Act now on mis-sold endowments: new article

dunstonh

ps -I hope im posting in the correct location or should i have started a new thread

it is often worth starting a new thread for your issue as big threads like this get multiple questions asked and it can be a bit hard to follow after a while. However, you have asked so lets give it a go.

Scottish life is unable to assist and that according to thier records L&B Mellor insurance brokers were acting as my finacial adviser and a re independent of Scottish life...
...Mellors are an estate agents that sold the house. Ive never had a finacial adviser. They say i have to take this up with them. I do not think they even exist now - 20 years later.

The policy was not sold by a Scottish Life representative. So Scottish Life have no liability for any complaint you may have. Your complaint lies with Mellors who sold the policy.

also the estate agent had a halifax service counter etc and one man sorted our mortgage and endownment - How the heck am i to know who employed him - he worked for all of them.

He worked at Mellors where you bought the policy. They were agents for Halifax but thats irrelevant. Who the business was placed with doesnt matter either. Its where you bought it that matters. Say you bought a tin of beans from Tesco and Tesco did something wrong, do you complain to Heinz or Tesco. Same principle applies here. You are complaining about how it was sold. Therefore its the retailer or the product and that is Mellors.

in 1988 a finacial adviser wasnt even a title used so what the heck are they going on about? Not sure if L Mellors estate agents even exists now

Financial advisers existed before 1988. However, 1988 saw the introduction of IFAs. It was just the title and regulatory standards that changed that year. Before then you had accountants, solicitors and even members of the public with agencies with insurers able to sell products.

You should place your complaint to Mellors. However there are a couple of dates you need to be aware of. If you signed the application for the endowment before 29th April 1988 then the company can reject your complaint because its pre-regulation. If the company is no longer in business and you signed the application before 28th August 1988 then you have no consumer protection (as that didnt come in until august that year).

mayb_2

My shortfall was over £25000 too - it was growing over the year that we paid extra as advised to do to get over this - we certainly weren't far in to it either and so it would have been more than that if taken to the end of the term.

AbbieCadabra

AbbieCadabra wrote: »

i have to admit that i'm another that has been a bit blinkered on this subject , but i have finally got around to my complaint letter today (as per the Which site).

£24,500 endowment in 1991 & we re-mortaged in 1998 - we kept the original endowment part & the 'new' bit was on a repayment basis to coincide with the end date of the endowment, due 2016.

we took out a fixed rate deal a few years ago & increased the amount on repayment by £7,000 as we'd had letters about the shortfall on the endowment.

i can't find any current info for the adviser that sold us the endowment, he was getting on in years, so just assumed we wouldn't be able to do anything...

we were very niave about financial 'stuff' back then & just took his friendly word for it that the mortgage would be paid AND we'd have something extra at the end too :rolleyes:

oh well, it's at least worth a letter to get the ball rolling - they can only say NO can't they!

we've had a reply from the Pru today, offered us just over £1000, which i'm pleased & surprised with as i was pretty sure we wouldn't get anything :T

Farnesy

Hi

I work for a firm of IFAs' and we have been on the receiving end of endowment complaints and may I also point out that we are a reputable firm that has been in business now for 25 years.

I'd just like to add, whilst I don't know your individual circumstances , it is becoming more and more difficult to prove that an endowment was mis-sold due to the so called experts in endowment complaints. We have had ten in total and each letter has been identical to the last as clients are given the script. The latest we had was from an endowment claims company on behalf of a client. We gave them our response which included copies of all correspondence stating the warnings that the policy may not repay the mortgage at the end of the term and the client information sheet signed by the claimants, and they had no comeback. The bottom line is that IFAs' and indeed the Financial Ombudsman are wising up to the fact that the majority of mis-selling claims are simply not.

The problem is that when endowment mortgages were popular, the markets were at a high and equity based investments such as With Profits were showing returns at the time as high as 12% per annum. This is however what is known as a 'high projection' and when we sold endowments we used an 'intermediate projection' of between 7% and 9%. And indeed, when advisers' told clients that the mortgage would be repaid with a lump sum at the end of the term, this was the case and both advisers' and the FSA will say that you cannot apply the investment climate of 20 years ago to today and complaints on that basis will not stand.

My advice would be to stand any chance of being successful with a legitimate claim would be to try and handle this yourself. Set out your initial complaint yourself, based loosely on a pro-forma complaint letter. Also, be aware of time bar rules.

Since June 2004, the policy providers (insurers) have been required to set out a final date for policyholders. If you do not complain to the firm by this date, the firm can object to the Ombudsman considering the complaint.

This new rule sets the time limit at three years from the insurers first warning to you (in what has become known in the industry as a ‘red’ letter) about the high risk of a shortfall, provided that you have also received – within the three-year period and at least six months before the final date – an explanation that the time limit will expire at the final date. This new rule applies only to cases that were not already out of time on 31 May 2004.

My final piece of advice, if you suspect or are fully aware that you have not been mis-sold your endowment but simply want to complain in the hope that you might get some money back, don't bother. The FO and most advisers have had allsorts of tactics thrown at them and are now wise to them, and they will sniff out a bogus complaint withing seconds. Your time and energy would be best spent trying to find a repayment vehicle for any shortfall that you may have.

