Act now on mis-sold endowments: new article

mayb_2

The whole idea of the introduction of the red letter system was that your rights to complain about a missale would be taken away from you if you did not act before the exclusion date. This has been accepted by the FSA because they like to help the financial institutions to avoid paying out on these if they can.

In the end you have nothing to lose by attempting to claim a missale at this point. As you don't have a mortgage attached to this it may be difficult for you to prove how much you were expecting the return to be. It sounds as if you had originaly taken this out to cover a mortgage - if so you can refer to that amount. Check out your paperwork. If you have a promised return in writing then you are on strong ground to make a claim for that amount.

If you say who the mortgage endowment was with, someone may be able to give an opinion on how it is likely to perform in the future but it cannot be guaranteed. However, you might decide to take the risk of continuing with this. If all else fails and you are not happy you could cash it in, so get a quote on how much you are likely to get if you were to do that before you write to make a claim. That may help you to decide what you want to do with this.

Good luck.

dunstonh

The whole idea of the introduction of the red letter system was that your rights to complain about a missale would be taken away from you if you did not act before the exclusion date. This has been accepted by the FSA because they like to help the financial institutions to avoid paying out on these if they can.

The idea was to reduce the amount of opportunistic complainers who knew about the risk but wanted to wait to see what was the best outcome for them. Remember that timebars also exist in law so its not an unusual or uncommon thing.

mayb_2

Think we have had that argument before dunstonh - a lot of people don't agree with that statement including me of course. You often tell people that their investments are not as bad as they appear to be because of the way that companies are forced to project them. Do you then think they are opportunistic to wait and see what is happening to them? They may still know that they were missold the product but the aim is to maximise the return they can get despite the fact that they know this. If you then tell them it is better not to cash this in it is still in the light of the fact they were missold.

You, therefore, can't have it both ways. A missale is a missale regardless of how the purchaser choses to handle the product he now knows is an investment subject to risk. He needs to calculate that risk and shouldn't be forced to take a decision which may later work against him. It should be possible for him to register that fact but still chose to hang on. It is not good for companies to lose all of the investors in such a product anyway.

In fact the timebar resulted in a lot of people being forced to act which has caused a backlog of claims and. of course, a higher number of claims from people who may have been better off not claiming but can't take that risk. This has not exactly worked in the way you describe. The Ombudsman service has had to employ more people to work on these claims and of course they are not likely to be experts in their field. No doubt tick boxes will be used to decide rather than a rational view of all the facts supplied.

learning_in_earnest

mayb wrote: »

In the end you have nothing to lose by attempting to claim a missale at this point. As you don't have a mortgage attached to this it may be difficult for you to prove how much you were expecting the return to be. It sounds as if you had originaly taken this out to cover a mortgage - if so you can refer to that amount. Check out your paperwork. If you have a promised return in writing then you are on strong ground to make a claim for that amount.

If you say who the mortgage endowment was with, someone may be able to give an opinion on how it is likely to perform in the future but it cannot be guaranteed. However, you might decide to take the risk of continuing with this. If all else fails and you are not happy you could cash it in, so get a quote on how much you are likely to get if you were to do that before you write to make a claim. That may help you to decide what you want to do with this.

Good luck.

So it's worth a try perhaps? I could kick myself for believing it didn't apply on the basis that it wasn't linked to a property I do have paperwork which states the amount it was to cover, though it obviously doesn't mention the 'doubled' amount he told ME about!

When I took the policy out it was with The Life Association of Scotland in Manchester, and was procecessed through the Estate Agents own mortgage adviser in Bolton. LAS have changed hands several times since - I think it is presently Alba Life.

All help appreciated!

turbobob

mayb wrote: »

Think we have had that argument before dunstonh - a lot of people don't agree with that statement including me of course. You often tell people that their investments are not as bad as they appear to be because of the way that companies are forced to project them. Do you then think they are opportunistic to wait and see what is happening to them? They may still know that they were missold the product but the aim is to maximise the return they can get despite the fact that they know this. If you then tell them it is better not to cash this in it is still in the light of the fact they were missold.

I tend to think that if a product is wrong then its wrong. If you were not prepared to take any risks (as most endowment complainants state) then why do you need to calculate whether it is in your best interests to hold off before complaining? By doing that you are actually defeating your own argument that you weren't prepared to take any risks!!

