Act now on mis-sold endowments: new article

dunstonh

In December 1987 we decided to move house. As we already had a £27,455 endowment mortgage for 25 years taken out 5 years earlier with Scottish Amicable (now Prudential) and the new mortgage was going to be £43,000 we were told by an independent consultant that a top up of £15,545 on the existing endowment would be all right. Unfortunately a couple of months later we discovered to our horror that the consultant had screwed up this ‘top up’ and didn’t actually set it up and we had to asked another company to help sort it out for us. The result was Scot Am would or could not top up the existing policy or for that matter extend it and we therefore ended up with another policy for £15,545 that would now mature in December 2012 with profits.

Whilst the term "top up" was used, it is highly unlikely the existing plan would have been topped up. Most providers never allowed top ups to existing plans as it would reset HMRC qualifying rules and endowments had to be qualifying. When the term top up is used it would refer to a second plan.

So, the situation you are in is consistent with what you would expect to have happened.

Do I make claim for mis-selling, and to whom

You werent mis-sold so any complaint there would be fraudulent. Plus, its pre-regulation so you have no-one to complain to.

A) Keep up the £23.00 a month premium so that we at least have life assurance up to the date of when the policy matures? Cash it in and take the current valuation of £9,500 or C) Make it paid up and save the £920 that I am going to pay Scot Am over the next 39 months?

Pru have a good record and the recovery is doing nicely at the moment. No-one can really tell you what is best without a crystal ball. Also, it would depend on what you would do with the money as you would need to compare the options.

henmuffin

Hi I am hoping someone can help me. I took an endowment 20 years ago to fund a mortgage from a IFA. I am trying to get compensation now. The FSC want proof that it was used to support the mortgage but I cannot find any documentation from the building society to do this. I have contacted the building society and bank but they say they do not have records going back that far. The IFA has since retired.
Can anyone help me or has been in the same situation? I think it would be a reasonable amount if I can find evidence. Many thanks.

anh1904

I had an endowment which I have letter stating they accept I was mis-sold, but as the performance was better than a corresponding repayment mortgage, they have offered no compensation.
This was in 2004.
I took out a "policy loan" against the pollicy in the hope the futre performance would improve, but after paying the premiums (and no interest) the growth hasn't even matched the interest on the loan! Grrrr.

Does anyone know if this is a cause for mis-selling action. Rather than throw good money after bad, I have surrendered the policy, and recived little more than I would have if I had surrendered rather than taken a loan out against it in 2001. So that's £45 a month in premium for 8 years thrown away.

dunstonh

Does anyone know if this is a cause for mis-selling action

No. You made the choice and decision. No-one else.

barriereader

Hi,

We signed in January 1988, we were not told there could be a possibility of a shortfall. We were actually told we would have a lump sum once our mortgage had been paid. We have contacted the Ombudsman and have been informed that as we signed before 29th April 1988 they cannot help us. What else can we do? We did inform the Ombudsman back in 2005 once we realise there may be a shortfall, however we have now been informed things have changed and we could make a claim for misselling. Any help would be appreciated.

Thank you,
Barrie

dunstonh

We have contacted the Ombudsman and have been informed that as we signed before 29th April 1988 they cannot help us. What else can we do

Nothing. Its pre-regulation and you have no financial services based consumer protection. You could consider legal action but thats a risky business. Most endowment complaints are rejected and any ruling would be based on rules in place at the time and not today. You would also be required to evidence where it was mis-sold. Its probable you have no evidence.

We did inform the Ombudsman back in 2005 once we realise there may be a shortfall, however we have now been informed things have changed and we could make a claim for misselling.

Things have not changed and you cannot make a mis-sale complaint.

barriereader

Thanks for your help.

Regards,
Barrie

wilksy007

Hi Everybody,

Not sure if you guys will be able to help me, well help my dad actually.

He was mis-sold an endownment mortgage back in 1985 by The Bradford and Bingley. The story is similar to alot on here, he was not made aware of possible shortfalls, but told there would be enough cash at the end to cover the mortgage and give him a lump sum.

My dad really isn't too hot at this sort of stuff, but they told him there would be a shortfall back in 2002, so he cashed in the endowment in 2003. However he continued to pay the same mortgage until 2007 when he swapped it to repayment.

Is there any chance he could make a claim?

dunstonh

Is there any chance he could make a claim?

Unlikely. Regulation didn't come in until 1988. If the B&B rep at the time worked for the insurer then they would possibly consider it. However, if the rep was not working for B&B (and many building societies back then used local firms) then the B&B are not liable.

Also, you have to look at the years and chances are he wasnt financially worse off. Endowments didnt start to go into shortfall positions until around 2001. It was the late ones that fell short first. The older ones tended to fall short a few years later. He was never notified his was going into shortfall. So, its quite probable that at the point of surrender he was not financially worse off. He would have also benefited from extra MIRAS during those years and for most people, endowment mortgages were cheaper than repayment mortgages (one of the most common reasons for doing an endowment).

So, given what you have said, if he was not financially worse off and any complaint would result in no money being paid. Even if it was able to be considered given its age.

wilksy007

Thanks alot for the quick and full response dunstonh

I'll give it a go as i haven't got anything to lose, but I'll tell my parents not to get their hopes up.