Farnesy

dunstonh

I hope you have your flame jacket on Farnesy

The bottom line is that IFAs' and indeed the Financial Ombudsman are wising up to the fact that the majority of mis-selling claims are simply not.

The FOS have basically confirmed that in various articles. The Hunt report had a bit on it as well. The person in charge of the pension review also admitted that the review for that was too biased in favour of the consumer and that payouts were made which shouldnt have been.

Our complaints team (network) have said they automatically go on guard when they get certain template letters. Especially when the list of complaints includes things which are not valid (e.g. going past retirement listed but endowment matures when they are 48). Certain claims companies are treated as hostile as well on the assumption that the complaint is spurious (due to knowledge that they almost certainly are fraudulent attempts). Letters written in a personal style are treated far less sceptically.

It's a shame because these "try it on as nothing to lose" people are abusing a system which does have a slight bias to the consumer and making it harder for the genuine people with valid complaints. Firms, the ombudsman and even the regulator seem to acknowledge this with the FSA stating in the last RDR information that certain groups of advisers and transactions may have the ability to complain to the FOS removed from them.

Farnesy

dunstonh, my jacket is at the ready

I must add that we as a firm do treat each complaint that comes through our doors fairly and a comprehensive report is compiled from the records that we hold and a decision is made based on the information held on file, and not how or where the complaint has arisen.

Totally agree with your comments on endowment claims companies damaging legitimate claims - I cringe when I see the adverts on TV or on the net.

I will await the fall out.

dunstonh

I must add that we as a firm do treat each complaint that comes through our doors fairly and a comprehensive report is compiled from the records that we hold and a decision is made based on the information held on file, and not how or where the complaint has arisen.

I wasnt suggesting you didnt and I am not saying my networks team doesnt. They just said that they can tell when a complaint comes in more often than not if it is a try it on compliant or not and that they will perhaps look more closely at certain complaints if they have come from certain sources. Perhaps not giving as much benefit of doubt in grey areas as they may on other cases. Its daft really that these template letters exist because regardless of what you put in them as the reason, the file has to be reviewed from all angles even if it isnt something listed in the complaint letter.

One complaint example given to us was from a claims company where had the claims company had written in pencil on the FOS forms how the individual should respond (expecting the individual to rub it out). When clarification on a few points was asked of the individual on some conflicting information, he responded that she didnt know but was told to say that by the claims company.

One complaint came in and whilst not upheld, redress was payable due to insufficient data (client file was missing IIRC). The calculation was done and 96p redress was payable. The claims company had a minimum charge of £1000 when redress was paid. They came after the person for the £1000 and they phoned the complaints team saying the IFA should pay it. Of course that doesnt happen and when told that she admitted that the complaint was only put in because the complaints company told her she could get thousands of pounds. The reasons given were made up.

There are plenty more like that as well.

Farnesy

Oh the joy of the written word!!

It's OK, I know you weren't intimating that we don't treat our clients fairly however reading it back it does sound like that. It was just a generic comment on the back of my first post as I didn't want to give the impression that we treat all complaints with scepticism, that's all.

I do feel sorry for the claimants that get sucked in by these firms and are promised the world when in reality they may end up with nothing but a wasted six months.

On a different topic, we once had a client come to us with a mortgage that had been arranged by another advisor (totally unsuitable for her) and she gave us a copy of the original app which included a letter from the previous broker where they had clearly added a '0' to her basic salary, by hand, to get the app approved! Now that is unscrupulous!

We received an endowment complaint from a now retired director's sister in law. She owned a wool shop that went under and he rearranged their finances which meant they could keep their house, a slightly important point as they had children, and when the endowment produced a shortfall they brought about a complaint four years ago which was not upheld by the FOS. Needless to say they don't speak anymore!

Scaredy_Cat_3

I get so frustrated when I read about (other) people being able to claim compensation if their endowment policy was mis-sold. Ours was most definitely mis-sold - we were told the monthly payments were very similar for a repayment or an endowment mortgage, but with the endowment we would get a bonus at the end, too. There was never any hint that it might not mature with sufficient funds to clear the mortgage.

We were sold a Scottish Amicable (now Prudential) policy by Halifax. They have dismissed my claim because I don't have written proof that we were not warned there might be a shortfall. I went to the ombudsman and they don't want to know either. I can't believe so many other people are getting compensation and yet no-one will entertain my complaint. I don't know what I did wrong - I have a very clear recollection of the conversation when we were sold the policy, and all we were told was the benefits of the bonus amount at the end.

We were sold the policy in Feb 1988, and I understand the Financial Services Act came into force in April 1988, which means we weren't covered. It's just so upsetting - there is no way I would have taken an endowment if I'd been told the risks. Is there anything else I can do?

dunstonh

I can't believe so many other people are getting compensation and yet no-one will entertain my complaint.

They are not. Around one third of complaints result in redress and the majority of those are not because they were mis-sold but because documentation doesnt exist or isnt up to the required standard to justify the recommendation.

Is there anything else I can do?

Nope. Nothing reasonable. On the upside though, most Scot Am policies hit target and pay a surplus and you have had lower monthly payments compared to a repayment mortgage. So, its not all bad.