Act now on mis-sold endowments: new article

M0neysav3r

Hi All

Just after some advice please.

I've just come across this thread and i'm a bit confused by all the information...

We took out an edowment in 1994 via a broker which I understand are no more (the brokers that is) After a couple of years we decided to switch to a repayment mortgage but kept the endowment running too, it is with NU and we still have it now.

My questions are, to claim for being mis-sold a policy can the endowment still be running? How do you prove you were mis-sold a policy? and who do you complain to the broker or NU direct?
If we were to receive any sort of compensation would it affect the reattribution thingy?

ANy other information you could give would also be helpful.

Many Thanks

dunstonh

My questions are, to claim for being mis-sold a policy can the endowment still be running?

Yes.

How do you prove you were mis-sold a policy?

You state why you think it was mis-sold and evidence is requested from the closed firm to counter that. FSCS claims will ask you a range of questions usually because of lack of info that is typically available. Often a balance of probability decision is then made.

who do you complain to the broker or NU direct?

NU have no liability for your complaint. You would complain to the advising firm if they still existed. However, if they dont then you complain to the FSCS. it takes a couple of years normally and the redress payment in your case isnt likely to be very much if anything as its only calculated on the period it was used against the mortgage. In your case that was just 2 years. Also, you changed before endowments had started to fail (early 2000s).

If we were to receive any sort of compensation would it affect the reattribution thingy?

No.

ANy other information you could give would also be helpful.

I think it will not be worth the effort. 2 years of life in an endowment isnt enough to make any real difference. Plus, the poor quality endowments with NU are already time barred. They have recently moved on the more borderline cases but they are not timebarred yet.

turbobob

irrelevant wrote: »

The question .. I realise there is issues about time-barring, but does this relate to the projections only, or have I still got some sort of claim because they were due to end at wildly different dates to the mortgage?

Thanks...

I am not 100% but I think that could be time barred. Do the projection letters contain the dates the policies were due to mature? When did you become aware of the issue?

dreamylittledream

turbobob wrote: »

I am not 100% but I think that could be time barred. Do the projection letters contain the dates the policies were due to mature? When did you become aware of the issue?

The 'timebar' rules apply exclusively to risk so this aspect of the complaint can not be rejected purely due to 'red' letters and the complaint would not be out of jurisdiction of the FOS.

However, mismatches are usually rejected on a reaonableness test - i.e all the documenation would have stated the term not matching your other policy, so it was fairly reasonable to have been aware of this and more crucially your mortgage would have matched the term of the longer policy.

Most mismatches were done for affordability - i.e structuaring the additional borrowing over a longer term. Its similar to a typical C&I mortgage being reset to 25 years every time you move.

If you can document that your mortgage only ever had a term that reflected the first policy then you have a ghost of a case, if not then whilst you can not be 'timebarred' I would not expect the complaint to be successful

olimog

Hello there, not sure if I'm in the right area but just wondered if anyone out there has had a similar experience.

I received my annual statement for fp today with an amber warning (this is not the first). The cash in value looked very similar to last year so I phoned and had a chat with someone.

It turns out that the fund has only been growing at 0.75% a year despite their statements referring to possible returns of 4%/5.5%/8%. In the notes there is reference to an annual bonus rate which is listed at 0.75% so I'm assuming when they say annual bonus rate they mean the actual rate of growth of the investment.

It seems very misleading to still be quoting "our view is that a possible growth rate of 5.5% each year is currently a reasonable assumption" or am I missing something here? Have fired off an email of complaint but wondered if anyone else has taken this up with them?

Thanks in advance

Andrea

dunstonh

or am I missing something here?

With conventional with profits plans the projection rates are based on 5.5% before charges whereas the bonus rate is after charges. Also, the annual bonus is one of the two main bonuses paid. Terminal/final bonus is the other and long term 5.5% is within the potential as its not really 5.5%.

turbobob

dreamylittledream wrote: »

The 'timebar' rules apply exclusively to risk so this aspect of the complaint can not be rejected purely due to 'red' letters and the complaint would not be out of jurisdiction of the FOS.

