Act now on mis-sold endowments: new article

steveb69_2

I cant see the relevance of time bar being applied after red warning of poor performance, regardless of returns its the product thats at fault, they simply should not have been devised!

Typically an individual took a loan out on the biggest purchase of their life, the roof over their family's head!

By gradually paying off the loan over the term the individual wouldprotect their home,by reducing exposure to rising interest rates, reduce chance of negative equity, reduce chances of failing to repay interest incase sick or redundant or dead, have greater equity to carry forward when moving home thus giving greater range of mortgages & greater range of homes as you have more money to spend, all this along with not lining the banks pockets by reducing interest payable to them. Its a no brainer!

Instead typically an individual was told to pay interest only & gamble the capital repayment element away on the stock market & risk all the above issues for 25 years!

They may have been told that rather than invest in a flexible stocks & shares PEP/ISA with low cost term assurance, why not combine it into an endowment with profits funds that insurers have control over & like to use for other expenses & claims, along with being charged unknown life cover costs through the policy along with other fees & charges that are all hidden in the total policy cost! And when the stock market has peaked & interest rates are rising, no, you cant cash it in like any other investment & pay off your mortgage, as you will lose out on terminal bonuses & have penalties applied. In addition huge upfront commission are payable on endowments that would not usually be paid on other unitised investments likes PEPs, unit trusts or ISA's.

Regardless of returns , has there ever been a mortgage endowment that was not mis-sold ,what could possibly outweigh the disadvantages of being tied into an endowment contract?. I would be interested to know of anyone that feels they were correctly advised to take one out.!

magpiecottage

steveb69 wrote: »

Regardless of returns , has there ever been a mortgage endowment that was not mis-sold ,what could possibly outweigh the disadvantages of being tied into an endowment contract?

Given that I have rejected complaints about mortgage endowments that have gone on to be rejected by FOS, I would say "yes".

With hindsight, it might have been better to have done something different but with hindsight I would have won the Lottery every week since it started!

dunstonh

I cant see the relevance of time bar being applied after red warning of poor performance, regardless of returns its the product thats at fault, they simply should not have been devised!

The vast majority of endowments taken out hit and went past target.

Regardless of returns , has there ever been a mortgage endowment that was not mis-sold ,what could possibly outweigh the disadvantages of being tied into an endowment contract?

Only a minority of endowment complaints were upheld. A significant minority and many that were, were due to paperwork being destroyed or gone missing rather than actual mis-sale.

I would be interested to know of anyone that feels they were correctly advised to take one out.!

In my experience, most people took them out because they were around 10% cheaper per month than a repayment mortgage. So, if you take a typical £20pm saving over 25 years, that is £6000 cheaper than a repayment mortgage. So, even if that person ends up with a £4000 shortfall, they are still £2000 better off. Plus, finding £4000 at the end is usually a lot easier for people than finding that £20pm at the start.

Product is now obsolete but you shouldnt re-write history looking at it from a modern perspective.

Doooford

Just a quick one, I'm just putting the feelers out on this.
In a nutshell, my mother got an endowment policy 15ish years ago when taking out her mortgage. 5 years ago my father passed away (as the main wage earner) and after the endowment payout the mortgage was left at £30k. I'm checking details with her tonight but seems to fit the mis-selling guide. Because of the time passed, is there any chance in claiming?

Just to clarify a couple of things, the reason this wasn't dealt with at the time was due to the death in the family and the reason I'm looking at this is due to my mother being mid chemotherapy seessions and is not up to it.

Many thanks for any advice or thoughts :-)

dunstonh

In a nutshell, my mother got an endowment policy 15ish years ago when taking out her mortgage. 5 years ago my father passed away (as the main wage earner) and after the endowment payout the mortgage was left at £30k. I'm checking details with her tonight but seems to fit the mis-selling guide. Because of the time passed, is there any chance in claiming?

I dont follow how that can fit any mis-selling guide. Would you care to elaborate where you think it does?

Doooford

dunstonh wrote: »

I dont follow how that can fit any mis-selling guide. Would you care to elaborate where you think it does?

Hi, that background is irrelevant I suppose. The main points are that she was told that the payout was guaranteed to pay of the remainder of the mortgage and was told that it was a "wiser" choice to get it over paying off the mortgage.

dunstonh

that background is irrelevant I suppose.

It isn't. It may be the difference between there being a timebar or not.

The main points are that she was told that the payout was guaranteed to pay of the remainder of the mortgage and was told that it was a "wiser" choice to get it over paying off the mortgage.

If she has the documentary evidence then its a strong complaint which would likely be upheld. However, if there is no documentary evidence and its just a verbal accusation (even if she was told that) then it would not likely succeed unless there was an admin failure at the sellers end.

However, you say your father passed away. So, the endowment did it's job and paid out and given that endowments were typically cheaper than repayment mortgages, it is hard to see how it could be classed a mis-sale. She is better off because of the choice to use an endowment.

The endowment would have been set up for the same amount of the initial borrowing. If there was a shortfall at death it would either be because your parents got into arrears at some point or they borrowed a further amount but didnt increase the endowment cover or didnt take out extra life assurance (if repayment basis).

magpiecottage

Doooford wrote: »

my mother got an endowment policy 15ish years ago when taking out her mortgage. 5 years ago my father passed away (as the main wage earner) and after the endowment payout the mortgage was left at £30k.

Quite apart from the comments of DunstonH, this can be a timebarred.

Clearly it is more than 6 years since the loan was taken out and it is more than 3 years since she found out it was not enough to clear the mortgage.

lisajaynec

Hi
Don't know if anyone could help but submitted a claim for miss sold policy from 1990 last month to have my claim turned down due to time bar. I was also turned down as the rep advised us to cash in our 2 other endowments (i was informed this wasn't time bar), but they have produced a copy of a form signed by us that says we have no other policies, which is a lie. I can honestly say that we didn't sign that form, i think we signed a form and the advisor filled in the other parts afterwards. I was 6 mths pregnant at the time young and naive and believed everything we were told by financial services. I can prove that I had 2 endowments that were running 3 years and 1 year before this re-mortgage. I have wrote and asked them to reconsider but if i get turned down is it worth taking it to the FOS. I think it doesn't help that we didn't cash in the other 2 endowments straight away as the new endowment didn't require payments for 5 years. I have now cashed in or sold all the endowments and changed to repayment mortgage.
Thanks any advice gratefully received

magpiecottage

lisajaynec wrote: »

Hi
Don't know if anyone could help but submitted a claim for miss sold policy from 1990 last month to have my claim turned down due to time bar.

That is quite common now.

I was also turned down as the rep advised us to cash in our 2 other endowments (i was informed this wasn't time bar), but cornhill have produced a copy of a form signed by us that says we have no other policies, which is a lie. I can honestly say that we didn't sign that form, i think we signed a form and the advisor filled in the other parts afterwards.

First you say you didn't sign the form, then you say you did but the adviser changed it afterwards. If I was dealing with your complaint, I would have to ask myself what is most likely to be true and contradicting yourself in the same sentence immediately makes me question the reliability of your testimony. In view of the clear written evidence to the contrary, I would not find your claim sufficiently persuasive to make me uphold your complaint.

I have wrote and asked them to reconsider

Nothing you have said here suggests the decision was wrong.

if i get turned down is it worth taking it to the FOS.

It is your right to ask but if FOS decides the timebar has been correctly applied it will not investigate.