Act now on mis-sold endowments: new article

mayb_2

MoonlitKnight

In the light of dunstonh's comments and the evidence of 'misrepresentations' made by companies in their responses to the Ombudsmanm, I would sugest you ask the Omnudsman (probably adjudicator) to send you copies of the paperwork that they received from the company. This may then form a basis for your complaint to be looked at by the actual Ombudsman and certainly may fuel a complaint to the FSA.

DREAMER

Hi to all.
Back in 1980 I applied for a small first time mortgage and being on a low salary it needed to be the best for my financial position.I had applied to Provincial Building Soc; and was at that time advised that the endowment mortgage was the best way for me to proceed e.g. lower repayments that I could afford.The endowment that Provincial set up for me was with Standard Life.the period was Feb 1980 through to May 1999.
In 1986 I decided to move house and went to Birmingham Midshires to apply for the mortgage .I was advised by B.M. adviser that the best way forward was for me to take out a new endowment policy and to cancel or surrender the current policy. On this advise, that is what I did.
Reading some of these post I think now that this was wrong.
Now my present policy has a shortfall, which was my main reason for seeking the opinion of some of some of you on MSE. yes, maybe I should have seen how unwise the endownment route was but I trusted my adviser .I have contacted my present endowment company Legal & General who have sent me a Mortgage Endowment Questionnaire.I only have 19 months left of term.

turbobob

Hi Dreamer. Surrendering a policy to replace it with a new one is called churning. Unless there is a really genuine reason for it, this is bad advice. If it was a BM member of staff that you saw, I would guess the complaint will be referred back to them to deal with. L&G as the product provider would probably not investigate unless they actually gave you advice. I would suggest that you dig out any records you have of the original policy as some companies will not keep records of policies that were cancelled that long ago.

If you were wrongly advised to replace a usable policy with a new one, there is a specific method of redress for this. Its in your interest to provide as much information as you can, as churning redress can make a big difference to any compensation.

mayb_2

Good advice turbobob. I wish I had known about that word 'churning' when making my complaint to the Ombudsman turbobob. There was obvious evidence of this as one policy was finished on the same day the new one was started. I had a pension and this was replaced by a 'savings plan' on the advice of the salesman. I did point out this fact to the Ombudsman, who ignored, it but I was not aware that it constituted a different sort of missale or I would have pursued it on that basis in the first place.

dunstonh

Churning is not necessarily bad advice. I frequently recommend change of products. Indeed, one on my desk at the moment involves stopping the pension and paying into a "savings plan".

However, it has to be justified and that is where many of the churns of the past fall down. (in case I get accused of anything, the pension being stopped in the case I mention is because his pot is large enough to take him to almost the age allowance income and we dont want to exceed that as it would create a £1000 a year tax bill whereas the ISA is tax free and would avoid it. £1000 for year for life saved. Hence justification.)

The churn of the 1980 policy with the 1986 one is going to be very hard to justify. Indeed the 1980 one would probably have paid a surplus as the timing was better and it got tax relief. The 1986 one would not have got tax relief.

My only concern on that one is if the BM agent wasnt tied to L&G then L&G have no liability. When they get the questionnaire back they will check then to see if they are responsible.

DREAMER

Many thanks for your comments turbobob and dunstonh.
Although the "churning" was something I had not heard of, on this I am clear though , I was advised to simply start again to surrender the exsisting policy and take out the one they offered .As to the BM agent being tied to L&G again this is something I cannot remember but I will complete the questionnaire and await there response.
In connection to my shortfall I am very lucky when I read of others as I may be only a few thousand short,however and yes, perhaps foolishly I looked forward to having a house paid for and a few thousand over,but only because that is what BM s agent had told me.Such is life.

dunstonh

Make sure you mention on the form that you have recently become aware that the 1980 plan had LAPR tax relief and that the 1986 one didnt and that meant it was costing you more and you dont believe that was taken into account.

Sometimes you have to remind the complaints person handling your complaint that LAPR existed.

Crazy_Saver

turbobob wrote: »

If you were wrongly advised to replace a usable policy with a new one, there is a specific method of redress for this. Its in your interest to provide as much information as you can, as churning redress can make a big difference to any compensation.

Hi turbobob.

Sound advice!

An adjudicator upheld our churning claim and suggested we get the value of our payments back with 8% interest less the surrender value of the policy which the firm have contested.

The adjudicator did say on the phone that he would be willing to consider changing his suggestion to also put us in the position we would have been in if we'd kept our original policy which is projected as being over 16k better off than the one we took out. He advised us to put our request in writing and he would pass it on the the ombudsman.

We are still waiting for an ombudsman to review our case! Plenty of time yet, after all, they've only had it for TWO AND A HALF YEARS!!!!!

MONSIEUR_3

Hi, I contacted Norwich Union last year, using the letter format from MSE, they replied within 1 month to say that I was sold my policy through a third party. They told me that they will contact the third party to investigate. The third party company then responded to me after another month to say they will investigate and get back to me. This was done in Jan08. Jan 09, I still haven't rcvd any communication from the third party company, so I contacted Norwich Union and they advised me that I should write to the company for information, which I did. I have been away and come back recently but I've had no reponse to my letter from this company. I have kept all the documents, communication letters and the original policy that I was sold. Could someone please help/advise me on the next step.

kborom

I have 2 endowments from 92 and 97, both looking to pay out half at most of the original planned amount and I am pretty sure that the second one should not have been recommended.

They were through an IFA, not sure if they are still going, does anyone know if I have any chance on this - and if so what is the best starting point?