Act now on mis-sold endowments: new article

dunstonh

I think I've missed the boat for claiming compensation ie I'm probably time-barred, however I do believe that I was mis-sold.

So, why didnt you complain in the 18 years that you have had the policy?

hen I bought my flat in June 1992 there were the beginnings of disquiet wrt endowments so on the prompting of my then partner I asked about the likelihood it not paying out (it worried me) and got the sales speil; it's never happened before, is very very very unlikey, big bonus on top etc.

That suggests its not mis-sold. You were aware it may not hit target. You were correctly told that they had never failed to hit target and in 1992 it was considered unlikely. Unlikely is not a guarantee it wont. You knew it was possible.

So even if I'd complained on time and the complaint had been upheld I'd probably have been awarded £0.

Most endowments didnt fall into shortfall until around 2000. So, if the mortgage was cleared before then it would probably result in zero redress.

I'm going to apply the calculations that others have posted to try and work out whether it is worth keeping going as a savings policy. I've got a feeling from reading the posts of people in similar positions it won't be very clear cut and will rest on, do I think the market is going to improve in the time left (until 2017). If I've got any problems working it out I'll ask the experts who watch this thread and give good advice.

Do that. And make sure that you post the mortgage promise value as that can often swing the decision from dump to keep.

RRatchet

Dear Dunstonh,

Firstly I didn't complain in the first 18 years because for most of that time the endowment was on course to repay the mortgage, so there was no need, as long as the mortgage was covered I was OK.

Secondly what I originally posted was the abridged version and probably doesn't convey the certainty with which the advisor dismissed the likelihood of it falling short, so unlikely in fact it wasn't worth worrying my pretty little head about. I was quite adamant at that time that I needed the security of knowing the mortgage would be paid off. I was straight out of Uni, in debt and buying my first home and also financially naieve (obivously my partner wasn't). I was very poorly paid at the time and as a minor civil servant couldn't expect a massive increase in my salary over my career.

Thirdly, at the point at which it became really obivous that endowments in general and mine in particular were lame ducks, I'd married a relatively wealthy person and we decided to pay off the mortgage. I suppose the point I'm making is that it seems unfair that another persons money allowed Standard Life to avoid paying compensation, I wouldn't feel anywhere near as annoyed had it been my own money I'd paid the mortgage off with. My partner didn't have to cough up and we'd probably have delayed paying off the mortgage until compensation had been agreed or not.

With more maturity financial and otherwise, I'm still annoyed at the lack of transparency and complexity of endowments, and if I ever invest in anything ever again it will be an investment trust tracker or cash. Which I can just about get a grasp of. Unless I win the lottery that's not going to happen and of course I'd have to start doing the lottery (can't afford/it don't like the odds).

Lastly I've taken note of the info required and will be phoning Standard life for the relevant ifigures which aren't on the statement. I'll also be asking about the option of making the policy made up.

Thankyou again for your input.

Yours

R

ps I'm probably giving the impression that I'm really skint, whilst that's true in cash terms we are relatively well off in capital terms it's just that we can't access much of it, unless we sell the family farm; then bang goes our jobs and the kids livelihood if that's what they want. That's a whole other conversation though.

Any way off to do some work. Bye for now.

mayb_2

I think you are typical of a lot of people who bought into the sales speil of the time. To be fair a lot of the sales people would be convinced these would not fail as up until recently they never had. The same is true of pensions. However, the real crime occurs once these people did know - certainly around the time you were buying your endowment, and carried on decieving the buyers who have no way of knowing this is not true. Low cost endowments, such as the one we took out, were known not to be likely to cover the mortgage at the end of term. Luckily the company put its hands up and paid up on ours without a fuss. If only all companies were the same instead they hide behind the three year rule and pretend that because we bought an endowment we all knew what we were doing. How? It is only because of the failures that people came to understand the hot potatoe they were holding.