This might be overly simplistic, but my view is if you receive a letter with "There is a high risk that you will have a shortfall" plastered all over it, while you were genuinely under the impression that the policy was guaranteed to pay off your mortgage, the first thing most people would do is look to complain. And if the company then found in your favour and offered redress, you would then take the value of the policy and compensation and convert the remainder of the mortgage to repayment. This would immediately solve any risk of shortfall issue and guarantee that your mortgage would be repaid at the end of the term. That is the whole aim of offering redress on an endowment complaint.

mayb_2

I quite agree turbobob but a lot of water has passed under a lot of bridges since I cashed in my endowment mortgage and received redress. There is much more information out there about the alternatives and how these things work generally I didn't even understand that there were options such as starting a repayment mortgage and keeping the endowment. I certainly would not risk not paying my mortgage and as, you say as soon as I was aware of the risk I complained. How do I know that this may not have disadvantaged me in the long run - well I checked out the endowment with a IFA who told me it was a load of rubbish and get rid of it.

The point is that now people do understand the nature of the risk and the various options available for paying a mortgage and saving etc. That does not mean it wasn't missold to them at a time when such information wasn't available and it was not made clear to them that they were risking their financial future on this ploicy. If you have a product that was not only promising to pay your mortgage but also give you a lump sum at the end. It is not easy to take the decision to just pay a little bit of your mortgage with the redress and start paying a waking great repayment mortgage instead. It is worth taking the time to find out what you have got and the final possible outcome.

Personally I would never have a product now which was not guaranteed in some way. That is my decision - others may want to make their own decisions now they know the options. So in short turbobob I think your statement is overly simplistic but one I agree with personally, with the caveat that others should have the choice now they understand what those choices mean.

Of course it is not so easy to get a mortgage now is it and those trying to change to repayment at this time may find it is too expensive and may chose to want to wait for a better time to do it. Once again the greed of the financial industries has lead the public into a possible financial meltdown. Luckily the goverment is there to prevent them from suffering the consequences of their own actions - using tax payers money too.

defender_of_the_weak

The idea was to reduce the amount of opportunistic complainers who knew about the risk but wanted to wait to see what was the best outcome for them. Remember that timebars also exist in law so its not an unusual or uncommon thing.

The idea was to minimise the potential claims against the industry responsible for selling these policies incorrectly in the first place. Insurance companies and banks etc used all sorts of hokey time bars to get rid of claims in the early days. All the time bar did was put a legal line in the sand beyond which they could absolve themselves of responsibility. To the poster enquiring about having a go, don't waste your time, if the 3 years are up with ALBA then forget it and move on

treliac

I agree. These companies are all fine when it comes to getting hold of your money but many transactions have not been on an equal or fair basis and the sellers have definitely not wanted to accept their responsibilities to their 'customers,' without any doubt at all.

IMO it should not matter when an individual realises how they have been taken in and that they should be entitled to redress and certainly, if it is still a live issue and affecting their current financial position, if they are stuck with the product and/or are still suffering adverse consequences from having taken professional advice to buy it, then they should be entitled to the proper compensation for having been sold a product that was not fit for purpose.

vinno65

dunstonh wrote: »

It takes two to tango. You cannot keep blaming one side as being the only guilty party. You seem to think that if someone gets turned down by a bank that they will accept that decision and forget about buying. They dont. They keep looking and keep trying until they find someone that does lend them the money.

Someone else mentioned in another thread that the brokers that turn someone down are considered the bad guys and the broker that gets the mortgage even if it involves twisting the information is seen as the good guy by the consumer. In reality it is the opposite but you have too much faith in the consumer to accept a no decision.

Dunston you really do spout some nonsense. If the regulated financial services industry refused to give someone a 5-7 times salary mortgage,then the consumer would not get the loan. If they then went and robbed a bank or visited a loan shark then that is a different matter. What does a mortgage broker care what a customer thinks of him? Especially if the customer is one he shouldn't be touching with a barge pole anyway? And do you think mortgage brokers are obtaining mortgages by twisting information out of the kindness of their hearts because they feel sorry for the poor customer who can't get a mortgage? Are you now saying that mortgage brokers are being bullied by customers????

regards Vinno

vinno65

[quote=dunstonh;8922671
However, the middle net worth are expected to be worse off. If they see a Primary adviser, the product range is going to be more limited and not take account many of their needs. The mid net worth clients may not want to pay for advice explicitly (although with CAR that really shouldnt be a problem if correctly explained). The FSA have acknowledged this. Personally, I dont see it being an issue with the upper medium net worth clients as there will still be enough IFAs around to service them. The lower medium net worth are likely to be the big losers.[/quote]

That's assuming that all lower medium net worth people want to invest in these products. After what's been happening the past few years I would imagine most would be happier leaving their money under a mattress. It would be safer than leaving it in the hands of financial institutions!!!

regards Vinno