Act now on mis-sold endowments: new article

dunstonh

we forget 70% of what is said to us. How can anyone come up with a figure like that

Its been researched on a number of times over the years. it was a while back but the researchers went through interview processes and then questioned the people on them a month or so later and found that most of what was said could not be remembered or not remembered accuratly. This is why documentary evidence is seen to be so important.

I assume this figure does not apply to the people selling these policies?

I cant remember most of what i did in the 90s (in relation to specific cases). So, I dont see why it shouldnt include us. I know the process. I know what I would have said and thinking back i can recall the odd thing here and there but I couldnt be specific.

People do forget. I once had someone accuse me of telling them something that was wrong. They remembered it was me specifically and what I told them. I wasnt even employed by the time and hadnt seen them before in my life.

My sales agent remembered selling me the policy and that he did all required of him.

Doesnt matter what he claims. Very little importance is applied to it.

However, this was accepted by the ombudsman as proof. Pity I didn't have your figures to quote at the time dunstonh as the salesman was a lot older than me and 12 years had passed.

It wouldnt be accepted by the ombudsman unless there was an overall trend. e.g. person making complaint has made claims which can be proven to be wrong. Person defending claim has evidenced some things. In areas where no proof is available one way or the other a balance of probability decision has to be made and thats when the views of one party or the other will sway a decision. It does work both ways.

This is also possibly why claims companies that use template letters and individuals that use template letters are statistically less likely to get their complaint upheld than using a personalised letter.

drtomtom

Sorry if I have posted on the wrong forum...

Just had a reply to our endowment claim from the FSCS as our advisors are now out of business. They say we are not able to claim redress from their scheme as we are time barred.

We received a letter in 2001 saying it is "possible" that we may not reach are target. We did not consider this a High-Risk or Red-Letter warning, neither did the FSA who passed our case on to the FSCS. The first high risk warning we received was in 2003, and we made a complaint in 2005.

Can anyone provide any help or advice on how to proceed, we have been waiting 4 years for a decision now and we are surprised that the FSCS does not uphold our complaint when the FSA does.

Thanks

mayb_2

This is just appalling drtomtom. In normal circumstances, before you can be time barred from making a claim you must have had a final letter telling you that you have six months in which to make your claim. If you fail to act before this date you are time barred and can no longer make a claim for misselling. I wonder if the time bar rules are different in this case as you have had to go to the FSCS. Or was your endowment bought pre regulation and this is what they mean?

I have a feeling the FSA would not have passed your claim on if that was the case and I think you should contact them again and perhaps ask them to take some action on your behalf by contacting the FSCS. Did you receive no information at all in those 4 years? I have no idea how this side of things work and hope that someone with greater knowledge can throw some light on your question.

dunstonh

We received a letter in 2001 saying it is "possible" that we may not reach are target. We did not consider this a High-Risk or Red-Letter warning, neither did the FSA who passed our case on to the FSCS.

The FSA are not there to make any such ruling. It is the responsability of the FOS or FSCS to make that ruling.

Can anyone provide any help or advice on how to proceed, we have been waiting 4 years for a decision now and we are surprised that the FSCS does not uphold our complaint when the FSA does.

Forget the FSA. They have no standing here and to be honest, they always sound sympathetic when you contact them. They dont handle individual complaints and that shows with a number of the things that people (including advisers) get told by them.

You should ask the FSCS to check if the time bar was correctly applied as you dont believe the 2001 warning complies with time bar rules. There has been some success on this with friends provident and a couple of others who had to change their time bar to use 2003 as the start point.

treliac

dunstonh wrote: »

The 4, 6 & 8% illustrations show the potential returns. providers can alter those to be less but not more.

Very crude example of target growth rate (and these figures are not correct but to give example) would be say a target of £50,000 over 25 years. Now to hit that target the adviser (or provider in case of many tied salesforces) could set the target growth rate and you would pay the monthly premium on that basis.

If you wanted a low risk target of say 4% p.a. you would pay £100pm. If you felt 6% was more likely it would increase the risk but you would pay £80pm. If you felt 8% p.a. was likely then you increase the risk further but you pay £60pm.

