Act now on mis-sold endowments: new article

mayb_2

The Which site is a good one so perhaps worth trying again JVA. I doubt if you are alone in not understanding your rights regarding claiming on a missold endowment mortgage. If you leave it too long to claim then unfortunately you can be time barred. However, 6 months before the time runs out for doing this you should have had a letter telling you how long you had left to register a claim. If you really don't know then why not put in a claim and the company will soon let you know if they think they can time bar you - if it turns out to be too late then there appears to be nothing much you can do now. I expect you have taken steps to repay the difference some other way; by getting that part as a repayment mortgage for instance.

JVA

Thanks mayb. I'm just using the letter generator now.

mayb_2

Your welcome and good luck.

Wistful100

When I first bought a house in 1976 I could only get a mortgage by using a broker & having an endowment policy, due to being under 21 I was told.

In later life I stuck with this set up believing Endowments to be a method of paying off my debt and building up bonus' at the same time. No one ever told me otherwise, or suggested that an Endowment Policy could actually come up short of the actual debt, let alone not produce any extra. The only variable was the amount of 'extra' it would yield. I had no idea that the end result could be that the mortgage debt would not be covered. That first endowment matured a few years ago & paid out a paltry sum but I had had it reassigned to me so it was not connected to our mortgage by then. The holding company changed several times going from Crusader through Brittania to another two companies before it matured, the performance went down on each change of hands & it put on no growth at all over the last 6 years!! Abysmal performance & no come back at all for being 'sold out' as a customer.

Our main current endowment (we have two) was taken out in 1988 and then added to later when we moved house. If we had known that these policies might not cover what we needed at the maturity date, then we would have extended the cover to make sure it did, or bought a different product that would cover it. We certainly would not have risked the chance of having to sell our home in order to pay off the final debt, why would we? It makes the concept of the product ridiculous & on a par with betting, or playing the stock market, neither of which we would choose to do with our money & certainly not with our home. People who prefer to be 'safe' (like us) & do not have money to squander, would not have bought this product if companies had been totally honest about the potential down side at the point of sale, unless people could afford that higher risk or were prepared to pay a higher premium to factor out any potential loss.

We complained to the company about miss-selling & then took that complaint to the Financial Ombudsman right back at the start of all this in 2001. We still have all the projections of growth etc. for our current endowments & definitely knew that we were never told by the sales person that it might actually not perform to our required minimum. I know that categorically.................how? Because in one case I was that salesperson when I was working for Sun Alliance & it was never mentioned even in training!! :eek:

The Ombudsman gave his result in August 2001 & stated that we had no form of redress as the sale/purchase of our policies fell before the Financial Services Act came into effect!! :mad: If we had fully known that this type of policy could under perform & come up short of the target then we would have gone the repayment route as we didn't choose it for cheapness but because we believed it was the best option at the time & a good way of producing a lump sum saving at the end.

We continue to get red notices about the potential shortfall & as the companies are just trying to hold on rather than improve the situation for their clients means there is no real prospect of future growth or making up the shortfall. Our company is one of those with the worst pay outs so there is no real chance that the situation will improve with a bit of financial wizardry from the policy managers - fat chance!

Has anyone any ideas about any other avenues we could pursue or are we just totally stuffed?

dunstonh

When I first bought a house in 1976 I could only get a mortgage by using a broker & having an endowment policy

1976 was a good time to buy endowments. You got double MIRAS on the mortgage at the full amount and the policy benefited from LAPR tax relief. The monthly cost of your endomwent mortgage would have been a lot cheaper than a repayment mortgage. So, even if it didnt pay out much in the end you would have still be better off. At the time yours would have paid out, virtually no endowment had failed to hit target.

We complained to the company about miss-selling & then took that complaint to the Financial Ombudsman right back at the start of all this in 2001. We still have all the projections of growth etc. for our current endowments & definitely knew that we were never told by the sales person that it might actually not perform to our required minimum. I know that categorically.................how? Because in one case I was that salesperson when I was working for Sun Alliance & it was never mentioned even in training!! :eek:

So, despite knowing the risks you still chose to purchase and endowment and then fraudulently put in a complaint claiming you didnt know the risk.

The Ombudsman gave his result in August 2001 & stated that we had no form of redress as the sale/purchase of our policies fell before the Financial Services Act came into effect!! :mad:

The correct response. It would be wrong to be able to put in complaints about rules that were not in place until much later. Do we go back and prosecute smokers that smoked in pubs 5 years ago?

We continue to get red notices about the potential shortfall & as the companies are just trying to hold on rather than improve the situation for their clients means there is no real prospect of future growth or making up the shortfall. Our company is one of those with the worst pay outs so there is no real chance that the situation will improve with a bit of financial wizardry from the policy managers - fat chance!

So why are you holding on to it when you know its bad. Good endowments are worth keeping. Bad ones should be dumped. There is virtually no chance a bad endowment will come good. You just need to do a cost analysis and decide what the best option is.

Has anyone any ideas about any other avenues we could pursue or are we just totally stuffed?

