owned a property either jointly or separetly

It goes on to ask what plans did you have for repaying your morgage in retirement? should I say that I expected my endowment to cover that?

there are quite a few questions where they make reference to self and partner - Should I be declaring information relating to my now partner ( we are not married) as it had/has nothing to do with the policy at the time?

As I am a complete novice at this I am just wary that I do not want to be disclosing any info that they should not be requesting therfore effecting my claim.

Thanks mandy

mayb_2

I think you should answer the questions based on what happened at the time. If you took out a mortgage with the plan that the endowment would pay off your mortgage than obviously you should say so. If you had no idea that it might not give you enough to pay off the mortgage at the end of term, then it was missold to you as that should have been made clear at the point of sale. There is nothing you can do about the surplus, unless you have something in writing promising a certain return and I don't think the scribbles will help you there.

If you took out a joint policy at the time and were still with that partner, then the questions would be relevant, but I can't see how actions you took then have any relevance to your current partner. It should give an idea of your attitude to risk at the time you entered into the contract and I would put 'not applicable' or N/A in the partner box if I were you. You could attach a note relating to the partner you had at the time if it was a joint mortgage - saying that you are no longer with this person and so cannot give any information relating to them and their retirement plans etc.

It is all about assessing your attitude to risk and it should be looking at what that was at the time of purchase.

Don't forget you cannot claim a missale if you understood the risk, but just wanted to claim because it hadn't reached the proposed target. They will be looking for evidence of your attitude to such financial risk.

Good luck with it anyway.

treliac

Two other things occur to me mandy:-

Did you have the endowment jointly with a previous partner? If so, I don't know whether they would have to be involved with your claim now but presume they would have an interest. Perhaps one of the better informed contributors might be able to help here. I'm sure that your present partner has no bearing on anything though.

The question about retirement - was the endowment set to finish before you reached retirement? If not, there could be an issue relating to mis-sale in respect of how you might have been considered able to pay into it after retirement. Again, I think retirement is only relevant if having the endowment changes anything, such as forces you to work longer than you would have originally intended.

On the whole, just think of what the questions are trying to ascertain and answer as best you can. If there are some points you can't remember, say so, but remember if there is too much you can't remember, it might cast doubt on your complaint in general.

I'm sure I will be corrected if wrong, but I think your complaint has to be about how you have lost out financially as a result of being missold and therefore about the redress due to you.

treliac

mayb_2

When my husband and I made a complaint about a pension savings plan, we could prove we had taken this out at the same time as we cancelled my pension policy with the same company - the company agreed that this had happened on the same day. We also had the fact find which recorded the fact that we intended for me to retire at the same time as my husband and he would be 55. It attempted to say we had experience of risk taking as we had endowment policies for our children -we thought of these as savings plans - £1 per month and then £10 per month - we were heavy gamblers you see. Then there were the other policy numbers which were thrown in to make it look as if we had more of these. One didn't exist at all and the other was a frozen personal pension my husband had when he was self employed. So, although we didn't lie there were lies involved.

However, the Ombudsman could not see a connection between these facts and the purchase of our endowment policy. So, if I was being really cynical I would say - say whatever you like and the Ombudsman will toss a coin to see whether or not you are today's winner of redress. My husband is now 55 and I am 53 - we will have to work for at least another 10 years to pay off our mortgage - another failed endowment policy - we long ago said goodbye to a pension. So dunstonh, we at least hope that the property market wont fail us, as we will have to sell our house and buy a cheaper one in order to have a pension.

So I wish you luck in your endeavour and hope that things have changed somewhat on the Ombudsman front - stick to the truth because it wont make a lot of difference, but at least you can keep your integrity. If you are really lucky the company will acknowledge the missale and pay out without an argument - some do and I think we should publish a list of these along with one that names and shames those that don't. The number of claims with the Ombudsman service would indicate that one of these lists would be very long.

Don't mind me but it is another Monday morning tomorrow and we thought we would be retired now - that sort of brings it home to you in real life terms, we were diddled and it suits people in high places to pretend that that didn't happen.

treliac

mayb

I wonder if you have read full-time-mum's posts. Looks as if she has been through a similar experience as yours in terms of the risk issue :

http://forums.moneysavingexpert.com/showpost.html?p=3803626&postcount=1

(Excuse me taking the liberty )

angie12

Hi.

We took an endowment mortgage out in 1988 with Bradford and Bingley. It was only for £9,000. to cut a long story short, we cashed in the endowment in 2002 because out interest only payments had risen to over a 100 a month,and we had been advised to raise the endowment by £10 a month so, we got rid of the lot and re- mortgaged too.
I read this site and even though it looked like I was timed-out, i sent off the template letter for mis-selling in November 07.
B&B answered within the week. Then, they rang us up and asked a few questions and within the month we recieved a letter offering us £1,200.
It was a great result and made our Xmas. It's never too late to try.
Angie.

mayb_2

Thanks for link the treliac - it is a shame to read that someone else has to go through the same experience we did, but it does reinforce my view in the end that it wouldn't really have mattered what we said - the Ombudsman is basically too busy to read and digest individual claims and probably barely reads the letters we spend hours creating. In the end if he can say they went through the process correctly when looking at our case that is all they have to say. They pay lip service to the idea of a fair hearing of your case and probably are less interested the more complex it looks like becoming.

We look as if we know what we are talking about ergo we always new what we were talking about and can't fool the Ombudsman into believing we didn't know enough about it to understand what we were getting into! So stuffed on all fronts basically - if we couldn't make a case we wouldn't have a case and because we can make a case we can't have a case I think sums it up.

Now there is even more pressure on the Ombudsman service, created by a need to limit the possible future damage to finance companies, there is probably even less chance of individual cases being looked into in any great depth. Move them in and shift them out - what cowboy series was that?

It would appear to me that your best hope is to have the company concerned accept responsibility in the first place - as did actually happen to us when we claimed about our mortgage endowment. So it is really good news from angie 12 and congratulations to Bradford and Bingley for paying out without making a drama of it.