Act now on mis-sold endowments: new article

Janette9

RobCheshire wrote: »

Rather stupidly I was six weeks after the time limit when I made my complaint, this was a couple of years ago. It took ages (over a year) for the Ombudsman service to write to me telling me they were not allowed to take up my complaint as I was too late. However they did keep me informed of the delay in dealing with my letter by regular communication.

Is it really the end of the line for me? The lateness was for a variety of reasons, but I accept that it was my fault. It seems ridiculous that a period of six weeks over a twenty year term should allow them to get off scot free.

It's even more galling that the Standard Life policy was sold to me by a 'friend' employed by a building society, who has since had a fat redundancy pay off. He openly admits that selling these policies was very lucrative for him at the time. The BS, by the way, has recently been taken over by Santander...

I have one year to go, and will have to find around £6000.

Anyone got any ideas??

Thanks

Rob

We are in the same position as you, we made our complaint within the 3 years only to be told ours was sold by an independant financial advisor and we couldn't complain. I always thought it was through building society find it strange we had an independant one when we took mortgage out through a society and ours is also with Standard Life.

Jan

dunstonh

Dunstonh the idea that you should feel better off when you are left with large sums of money to find at the end of a mortgage term is a nonsense.

Its not nonsense. The shortfall doesnt suddenly creep up on you and when you look at the economic situation that help endowments pay out extra for all those years and compare them to the last 10 years, you realise that the latter is better for you. Ironically, the economy is quite likely starting a cycle that could see a lot of people end up worse off but see endowments start to do well again.

In the later years many of these were sold after it had become clear that they would not pay off the mortgages they were being sold to cover let alone produce a lump sum. They did, however, still produce lucrative commission for the person selling them.

True. By about 97-98 it was clear endowments were obsolete. Although thankfully target growth rates had come down by then. However, it is also worth noting that from about 2001, most endowment sales were from consumers not seeking advice but buying direct.

mayb_2

My endowment was bought during the 'obsolete' period and before 2001. We saw a mortgage advisor who gave us the option of an endowment mortgage - nothing else. We were never better off as we always struggled to pay this mortgage with redundancy etc to cope with too. We also struggled to pay another endowment for my future pension. Both of them let us down very badly and we received no recompense for the latter.

The people you are referring to dunstonh were far more knowledgeable and better advised than we were. I can promise you we have never benefitted from any of the financial advice we have received. Perhaps because we couldn't afford to pay for it. You are right about one thing our shortfall didn't just creep up on us - it smacked us in the eyes straight out of a clear blue sky!!

You speak as if there was always a three year rule on claims etc. Ours was sorted many years before this was put in place and we were probably amongst the first people to be told our mortgage wasn't going to meet target (by £25,000) please explain how we gained this sort of money over the years we paid this mortgage because it was an endowment.

I am sure what you say is correct in theory, but like many other theroies it doesn't work in practice. Perhaps we should start a thread for those people whose mortgages failed and left them in debt but feel better off anyway.

If you managed to get redress for your missold mortgage and you converted to a tracker mortgage for a few years you may be in the position of having such low interest at the moment that you can pay off some of the lump sum. However, you say this market has bottomed out so we must assume such low interest rates will not last much longer either. If you have lost your job and are in the latter years of your working life, struggling to find a way of getting rid of that millstone of a mortgage debt - well what hope for you then>

By the way for anybody in such a position, the government will pay your mortgage interest only. However, this is set at a rate of 6% and so you will be able to pay off some of the capital as well with the money you receive whilst out of work.

Crazy_Saver

mayb wrote: »

!!

You speak as if there was always a three year rule on claims etc. Ours was sorted many years before this was put in place and we were probably amongst the first people to be told our mortgage wasn't going to meet target (by £25,000) please explain how we gained this sort of money over the years we paid this mortgage because it was an endowment.

Hi mayb.

I have to agree with you - we don't feel £32,000 better off for having a very under performing endowment either!

I also agree with dunston on the fact that at the time, no one could have foreseen the downfall off the endowment either.

One of my main complaints has always been that the advisor really didn't make us aware that there was a possibility that the policy might not pay off our mortgage. I won't keep going over my case as most of you are already familiar with it, but I can honestly say that we were never risk takers and had we thought for just one minute that there was a chance our mortgage wouldn't get paid at the end of the term then we would definately have gone with the repayment option. We, like many others, really believed that we were paying off our mortgage whilst creating a rather large lump sum to do with what ever we wanted when we were older.

I know that people like us have been branded as "greedy" or "not as naive as we say" but it's the truth and I am finding it increasingly difficult to prove it. Not so much on these boards but with the FOS. No matter what evidence I supply them with, they always come back with "the balance of probabilities"!