The higher the guessed target growth rate, the lower the monthly cost but the lower the investment amount at the end (as less is being invested).. So, a good low target growth rate would be more expensive but would be more likely to hit target.

Problem was that this setting of target growth rate wasnt common knowledge and we live in a world where people buy products based on the cost.

So, you take two endowments set up for £50k over 25 years. One costs £60pm the other costs £85pm. Which one do you buy?

If you know what you are doing and what to look out for you will pick right. However, what if you dont know? The difference in premium could be a expensive provider. It could be one has critical illness and life cover whilst the other has just life cover. It could be that one has a target growth rate of 8% and the other 4%.

One of the bad things that used to happen would be if you used multiple advisers to shop around. The adviser that was in last always had the advantage as they could lower the monthly premiums by increasing the target growth rate and sell it on the basis it was cheaper.

That's an interesting slant. I wonder how many people had it put like that. We didn't and I do remember the discussions quite clearly. Such an important decision is quite a landmark in your life's finances. I would absolutely never have taken a mortgage with any risk attached. Neither of us would gamble with our finances.

I remember three percentage figures being talked about and the salesman (as we now know him to be) confidently telling us that the top one was the one to go by. He produced handwritten notes using this figure.

Fortunately, we kept all the documentation and there was a proper form designed as a quote / illustration of benefits. (I'm looking at it now). But it was never completed by him!

From family members who also fell victim to this scam, I am sure it was common practice to mislead 'customers' in this way.

We were just lucky in that we had kept so much of the evidence. I doubt that most do so.

treliac

Crazy_Saver wrote: »

Back in 1991, We were just shown 2 illustrations and told the prices pcm. We weren't aware that different endowments used different growth rates. And as I've mentioned before, we weren't aware that keeping our existing, well performing policies were another option. We just chose the cheaper of the two. Of course if I were presented with an illustration today, I would ask so many questions!

I can honestly say that we probably would have chosen the £85pcm.
Ever since we've had a mortgage, we have always had a separate bank account to deal with the payments and have always increased the D/D payments if interest rates rise but never reduced our D/D when they have fallen. We would always rather pay extra into the account to cover any emergencies and every now and then we have a nice little lump sum to treat the family with!

Frankly, had we understood anything more that we did at the time, we wouldn't have touched it with a bargepole. We would have stuck with a repayment mortgage.

It was just our bad luck that this 'salesman' heard we were moving house. He'd been targetting my OH's workplace and set out to ensnare us with his false promises. :mad:

Crazy_Saver

treliac wrote: »

It was just our bad luck that this 'salesman' heard we were moving house. He'd been targetting my OH's workplace and set out to ensnare us with his false promises. :mad:

That's how our advisor approached us, through my husband's workplace. I suppose we would call that "cold calling" these days!

treliac

Crazy_Saver wrote: »

That's how our advisor approached us, through my husband's workplace. I suppose we would call that "cold calling" these days!

Crazy Saver - I bet it was a cynical ploy of these companies to chase business like that!

drtomtom

Sorry it was the FOS not the FSA, it can be confusing!

Thanks for the advice, although we are just not hopeful anymore. Just feel like we have been led down the garden path and messed around for so long...

Thanks again.

dunstonh

treliac wrote: »

Crazy Saver - I bet it was a cynical ploy of these companies to chase business like that!

I remember when stakeholder pension was coming in and part of the research involved in the proposals was that the UK would move towards a more US based approach where advisers saw their clients in the workplace and employers would have in-house advisers available to them.

Some of the insurance company salesforces tried to work to that model and get in early (about 96/97ish whilst the stakeholder rules were being consulted on) and failed abysmally. Thank goodness. Then again the whole stakeholder experiment failed as the Govt failed to take into account that most people need to be sold the product and wont buy it by choice or wont put enough in. Still, stakeholders did achieve one thing. They brought the product charges down and put an end to front loading. That we can be grateful for. Actually, I reckon on a 25 year endowments, if front loading hadnt existed and modern charging was used, that would more than cover many shortfalls (excluding Crazy Savers crazy shortfall).