Act now on mis-sold endowments: new article

mayb_2

The aim of this forum is not to discourage people from claiming and I don't believe anyone is in a position to assume that the claimant is the one who is not playing by the rules, when you consider what was lurking in the background and came to pass as a banking crisis.

The finance industry is not in a position to take the moral or ethical highground in the present or past climate regarding their actions over endowments or their current ones over subprime mortgages and toxic debts.

I do understand that pensions are investment packages and I also understand that a lot of people have received far less in pensions than were anticipated when they invested in them. Let us not forget the amount of pressure from the government put on people to provide for their own future retirement. I am sure you would find that those affected completely understand that they have not provided for their futures at all and have no way of changing that once they reach retirement age and need to draw on their pensions.

In the real world most people did not understand the processes and relied on advice given to them at the time. I would imagine it is going to be a long term crisis as many young people are not either financially able, or inclined to invest in pensions.

When I received a warning letter on my mortgage endowment I phoned the company for advice (as advised to do in the letter). I was told that if I upped my payments all would be well. So I upped my payments and lost even more money in the process. Following the next letter I sought independent financial advice and was told how badly this particular endowment was performing and that it had absolutely no chance of providing for my mortgage.

I was one of the 'lucky' ones who was given redress for my endowment without having to fight for it. The time bar is just a tool to avoid having to pay out on missold endowments and takes advantage of people's lack of understanding of the product purchased and how to deal with the situation they find themselves in.

Walk a mile in another man's shoes before you seek to judge their actions or feelings. If you haven't been there it is hard to understand where they are coming from. It is insulting to assume that people are lying only if they are the people who are the victims. The financial industry has the most to gain by resisting these claims and if anyone is going to distort the truth it is far more likely to be them. Having got themselves into even deeper water recently they are going to be in a very sticky place if they also have to continue compensating people for the endowment sales.

There is absolutely nothing to be lost by offering helpful advice to people asking for just that. If the claim is not allowed by the Ombudsman then there is not a lot anyone can do about that. If the reason that it is not allowed is the time bar then that is not a validation of the original sale - it is just an excuse not to look any further.

dunstonh

I also understand that a lot of people have received far less in pensions than were anticipated when they invested in them.

That has nothing to do with the pensions though. You are talking about an era when inflation was far higher so returns were far higher. The net return including inflation is not much different. People also forget to increase their premiums periodically. Paying £30pm in 1988 when the average wage was under £10k may have been fine but still paying £30pm in 2009 and assuming it will still be good enough is not the fault of the pension. When you look at most pensions of people who are not happy with the amounts, the most common problem is an unrealistic expectation that £50pm for 30 or so years will pay them back £1000pm for 30 years.

When I received a warning letter on my mortgage endowment I phoned the company for advice (as advised to do in the letter). I was told that if I upped my payments all would be well. So I upped my payments and lost even more money in the process. Following the next letter I sought independent financial advice and was told how badly this particular endowment was performing and that it had absolutely no chance of providing for my mortgage.

Tied agents/companies will not allow their staff to recommend cancellation. IFAs are the only ones that can.

We know the reasons for the failure of many endowments. However, we also know the economic events that caused it are also those that have made us so much better off in other areas.

The time bar is just a tool to avoid having to pay out on missold endowments and takes advantage of people's lack of understanding of the product purchased and how to deal with the situation they find themselves in.

The time bar was actually to stop opportunistic complaints from people deciding to hedge their bets. Personally, I am not a fan of it. I do think there should be a time bar but it should match that in law. Nothing more, nothing less. Why the FSA think there should be something different in some areas and not others doesnt sit well with me.

It is insulting to assume that people are lying only if they are the people who are the victims.

No-one suggest that. However, we do know consumers are up for committing fraud just as much as any other group. To assume consumer = good and company = bad is foolish. They are both as bad or good as each other.

We get given copies of complaints periodically to help us see the sort of things coming in and how those complaints are answered/settled. You can tell the genuine ones pretty quickly and you can see the try it on ones just as easily. There are significant numbers of try it ons. It does appear that the FSA is beginning to realise that now though.

There is absolutely nothing to be lost by offering helpful advice to people asking for just that.

Correct. However, there is also no point giving them hope in areas where its not likely. Better to say where the problem is likely to be.

If the reason that it is not allowed is the time bar then that is not a validation of the original sale - it is just an excuse not to look any further.

Maybe so. However, its still doesnt help the person get past the time bar.

Problem with discussions like this is that they can appear to give polarised opinions when the views of the individuals are not polarised. My view is that if the complaint is fair then go for it. If you complaint is a try it on then it should not be encouraged. If the complaint is likely to hit a wall and get nowhere then you may as well say so.

mayb_2

Quite agree with some of your comments dunstonh but you always assume the prior knowledge and understanding of the consumer. If we were all so clever we would not need financial advisors and there are a significant proportion of people who cannot afford financial advisors. I would not agree that the consumers are trying it on - if they knew enough about the policies they would have moved their money before it became a financial black hole. I doubt very much the impartiality of either the FSA or the Government and Financial companies and would very much doubt the integrity of many of the companies involved in misselling of subprime mortgages. Basically the facts remain that both in the case of endowments and subprime mortgages the nearer it came to these blowing up in the faces of the consumer the more of them were sold. The end result is now upon us.