One adjudicator even wrote that he could find no evidence to suggest churning - in the same report that had a quote from the firm saying that they do not deny advising us to surrender our original poilicy and then selling us another one! :wall:
Although after complaining about this fact, another adjudicator reviewed the case and found in our favour regarding the churning aspect of the complaint.

It is unfortunate that there have been an awful lot of less honest people who have jumped on the miss-selling bandwagon which has made it so difficult for the genuine cases to receive a fair hearing.

ManicMum

Hello. Just reading some posts here. I am trying to make a complaint to the FSCS re. a defunct company over my policy sold to me in 1998. I cashed it in last year. It was with Standard Life and I received the annual updates indicating a shortfall but there was never any time limit mentioned for making a complaint or dates given. Can I still make a complaint? How are people supposed to know the time limits if none are given? Or does that mean I can still go ahead and complain?

Helpful advice appreciated.

Thanks

dunstonh

How are people supposed to know the time limits if none are given?

The time bar starts when the warning is given that it is starting. If no warnings have been given then it hasnt started and you can go ahead.

Just be warned that the FSCS is a very slow process. 2 years is quite normal.

mayb_2

As Crazy Saver says it is very difficult to convice the FOS about these things - I am not as generous as Crazy Saver though, I believe it suits both the Ombudsman and the FSA to be disingenuous about the conditions that existed at the time of these sales.

On one hand they are setting up a system to deal with the problem that arose when many people found their mortgages just were not going to pay out; on the other hand they are taking the stance that on balance of probabilities these things didn't happen.

Supposing this had been picked up by legal firms first and taken to court as a test case in the way that bank charges have been - what would the result have been then? Instead the government stepped in with the FSA and its remit to protect the finance industry from public loss of confidence.

I don't think I have to remind anybody of the situation we are in with help from the FSA - Northern Rock etc etc. Time has shown that greed was behind the selling of endowment policies in the same way as the sub prime market issue was created by greed. It was also feeding on the financial naeivety of the people these things were sold to and in some cases of those making the sales.

You also cannot forget that initially, as these endowment policies did not fail in the past, the sales people did not market them as a risk. How then can it be assumed that despite the fact they were not considered a risk, it is likely that this point was emphasised and explained to the consumers at the time. It makes no logical sense to claim both positions. It also makes it more likely they were missold from the late 1980's when they were known not only to
be a risk but most likely to fail to meet their targets. The people who bought them could not have been informed or they would make no sales. How many people would take a risk on buying their homes when there was a perfectly safe way of doing this with a repayment mortgage?

I think this idea is a dummy that soothes those with a conscience that may not rest easy otherwise.

Dunstonh has also said that the markets know about these things before it becomes news. I rest my case.

dunstonh

Supposing this had been picked up by legal firms first and taken to court as a test case in the way that bank charges have been - what would the result have been then? Instead the government stepped in with the FSA and its remit to protect the finance industry from public loss of confidence.

Most of them would have been time barred under a court of law so the consumer in general would be worse off. Plus, unlike bank charges, in court you have to prove misrepresentation. The court would look to documents containing risk warnings which the FOS totally ignore.

Remember a lot of the reasons why endowments get redress is not because they were sold unlawfully but because they broke FSA rules. Not laws.

mayb_2

I wasn't given any information about risk at the sale of my endowment mortgage and the arrangement was made over the phone. My claim for a missale was upheld by the company without argument and it was all dealt with very quickly. I am sure any test cases would have been built around such obvious missales, and so benefited the people in general when case law was established on this point. In a court there is not a rule of balance of probability either.

I, and I am sure Crazy Saver amongst others had more than enough paperwork to back our claims of missold endowments (in my case I refer to my 'pension endowment' sold to me as a savings plan for retirement). I also had a good case that my policy was churned. I lost my claim on the balance of probability and the Ombudsman ignored the obvious discrepancies in the paperwork and claims made by the company. However, my pay out was enhanced having made the claim - so perhaps worth taking this to the Ombudsman in one respect.

his could not have happened in a court of law. If you break rules laid down by the FSA then it is true to say that you are in breach of those rules and subject to sanctions because of them.

It is possible to bring such cases to court if you have enough money to back your legal costs. Not something that many people in this situation are likely to have. I think it is a win win situation for many of these financial institutions who could have faced serious threat if they had to pay out on all of the many claims made. This means the odds are stacked before you start - you only have to look at what is being done for banks and their backers to see how hard the government will work to protect them from their own mistakes. Not only that, but the same people who suffered at their hands are being required to pay through their taxes for this.

dunstonh

I am sure any test cases would have been built around such obvious missales

They would not. The sales were made by different people. You cannot make such assumptions in a court of law that just because a minority were bad, they all were.

In a court there is not a rule of balance of probability either.

You would have to proof mis-representation. A lot harder than the FOS requirements.

his could not have happened in a court of law

Why not take it to court then if you are that confident? I know you go on to mention costs but small claims doesnt cost much.