As the governing bodies for these people are linked with the government there is no justice to be had - one corrupt bunch overseeing another it would appear. And all claiming that they hadn't seen it coming.

devdas212005

Hi guys,

I was mis-sold an endowment. I was not told the endowment would be linked to shares so could cause a shortfall. I was just told endowment was cheaper then repayment mortgage and I may even get a surplus. I complained and after 12+ weeks, I got a letter saying the bank accepts the endowment was not appropriate for me. They don't accept that I "was led to believe that the mortgage would be paid off and there would be a surplus because I was not present at the meeting with our member of staff."

Since I didn't have any documentary evidence, they have not upheld this complaint even though I was told the mortgage would be paid off and I may get a surplus. What can I do about this? It was very common back then for sales advisors to promise a surplus and not to mention the chance of shortfall. What am I meant to show as proof? I have nothing in writing either.

mayb_2

That is the problem devdas I am sorry to say - unless you have a quoted figure in writing relating to the surplus figure then there is nowhere to go with this. The mortgage to be covered is a known figure as it is whatever your mortgage was at the point of sale. However, although generous figures were often quoted for the lump sum at the end of the term, I doubt if many people could come up with a definite promise in writing. If you have nothing in writing then you cannot 'prove' anything despite the fact we all know it happened.

dunstonh

I was just told endowment was cheaper then repayment mortgage and I may even get a surplus.

Nothing wrong with that statement. Endowment mortgages were typically cheaper than repayment mortgages and that was a very common reason for people going with them.

even though I was told the mortgage would be paid off and I may get a surplus.

Problem is that anyone can say that after the event. Many have when they knew the risks. If the firm have the factfind and suitability report that contains the risk warnings and a decent assessment of your risk along with a cost comparison of repayment vs endowment then the documentary evidence works against you as they have proof and you dont.

What am I meant to show as proof? I have nothing in writing either.

They have to have proof that it was sold correctly. So, at the start of any complaint you have a slight advantage. You dont have to prove anything. They have to prove it was right. If they can show the documentation backs up the recommendation and you have no proof of what you claim then they win. If they have no proof to back up the recommendation, you win. Later endowment illustrations did also show a shortfall position on the illustration along with risk warnings that you may not hit target.

devdas212005

dunstonh wrote: »

Nothing wrong with that statement. Endowment mortgages were typically cheaper than repayment mortgages and that was a very common reason for people going with them.



Problem is that anyone can say that after the event. Many have when they knew the risks. If the firm have the factfind and suitability report that contains the risk warnings and a decent assessment of your risk along with a cost comparison of repayment vs endowment then the documentary evidence works against you as they have proof and you dont.


They have to have proof that it was sold correctly. So, at the start of any complaint you have a slight advantage. You dont have to prove anything. They have to prove it was right. If they can show the documentation backs up the recommendation and you have no proof of what you claim then they win. If they have no proof to back up the recommendation, you win. Later endowment illustrations did also show a shortfall position on the illustration along with risk warnings that you may not hit target.

I am going to write back and tell the bank they have to show proof I was not misled. If the bank does not change it's position, then I will complain to the FSA.

dunstonh

devdas212005 wrote: »

I am going to write back and tell the bank they have to show proof I was not misled. If the bank does not change it's position, then I will complain to the FSA.

The proof should be easy for them to supply if they have it. It should be on the suitability report (or reasons why letter if older) that there are risks and what the risks are. That is the key document as its a summary of the recommendation and why that option was considered rather than other potential options. If the risk warnings are on there then there is little chance of success for you. If there are none or insufficient then it works in your favour.

You cannot complain to the FSA. They do not review consumer complaints. If you are unhappy with the response from the bank then it is the FOS that you take the complaint to.

chief_wiggum

hi there ive been watching this thread and would like to say that as far as im aware from personal experience that when you claim money back you do not get compensation you get back exactly to the penny what you have paid over the years.
compensation should be extra and above what you paid for being mis-sold the product after all i could have had the money sitting in an account earning interest.
is it me who has been short changed or are people getting confused with the term compensation which it quite simply is not!

mayb_2

You are right chief in that it is not compensation, but it is not a return of your money either. It is officially known as redress and it puts you back into the position you would have been in if you had been paying a straight forward repayment mortgage over the same period of time. You don't actually get compensated for anything as you say.