You are stuffed. Its pre-regulation so end of road. You should only be satisified that the economic cycle and regulatory changes that occured have made you far better off than had the old economic cycle remained in place that would have allowed endowments to hit target and pay surplus. I know its hard to see that when there is a shortfall but for most people, they are better off.

Wistful100

Thank you for your responses to my scenario, except the one where you infer that I was fraudulent. I was not!
I was blissfully unaware of the risks of this type of policy & believed (right up until this revelation began about shortfalls) that there was a minimum guaranteed (i.e. the amount required to cover the mortgage repayment) with just the amount of the additional 'bonus' being variable. The point I tried (& obviously failed) to make, is that as Rep for a large Insurance Co. I was not made aware of the risks by the parent company/my manager (who actually sold it to me if you want to be pedantic) as I didn't sell these type of policies to the public myself at that time, although my name appears on the docs. You had to be a long serving rep to get those sort of jobs,& I was just a rookie, but they didn't even cover the full story & possible shortcomings of this type of policy for their own reps. I didn't stay with them for more than 6 months as I didn't like the company approach/ethic, so I didn't ever sell this type of policy to anyone else (thank goodness).

I also think that in cases like mine, where I was already in possession of an endowment policy, that a certain amount of 'knowledge' was taken for granted even though I was only 19 when I was originally sold it. If you already had an endowment the obvious option would seem to be to take out another to extend the cover, with no one actually checking whether it was the best option, or fully understood, as with our top-up policy when we moved house. I also discovered that a savings policy I had taken out at the age of 16 through our local Co-Op rep was in fact a 25 year term policy - sold to a teenager!!! I converted it to a 10 year with profits when I found out. So you can see why I don't really have much faith in the system as I have seen that it was seriously flawed at first hand - the reason why the Financial Services Act was required in the first place to regulate reps/companies that were not acting professionally or ethically.

We have kept the policy because we are in too far to dump it, with only a few years left to run. The inbuilt life policy would probably cost nearly as much to replace with another one & there would be no return at all rather than just a shortfall. However it doesn't help to know that there will be a large gap we will have to plug somehow and the top-up policy will also come up short plus finishes after my husbands retirement age! We started our own business about 4 years ago, when my husband should be happily retired, to try to ensure that we don't have to sell our home at the end of all this I just hope our work ethic is superior to the ones we encountered in the insurance industry & that by working hard 7 days a week plus unsociable hours we will end up with something left over for our hard work as well as keep our home!

Radarjet

I have come into contact with EMC Advisory services who have suggested that I may have a case for some compensation for my 3 endowment policies.

There was a huge speil but the gist of it was they take 35% plus VAT of any compensation on a no win no fee basis.

I fully appreciate that giving them that amount is a total waste of money in itself, but I just wanted to know whether that is the 'going rate' for a no win no fees advisory service or whether there are better ones around.

I'd not ever thought of claiming so I will do some reading up on here on how hard it is and then weigh up the time v hassle v amount equation.

Many thanks for your opinions

Radarjet

treliac

Radarjet wrote: »

I have come into contact with EMC Advisory services who have suggested that I may have a case for some compensation for my 3 endowment policies.

There was a huge speil but the gist of it was they take 35% plus VAT of any compensation on a no win no fee basis.

I fully appreciate that giving them that amount is a total waste of money in itself, but I just wanted to know whether that is the 'going rate' for a no win no fees advisory service or whether there are better ones around.

I'd not ever thought of claiming so I will do some reading up on here on how hard it is and then weigh up the time v hassle v amount equation.

Many thanks for your opinions

Radarjet

That sounds excessive by any standards. Avoid them like the plague.

You might like to look at http://www.libran-compensation.co.uk/ instead.

It is also possible to make your own claim. Some people advise following the advice on the Which website. There is also lots of information to be found that would assist you if you spend the time to look through this thread.

dunstonh

I have come into contact with EMC Advisory services who have suggested that I may have a case for some compensation for my 3 endowment policies.

There was a huge speil but the gist of it was they take 35% plus VAT of any compensation on a no win no fee basis.

Erm, you dont think they are going to tell you that you dont have a claim with a fee that high!

turbobob

Radarjet wrote: »

I have come into contact with EMC Advisory services who have suggested that I may have a case for some compensation for my 3 endowment policies.

There was a huge speil but the gist of it was they take 35% plus VAT of any compensation on a no win no fee basis.

I fully appreciate that giving them that amount is a total waste of money in itself, but I just wanted to know whether that is the 'going rate' for a no win no fees advisory service or whether there are better ones around.

I'd not ever thought of claiming so I will do some reading up on here on how hard it is and then weigh up the time v hassle v amount equation.

Many thanks for your opinions

Radarjet

Was it a cold call by any chance?

What your 35% (+VAT!) is paying for is for them to send a standard letter which lists common complaint points. You can download similar letters yourself. If the complaint is rejected, they refer it to the (free) Financial Ombudsman Service.

If your complaint is correctly time barred there is nothing you or they can do about it though.