Act now on mis-sold endowments: new article

mayb_2

I hope that you don't feel anyone would give you a hard time ericabro - the whole point of a missale is that the person purchasing the product hadn't a full understanding of it and I have had two such products sold to me. So I do know how you feel about all of this. After fighting a battle for two years over one product I at last began to feel I had exhausted all avenues and there was no point in wasting my life over it. That doesn't mean I am not still angry that these people keep getting away with it, it just means I accept that they have all the winning cards and the backing of big institutions and we do not. We also got out of our current account mortgage with RBS when it stopped working for us - if it ever did. It was the company's responsibility to do a fact find not yours so don't beat yourself up over that one. They are supposed to asses your attitude to risk before selling you a risky product. They obviously didn't do that as they have put their hands up to it - the responsibility rested with them.

If we were that clever we would be the ones selling these dodgy products I suppose. It is a political move for the City now to be scolded for the culture of risk taking banking, blamed for the current problems with the banks, mortgages and the slide in overall confidence in the banking system. One thing I have done now though is educate myself about my finances, read everything I can get my hands on and do put my money where it can work best for me and in things I understand. Good luck with all you do.

norapeggs

Hi,

This is my first post, sorry if its in the wrong place.

I was wondering if anyone could help me. I'm trying to find out if my parents can complain about being mis-sold an endowment. Neither of them are computer literate or really understand much about this. They got an endowment on May 1985 and were pretty much promised it would pay there mortgage and give them a large sum of money. There endowment finished and they paid of their mortgage but there was no large sum of money which they were promised. Can they still complain? Also they have no paper work to back any of this up. It seems they have had the endowment with Scottish Amicable. Do we write the letter to them or the prudential, which has now taken over?

ericabro

Hi All,
I have heard back from HBOS today saying that as this was looked at last year and they did offer the £72.?? and we refused it tough they are not prepared to do anything. so in affect we did ourselves out of the £72 I dont know how they can get away with this type of thing. one bite of the cherry it is
Thanks for all help and advise given
Erica

dunstonh

There endowment finished and they paid of their mortgage but there was no large sum of money which they were promised. Can they still complain?

No. Investment returns are not something you can complain about.

Also, when people are complaining, they are saying that they should have had a repayment mortgage instead of an endowment mortgage. Repayment mortgages dont have a surplus at the end so if the endowment cleared the mortgage and paid out even just 1p more then the endowment option was better. And thats ignoring the fact that the endowment option was usually cheaper than a repayment mortgage.

have heard back from HBOS today saying that as this was looked at last year and they did offer the £72.?? and we refused it tough they are not prepared to do anything. so in affect we did ourselves out of the £72 I dont know how they can get away with this type of thing. one bite of the cherry it is

You would expect them to give you the £72 but nothing else. I would get them to reissue the £72 cheque

mayb_2

Hi Norrapegs. It is not possible to claim for the difference between the mortgage and the amount you were promised as a return, unless you have this in writing. If you can find anything that your parents had amongst their paperwork that says this will be paid, then you can demand that from the company. If not then, like a lot of us, they were conned and there is nothing that can be done about it I am sorry to say. The reason many people did take out an endowment, was because they were told it would not only pay off the mortgage, but give them more money as well. I am sure that your parents probably don't realise that they could have been left with a shortfall in their mortgage too, so they have in fact been fairly lucky in that they were able to pay this off.

mayb_2

well ericabro I hope you have managed to keep your sense of humour while all this has been hapening to you - what sort of loss does £72 make to this company that they would be so mean as to refuse to pay it to you. You can almost feel sorry for the poor things. Mind you the mess they have made of things lately they are probably in desperate need.

Crazy_Saver

dunstonh wrote: »

Lets say the mortgage was £100k on interest only. If a repayment mortgage had been down it would be say £60k at the point of complaint. If the complaint is upheld then the endowment provider/adviser has to put the mortgage in that £60k position. The surrender value of the policy is used and if the surrender value is short of the required £40k then a redress payment is made. If the surrender value of the endomwent is £39,930 then the redress payment would be £70. If the surrender value was £41,000 then no redress is payable. Quite common nowadays with better unit linked plans.

Thanks for that dunstonh.

I can honestly say that is the first time I have undertood how the redress system works.

For the past 2 years I have tried to make sense of it but you have just put it so simply that I think I actually understand it now!!! :j


Crazy Saver

dunstonh

That is the simplified version. The cost of replacement life cover on a decreasing term assurance is taken into account as well but that is the fundamental aim.

With many endowments having a surrender penalty, the calculation must use the surrender value of the policy and not the current value. This is why I have often said that with small redress payments, the endowment could actually be in a surplus position because say the redress payment is £300 and the surrender penalty is £1000, that means the person is actually better off with their endowment mortgage at that point by £700.

anandp

anandp wrote: »

Thanks for the reply. It really does look as if I can't do anything as all of what you've said confirms what I've been told and what I've researched.

There is another avenue I am pursuing, which is connected. I took a further advance 10 years into my mortgage, and it got put down as a seperate sub-account, of the same mortgage.

I strongly believe a similar case exists for mis-selling here, but this time against the provider, not the agent (as the further advance was requested directly from Britannia). On these further advances, would Britannia have a responsibility to ensure I had adequate means to repay the additional funding?

Got quite a detailed letter from Britannia on this, rejecting the claim for mis-selling on the further advance. I'm not sure if i agree with the reasons though since they seem to be based on assumptions:

1) You came to us for the further advance for a conservatory, so I see it as your responsibility to ensure you have the means to pay for this.

2) This loan was taken out in 1995 - you have had plenty of time to come to us with this complaint, why was it not done sooner?

The actual letter contains more arguments like the above 2, and the tone also seems quite strongly negative.

Can those with more experience on these boards give me some advice on how to proceed?

dunstonh

Can those with more experience on these boards give me some advice on how to proceed?

Are they rejecting the complaint because you have timed out? or are they just answering specific questions that you gave and using a different reason for rejection?