Act now on mis-sold endowments: new article

dunstonh

As I understand it dunstonh you are saying that the information given at the point of sale regarding performance bears no relation to the product or its likely future as an investment. I would read that as meaning every single sale is a missale then, as the person buying it has no information to go on at all.

Performance is an unknown factor. There are three example growth rates given. The warnings under those projections do state that they are just examples and you could get back more or less than those.

The FSA sets the projection rates (but does allow companies to use lower rates if they wish but not higher).

So, no mis-sale there as the information if factual to the point it can be.

So if they are sold it without being told - actually this could be a load of rubbish or a real gem and there is absolutely no way of knowing whether it will perform well or poorly - then they have been mislead and the product should never, ever be considered as a mortgage repayment vehicle to anyone not already heavily involved in these sorts of funds and totally in the loop.

Just because something is unknown, doesnt make it a mis-sale. Its the potential that matters but just because there is potential doenst mean it will actually happen.

If you think that those are mis-sales then most financial products and many retail products would be mis-sales as well.

mayb_2

Can't disagree with that last statement dunstonh - certainly reflects my experience of financial products to date. Now I know which questions to ask I don't buy anything without a guaranteed return or a fixed rate.

Regarding the unknown, it is a missale where people have no way of knowing the risk. As I have said they need to be already involved in the market to understand the scope of that. If most people had been told the truth about their endowments they would not have bought one for a mortgage for certain. How many are sold or even offered, now that the risk is known to most people - they just don't exist anymore as there is no longer a market for them - for very obvious reasons.

Wonder why nobody said 'just because there is potentioal doesn't mean it will actually happen' when describing the profit potential during the sales of endowment policies.

The FSA documented the increase in sales of endowment policies beyond the point where it was known they would not be able to meet their targets - particularly low cost endowments which didn't have a hope in hell's chance. That to my mind is a 'confidence trick' at best. The subprime market sales in America are being described as 'soft fraud' and so not illegal. There appears to be a set of rules for the finance industry that would not be tolerated anywhere else.

The finance industry will soon be able to wash its hands of its mistakes here, leaving countless people in real financial trouble owing to the bright idea of the time bar - something invented to save them from their sins- wonder who got paid the big bonus for that one.

dunstonh

it was known they would not be able to meet their targets - particularly low cost endowments which didn't have a hope in hell's chance.

That is incorrect. Low cost endowments do have very good chances of hitting target and many do. Its the target growth rate that matters and the ones you are referring to are the LAUTRO cases which are problematic. Not the product itself.

There appears to be a set of rules for the finance industry that would not be tolerated anywhere else.

you are correct. Other industries would have been able to wash their hands of it years ago with no liability.

mayb_2

Really dunstonh - I cannot say I can see another industry to compare this with - what are you referring to? Are you saying the finance industry should have been allowed to do that? It was a protection strategy imposed on the finance industry and was created as a damage limitation exercise and to maintain public confidence in the finance industry. You make it sound like a generous act of charity given freely by these people - tell that to those who are still fighting for their redress.

The law of the land applies to everyone.

The FSA oversee the finance industry and, as I mentioned before the subprime market is an example of the lack of control they exert over their domain. Even the government are not happy with the result of that and the lack of response from the FSA. (bit of buck passing there) The whole country has been hit by that one and it was seen coming for years - certainly by me and I am not involved in finance except as a 'hobby' now. It affected Spain before it arrived here - the Prime Minister never stops reminding people that we are not the only country with this problem - we ignored it until it was too late.

You and I had many discussions on other threads about the habit of giving mortgages at 5 and 7 times income and to people who could not afford them. As I recall you did not see a problem with that at that time. Now we are all paying the price for that lack of foresight on behalf of the finance sector, the lack of action by the FSA and the greed of the industry that was the driving force behind it.

Now it is said that mortgages were being sold by people who did not understand what they were doing. The sales people may be accused of that, but the institutions themselves are a different case entirely. The industry failed to look at the problem they were generating and it was all treated like a game of Old Maid - each one trying to make sure they didn't have the wrong card when the game was over. Now none of them know just how bad their situation is as they cannot know how many bad debts they are holding on to, after so much sleight of hand. The public has no confidence in this bunch of trixters anymore and it is not good news for the individual or the country.

I expect there will be another get out of jail free card presented to them in just the same way the time bar was handed out before for endowments. Northern Rock has already had one and the shame of that is it would have been the customers who paid the price if it hadn't. If a bank goes under and the customers are each protected up to £30000 - it is the tax payer who is footing the bill for that not the finance industry itself. So we are all paying for the same sort of mistakes that were made with the Endowment mortgage sales.

Who pays for the FSA and the Ombudsman service? I think you may find that the finance industry always washes its hands of its actions and tries its damdest to avoid its liability.

treliac

And aren't there areas of law where no time bar exists at all? It's all arbitrary and designed to protect the financial world. Sod people who were conned into taking a mortgage with no idea or discussion of the risks involved and who are now just left in an appalling financial situation.

We had no idea whatsoever of the dire effect this could possibly have on our family life when we took a pension mortgage dressed up as it was, to be such a wonderful opportunity, in 1986. Now we're having to fight tooth and nail to get back only the small proportion possible of the extra costs that we have had to find from our moderate level of pay. All the extra interest it's cost us is not even in the frame for redress.

mayb, with your capacity for understanding the issue of endowment fraud, you would be a great campaigner at a higher level than this forum?

mayb_2

Thank you treliac - I have never given up in the pursuit of some sort of justice in this area and taken my own cases as high as I could. You always have to face the fact in the end that money talks if you want justice - and I don't have any now - I gave it as a gift to the finance industry apparently.

This forum cannot achieve much more than to give support and advice to those yet to go through the hoops of reclaiming the money that you can. It will never be enough. but at least people should have what they can get in redress. There are those who begrudge even that small compensation for what amounts to a lot of people's only hope of avoiding poverty in retirement and possibly the loss of their homes when they have to sell to repay the mortgage. This must be becoming an even more likely scenario for some as the country heads into a finance industry created recession. The value of our houses will fall but the amount we owe in mortgage will not go down with it.

dunstonh

And aren't there areas of law where no time bar exists at all? It's all arbitrary and designed to protect the financial world.

How are time bars that exist in all the other areas (that have nothing to do with financial services) designed to protect the financial world?

turbobob

treliac wrote: »

And aren't there areas of law where no time bar exists at all?

Yes, things like murder have no time limits for prosecution as far as I'm aware. On the other hand for something like speeding they have a limit of 14 days from the date of the offence to serve a notice of intended prosecution, I believe.

treliac

dunstonh wrote: »

How are time bars that exist in all the other areas (that have nothing to do with financial services) designed to protect the financial world?

You tell me ? - that's exactly my point. Time bars are frequently arbitrary or designed for damage limitation rather than any concept of true justice.

mayb_2

True teliac - an honest 'broker' wouldn't need or want one.