Act now on mis-sold endowments: new article

Lordstrepsils

Ahh..very helpful, once again.

So to summarise what you're suggesting

a) in all likelihood the policy is time-barred and therefore any complaint or appeal would be pointless
b) even if it isn't time-barred, the likely compensation would be to void the policy and return all funds, which may be less than the payout of the policy if it were to be left.

So, just for my understanding, under what circumstances have other people here being able to get "£000's in compensation" (assuming their policy was not time-barred?

dunstonh

Lordstrepsils wrote: »

Ahh..very helpful, once again.

So to summarise what you're suggesting

a) in all likelihood the policy is time-barred and therefore any complaint or appeal would be pointless
b) even if it isn't time-barred, the likely compensation would be to void the policy and return all funds, which may be less than the payout of the policy if it were to be left.

So, just for my understanding, under what circumstances have other people here being able to get "£000's in compensation" (assuming their policy was not time-barred?

That is mainly it yes. Obviously if you find it isnt time barred then it does sound like a technical mis-sale and a complaint is likely to succeed.

The people posting £000s are either including the surrender value of policy in there (which distorts the real redress payment) or they are did it years ago when values were much lower. As the stockmarket recovered, the redress payments went down and figures on redress started to range from nothing to a hundreds rather than thousands. However, the recent drop on the markets could see it return to thousands again if the investment is equity based.

That said, the other reason there is a difference is that pre-sold endowments have a different calculation method to those that complain on the basis they should have been sold a repayment mortgage. Those complaints dont get the policy voided but a calculation that compares where they would be if they had a repayment mortgage and where they are with an interest only mortgage minus the surrender value of the endowment. That can lead to the strange result where a bad policy with a low/no surrender penalty can pay low/no redress compared to a good policy (which could hit target) but has a higer surrender penalty.

If they void the policy and the premiums plus interest and that value is say £3000 more than the surrender value then the redress payment is £3000. If the surrender value is more than the premiums refunded plus interest then you get the surrender value with no redress. Either way, you dont lose out. You just get an upheld complaint but no redress.

hypatia

I have been getting nowhere trying to find out where to direct a complaint. We bought our endowments in the 80s and were told in no uncertain terms that the basic sum was guaranteed but the great thing about endowments was that you also got a bonus. I wasn't convinced by the bonus promises - some seemed too good to be true- and we bought endowments from the then ''crusader insurance" company, whose claims seemed more modest but they did assure us the basic sum was covered (I asked this of all of them - the all gave the same answer). In 1993 when we moved again, endowments looked less good and so I phoned the company. They assured me that the endowments we had would pay at least the basic mortgage because they were taken out before 1986 but new policies might not. We then went for repayment on the new mortgage. Its only this last year that I realised this is not true.
the sales rep worked for the Crusader so presumably they were the sellers and they don't exist now (changed hands a dozen times). The solicitors may have had some commission but the advice came from the crusader chap.
The ICFS don't cover us because the policies predate 1988. I have all my basic paper work but don't know where to take a complaint.

Any suggestions?

I'm aware that time is running out but the bumph which came with the policy update simply talks about all complaints going tothe ombudsman - despite the policies being too old.

dunstonh

The ICFS don't cover us because the policies predate 1988.

You mean FSCS, but yes they wont cover pre Aug 1988 cases where the firm no longer exists or ceased to be PIA and later FSA authorised.

I have all my basic paper work but don't know where to take a complaint.

Any suggestions?

You cant. You bought it before regulation when there was no consumer protection. You cannot complain to the firm as they no longer exist, you cannot complain to the FOS as its pre regulation and you cannot complain to the FSCS as its before their remit. Its end of the road for you on this one.

whoopi_2

Hi,

I took up mt endowement in 1994 with MGM. I was advised to pay more than the standard monthly amount in order to avoid any shortfalls. I have now received my second amber alert letter indicating that my policy will have a shortfall. Bearing in mind i do have until 2019 should i be concerned?

turbobob

hypatia wrote: »

We bought our endowments in the 80s and were told in no uncertain terms that the basic sum was guaranteed but the great thing about endowments was that you also got a bonus. I wasn't convinced by the bonus promises - some seemed too good to be true- and we bought endowments from the then ''crusader insurance" company, whose claims seemed more modest but they did assure us the basic sum was covered (I asked this of all of them - the all gave the same answer).

If thats what they told you then it is right. The basic sum assured is guaranteed. However, on a low cost endowment policy the basic sum assured is not the same as the target amount/death benefit.

And just to add if you are certain the insurance company rep sold you the policy then you would direct the complaint to the insurer (probably Phoenix life) http://www.phoenixlifegroup.co.uk/phoenixlife/servicecompany.php

Most (if not all??) insurers, banks and building societies have voluntarily agreed to investigate complaints about pre 29 April 1988 sales. If the sale was made by an independent broker or the solicitor then you'd be out of luck. If their records show the solicitors received commission for the sale then you would need to convince them that it was one of their reps that gave the advice.

paulmc18

Morning, need some sound advice....

I took out an endowment on my mortgage around 2002/3. It was sold to me as a draw down facility as I needed to pay off my credit cards etc. I since sold my house and moved on and I still make the regular payments according to the current base rate etc.

They (the company that sold it to me) stated that monies would be put on the stock market and and may more may not pay the full amount back but, they had no worries that it wouldn't, in fact I may even receive money back, hence making money!

5 years down the line and I'm still making the minimum payemnt and obvioulsy see no end to the payments and am worried that when it comes to the end of the period, which is YEARS off, the debt wont be settled and i'll be out of pocket, also, I really just want to get shut of it altogether?!

Any one got any advice to start me off.....????

Cheers

PaulMc

dunstonh

Any one got any advice to start me off.....????

2002/2003 was very late to start an endowment. By then there were hardly any companies left still offering them. That said, it probably was a good time to start one from an investment point of view. Although that will depend on the investment funds used and you dont mention those.

Assuming equity based, you would expect to be below target in the early years. Thats just a flaw in the projection system. In the past they never used to start issuing illustrative values on example projections until year 10 but now you tend to get them every year. You will need to give us information on the investment funds for us to comment any further on those.

As you have posted to the act on miss-sale thread I assume you are after advice on whether it was miss-sold or not. Was an adviser used in the purchase of the endowment or did you buy direct or execution only?

paulmc18

I've got the full pack at home and will dig out tonight in readiness. It was sold to me by an advisor from a small finance firm in Liverpool.

Just seems like I'll be paying the interest each month FOREVER and never really paying off the chuck of money owed. Was younger then and very wet behind the ears......

canny_scott

Hi, we have an endowment policy which the financial ombudsman has ruled was mis-sold. Unfortunately the company involved have refused to pay us the compensation due. The ombudsman says we now have to take them to court. Has anyone done this? Any advice? We are in Scotland -not sure if the court system may differ from England. We're hoping with the ombudsman ruling in our favour we should win no problem -but are still a bit daunted by the whole idea.