Act now on mis-sold endowments: new article

Crazy_Saver

Quote:
Originally Posted by dunstonh
I dont think there is any standard on this to be honest. My "guess" based on past cases is that they look at the point the mis-sale began and calculate it from there. Remember that the cancellation/surrender of the old plan would have incurred surrender penalties. They need to be factored in as well. So, you should get more than just the return of premiums plus interest.

Spent a while trying to make sense of it all last night and it appears that the FOS guidline to the firm has been to work out the redress solely on the churned policies. The total amount is to be based on;

1. A = Return of all premiums paid from the start of the policies until they were surrendered in 1991.
2. B = interest on all payments made into the policies.
3. C = surrender value(which as you have said did incur penalties so was much less than we had paid in).
4. D = interest on A + B - C right up until we surrendered the new policy 2 years ago (Works out to 17.5 years interest!).

I'm still not 100% sure why the calculations are based on the churned policies and not the one that we were wrongly advised to purchase but I'm sure someone who understands the system will be able to shine a light on things for me;)

I can actually see a light at the end of the tunnel now!:D

dunstonh

You know how certain companies worked within your industry back then.

That was and still is the nature of tied companies. They need to sell and they give their sales staff the impression that what they have to offer is the best there is. What usually happens to the tied sales reps after time is that they either become brainwashed into thinking they are the best or they become disillusioned with the provider as they have the sense to realise that they are not very good.

Risks become watered down over time if the risk doesnt result in something negative happening. Endowments had never failed to hit target for decades. Many become complacent and played down the risks. The same could be said for the banks in what they did with the credit bubble. If hte risk is disclosed but played down then it doesnt necessarily make it a mis-sale as long as its within context.

The problem for you is that you should have known better. The training and timescale you had may mean you didnt realise at the time but that isnt recognised.

Diesel44

We started our endowment miselling claim back in February 2005.
We took out a Norwich Union Endowment policy in November 1998, but the company who sold us the policy went out of business so we had to go through the FSCS (Financial services compensation scheme ).
The main problem was that we had a letter of proposal dated 11th August 1988 for the policy and the FSCS would only look at cases dated from 28th August 1988.
We complained that the proposal letter was only a offer for consideration and as our policy did not start until 2nd November 1988, we must have been in contact with the firm between these dates, but had no written documents to confirm this.
We followed the FSCS complaints procedure. The final stage was to ask for a Independant Investigation. The Final letter from the FSCS dated 20th March 2007 declining our request for an Investigator. They also said that we have exhausted all stages of their complaints procedure and we should now seek legal advice.
During the complaining, we argued that the telephone was used in many converstions to the company. If you have a query about something, you pick the phone up to get an instant answer.
That's where we left it I'm afraid. Should we have pushed it further ?
Is it too late now to continue ?
The main problem is we have no written letters dated after the 28th August 1988 confiming that we were still being advised by the company.

dunstonh

That's where we left it I'm afraid. Should we have pushed it further ?

No. Its clear you dont qualify for any consumer protection as it was the date the contract was entered into that matters and that was pre FSCS.

Is it too late now to continue ?

Yes. The FSCS cant help you and the firm no longer exists. So you have no-one to pursue.

The main problem is we have no written letters dated after the 28th August 1988 confiming that we were still being advised by the company.

It doesnt matter. Its point of sale that does. Any reviews documented following that would indicate a knowledge of returns not being guaranteed and subject to fluctuation and would work against you anyway.

Diesel44

Thanks dunstonh. Can I query your first point, your calling our letter of proposal as a contract. I see the letter of proposal as a written document of our conditions, at this point we could still say yes or no.
Thanks anyway.

dunstonh

Diesel44 wrote: »

Thanks dunstonh. Can I query your first point, your calling our letter of proposal as a contract. I see the letter of proposal as a written document of our conditions, at this point we could still say yes or no.
Thanks anyway.

Problem is that you are not complaining about the endowment. You are complaining about the advice given. The advice given was up to and including the day of signature on the application form.