However, mismatches are usually rejected on a reaonableness test - i.e all the documenation would have stated the term not matching your other policy, so it was fairly reasonable to have been aware of this and more crucially your mortgage would have matched the term of the longer policy.

Most mismatches were done for affordability - i.e structuaring the additional borrowing over a longer term. Its similar to a typical C&I mortgage being reset to 25 years every time you move.

If you can document that your mortgage only ever had a term that reflected the first policy then you have a ghost of a case, if not then whilst you can not be 'timebarred' I would not expect the complaint to be successful

I bow to your superior knowledge

Is it not relevant though that the FSA leaflets that accompany re-projections (going back at least 6 years, if not more) did not just mention risk as a potential issue but also ones such as endowment policies running into retirement and churning?

Tim._2

Does anyone know whether the rules to being missold endowments also apply to being missold ISA's?
I was sold an ISA to repay my interest only mortgage back in '98. I received a letter from L&G (who the ISA is with) last week saying that there is a significant risk that the ISA will not meet the requisite level.
I'm now thinking of cashing in the ISA (now worth £16k, although I've paid in over £20k) and overpaying on the mortgage each month with the amount that I would ordinarily have spent on the ISA. This would reduce the amount of the mortgage and in turn reduce the interest paid, then I could gradually start to increase my overpayments as the interest reduces.
However, if there is compensation to be acquired from being sold this ISA in the first place, I'd be interested to know.

dunstonh

Does anyone know whether the rules to being missold endowments also apply to being missold ISA's?

Yes. However, you tend to find the problem isnt as great with ISAs as they havent suffered as much in the same way. Indeed, whilst current values are lower due to market conditions, the long term benefit of being able to buy units cheaper gives them far greater potential than most endowments.

Also, ISAs came in much later and regulatory standards were much better then. So, you would expect the quality of an ISA mortgage file to be better than an endowment file. Doesnt mean it will always be the case but its a fair expectation.

However, if there is compensation to be acquired from being sold this ISA in the first place

Only if it was mis-sold.

lacla1966

We have 2 low cost endownments both with Scottish Mutual.

First 25 year policy taken out on 13th April 1988 paying £33.76pm
With Profits Sum Assured £8,944
Lump Sum Life Cover £26,000
Maturity Date 13/04/2013

Second 20 year policy taken out on 13th April 1993 paying £30.84pm
With Profits Sum Assured £6,244
Lump Sum Life Cover £14,000
Maturity Date 13/04/2013

We received "RED LETTERS" which said we had until 4th April 2009 to complain.

We dowloaded a template letter from this site and sent it to the broker who initially sold us the endownments and received a letter back saying "the company ceased trading around Oct 1995" and "the original name of the company was retained by the new proprietors who are not responsible for the advice provided to clients previous to company take-over".
"The company Kelvin Smith & Co (Life & Pensions) was disposed of in its entirety and no existing company director transferred to the new company when it was formed".

We then wrote to the Financial Ombudsman Service with all relevant details and copies of all letters. We were given forms to complete and return for the second endownment as they said misselling only applies to policies sold after 29th April 1988. We completed and returned their forms, and and today recieved this reply

"The Ombudsman's powers to investigate complaints against firms which were formerly authorised by FIMBRA, (the Financial Intermediaries, Managers & Brokers Regulatory Association), only allow him to deal with such complaints if the firm was authorised by FIMBRA after 1 April 1996.
Kelvin Smith & Company were indeed, regulated and authorised to carry out investment business by FIMBRA. However, this authorisation ceased on 22 January 1994 and the company did not become authorised by any other relevant regulator after that date.
You may wish to take legal advice"

Can anyone give any advice on what we should do next? Don't want to take legal advice if we are more than likely going to end up with nothing and be out of pocket for legal expenses.

Many thanks in advance.