I was posting about the danger of subprime mortgages and 5 or 7 times income mortgages long before this became a financial crisis.

If I knew about it and could see it coming how on earth can the banks pretend they only just found out what they had been buying in to!!!! The information was out there, problems were occurring first in America and then in Spain it was only a matter of time before an implosion.

The advice I was given regarding my own mortgage did not include sending me to an independent advisor, if they could not give me correct advice they should not have given me missleading advice.

An unfair complaint is not one that is timebarred. It is just a timebarred complaint. It may hit a wall but until it does there is nothing to stop anyone making such a claim and explaining their circumstances. Why would anyone not make a complaint within the time bar period if they knew about it and understood the implications? It is more likely that such people were missold as they simply do not understand how this works and just how unfair this system is. Those working the system would not be caught out in this way.

I believe that you and I are polarised on certain issues (and historically have always been so) and this is my opinion and, although it differs from yours I think we both know this is not personal but a difference in attitude and approach.

chivite

I had an endowment with HSBC. With the help of moneysavingexpert letters downloads, I claimed a misselling and HSBC agreed that they had missold my endowment. We agreed a compensation figure and accepted formally. Next I received a letter from them saying that they needed to confirm my identity. They asked me to go to a HSBC branch and present some identity proof. I did as asked and this was 3 weeks ago. I haven't heard from them since. Is this normal? Can anybody give me an opinion of what's going on? are they winding me up?

Many thanks
Elena

dunstonh

chivite wrote: »

I had an endowment with HSBC. With the help of moneysavingexpert letters downloads, I claimed a misselling and HSBC agreed that they had missold my endowment. We agreed a compensation figure and accepted formally. Next I received a letter from them saying that they needed to confirm my identity. They asked me to go to a HSBC branch and present some identity proof. I did as asked and this was 3 weeks ago. I haven't heard from them since. Is this normal? Can anybody give me an opinion of what's going on? are they winding me up?

Many thanks
Elena

Money laundering guidelines mean that your ID has to be checked on maturities and surrenders. So, if you have agreed to surrender as part of it then it's quite normal.

mayb_2

Asking for the proof of identity is ok but as you have now waited three weeks I would be tempted to ask them what is holding the process up.

MYDOGCRYSTAL

Hi
does anyone know if you can still claim for mis sold endowments even if it was cashed in already

many thanks

dunstonh

MYDOGCRYSTAL wrote: »

Hi
does anyone know if you can still claim for mis sold endowments even if it was cashed in already

many thanks

The endowments saga is largely over now with over 3/4 of endowments being timebarred from complaint.

Effectively, you have 3 years from first being notified of a high risk of a shortfall. Or you have 6 years after the event being claimed on.

When did you surrender?

TedinMK

Hi,

I believe i was mis-sold and endowment policy back in 1988 (The 14th to be exact)
It was sold to my by an independant advisor at the time but for Scottish life. i wrote to both about five years ago, firstly to Scottich Life and there response was to contact the person that sold me it. i have also done this but hey ho i have had no response.

I have recently had another Red Alert:High Risk of Shortfall form Scottish Life, but i am writing to find out if i do have cause for redress for being mis-sold this endowment policy.

I spoke to some help line a few years back and was informed that it's not worth pursuing due to time lines, but i read on here many people the have been successful in claiming.

Any response would be greatfully received.

peterbaker

dunstonh wrote:

you have 3 years from first being notified of a high risk of a shortfall. Or you have 6 years after the event being claimed on.

For the benefit of MSE'ers generally, dunstonh, what real legal basis does any endowment provider have for arguing either of those limitations?

My own experience suggests that providers made up the rules for compensation claims as they were brought to book by a few pathfinders and the trickle became a flood.

This was/is no different to a BP oil spill. The companies involved tended to lie, or at least obfuscate, evade and ultimately seek to create their own rules on compensation after mass industry wrongdoing. They sought to cheaply buy off those who did not know their rights. Some even made it a condition of settlement that perfectly good older endowments were surrendered early as part of an overall deal to compensate for the rubbish sold by them in later years.

Due to the fact that a lot of misleading settlements inevitably occurred when policyholders took what they were told was on offer rather than making a fuss, surely there is actually no limitation until perhaps 6 years after the endowment policyholder finally realises that he or she has been ripped off one way or another? I am sure there are tens of thousands still out there who think it's "just life" to get a raw deal from the insurance industry, and who have not pressed claims. MSE has done an awful lot to correct that, but there are still many out there who do not log in to pc's daily to see what's new.

For example, there were a lot of pre-1988 policyholders who were deflected immediately and told they had no claim. Utter balderdash that was too.