A line had to be drawn in the sand sometime and you fell the wrong side of it. A pain, but if the line was another date then others would be in the same boat.

lalabibaby

We recently sent a letter to a company called Key Consultants who arranged an endowment for us with L & G back in September 1989. We were pointing out that:

• the endowment was not suitable for us
• the adviser did not discuss how the endowment was invested or establish an attitude to risk
• we already had an endowment with L & G and were advised to cash that in for this policy
• the advisor said that this policy was guaranteed to repay the mortgage and that there would be an extra lump sum in addition at the end of the term

Key very quickly sent this on to L & G and we have heard nothing back from them but have received a response from L & G who tell us that the time limit for complaining about the sale of the endowment has now expired and therefore they will not be looking at our complaint. They also enclosed copies of previous correspondence regarding the poor performance of the policy and the likely shortfalls. But they also state "despite my decision not to look at your complaint, I will be prepared to reconsider it if there have been any exceptional circumstances that have prevented you from making your complaint within the time allowed. If you feel there are valid reasons please let me know" - they also include information about the Ombudsman.
Whilst accepting that we have received correspondence regarding the shortfall our main gripe is with the Sales people at Key who originally advised us. They did not at any time tell us that we didn't have to cash in the original endowment and could have just taken another out to top it up but suspect this was a deliberate omission on their part so that they gained the highest amount of commission possible.
It looks now that in 2014 when it matures we will get around £20K instead of the £40K target. We have in the meantime taken steps to change over the mortgage to repayment to soften the blow as we were damned if we would throw more money away on endowments. Hindsight is a wonderful thing and when I think back at how these policies were sold with the fantastic idea that your mortgage would be paid off and you would have cash to spare I could spit at the bare faced lies we were told. We had been quite happy with a repayment mortgage up till then and should have stuck with it.
The advice needed now please is should we:
a) pursue Key
b) push harder with L & G
c) or both

dunstonh

when I think back at how these policies were sold with the fantastic idea that your mortgage would be paid off and you would have cash to spare I could spit at the bare faced lies we were told.

When you took yours out, no endowment had ever failed and most were paying out 3-4 times more than the target amount. Its wasnt lies you were told. It was complacency that they would continue to perform that way and a lower standard of regulation and knowledge than that which exists today.

The advice needed now please is should we:
a) pursue Key
b) push harder with L & G
c) or both

You are time barred. End of the road. L&G will only review it if you have very good grounds as to why you couldnt complain between 1989 and the period you were time barred (most endowments were timebarred between 2006-2008.

The fact that L&G are even talking to you suggests that Key are agents of L&G and take on the liability.

ktel1

My endowment taken out in 1987 was with Royal Life. The ownership of these funds have been passed by Royal Life to Resolution and currently is now run by Phoenix Life, which I believe is a closed funds company and basically just "caretakes" the product in order to stay within FSA rules.

I am in process of making claim against them and requested a full copy of all information they hold about my case. They have replied by letter saying that they only hold information that goes back the past 6 years and that is iaw FSA guidelines. They are in effect stating that all the original documentation as taken by Royal Life and the financial advisor that sold me the policy right back at the start has now been destroyed.
Is this true?? Can anyone advise on this?

I still have much of the original documentation. However, cannot seem to find original policy document.

Has anybody else claimed against Phoenix and who can recommend a strategy to take?

Thanks

dunstonh

Is this true?? Can anyone advise on this?

Yes. Its very common for client files back then to be destroyed after 6 years. Remember thats the period when data protection came in and 6 years was deemed by many to be the required timescale. A significant number of complaints have been upheld on the basis of lack of documentation (well not upheld but paid up on due to insufficient evidence). However, your problem is that the case will be reviewed on 1987 rules and regulation didnt start until 1988. So, there wouldnt be an expectation of much documentation anyway.

Has anybody else claimed against Phoenix and who can recommend a strategy to take?

Assuming you are not timed out (over 2/3rds of endowments already are), then you complain to the advising firm as per normal.