Act now on mis-sold endowments: new article

dreamylittledream

sainthalo wrote:

Thanks again for your helpful replies. I could still complain to the Law Society though and get them to look into it. If upheld this could provide some evidential bearing on a legal claim which it looks like I will be forced to pursue.

Does anyone know of other people who have had to resort to the court process? I assume I would have to sue for negligence and work my way around the limitation act in that the damages and fact of negligence only accrued recently.

It also appears that I am going to have to do my own calculations - any idea how to do these? Maybe theres another website focussed on this area?

Thanks.

You need to complain to the solicitor in question and be disatisfied with their response before you can refer your case to the Law Society.

Equally as the policy was sold before April 1991 the Law Society have no power to force the firm to award compensation even if they found in your favour.

So whilst I'm not suggesting you'd be wasting your time...

Vinno65 recently won a court case on the 'timebar' issue - negliagance in court however would be subject to the 'balance of probabilities' legal test rather then the more generous complaint handling regieme applying to financial services. I also suspect you would be 'out of time' under the 15 year long stop rule.

BRIAN_2-2

Thanks to this site and with the help of the Which claims proforma letter i have today received a cheque for £2179 , however this is said by the bank to be a full and final settlement if i cash the cheque.

My circumstance are that in 1987 i took out a £22700 mortgage covered by a low-cost endowment policy of £45.17 per month . The sales man that convinced me to take this route used scraps of paper to illustrate the difference between a repayment and endowment mortgage , i recall him drawing circles on the paper to represent that at the end of repayment mortgage there would be no cash returns to me but the mortgage would be paid up in full. He then explained that at the end of the endowment the mortgage would be GUARANTEED to be paid off and there MAY be same cash bonus for me.
Having filled in the Which claim form i asked for copies of my file held by the bank to be sent to me. They returned other papers saying that my claim was upheld however there was NO proof in the file that a GUARANTEE was made for the endowment to pay off the mortgage, and if i wanted my file papers i had to request them again which i did. i have received the papers and there is no copies of the hand drawn illustrations mentioned above , from which i was originally swayed into taking the endowment policy.
I believe that i will have a shortfall of around £5000 when my endowment ends in October 2007. So my questions for advise are ..
1) Is the offer a good one (£2179)
2) should i hold out and send a letter back too my lender explaining not all papers (ie the hand drawn notes ) have been returned to me
3)are the hand written notes of any value even if returned
4) should i stop worrying and winging , accept the offer and think myself lucky i have had anything offered.
I know from other contributions i will get some response, i thank you all in advance.
Brian

dunstonh

1) Is the offer a good one (£2179)

Its not a case of being good or bad. Its a case of paying you the difference had you been on repayment mortgage.

2) should i hold out and send a letter back too my lender explaining not all papers (ie the hand drawn notes ) have been returned to me

Hold out for what? Your complaint has been successful and the redress calculated in accordance with the FSA guidelines. There is nothing else to hold out for unless you think the calculation is wrong.

3)are the hand written notes of any value even if returned

They can only reverse the claim against you. You have already had it upheld, so why risk it?

4) should i stop worrying and winging , accept the offer and think myself lucky i have had anything offered.
I know from other contributions i will get some response, i thank you all in advance.

This isnt a game of poker between you and the advicing company. They have agreed that you were potentially mis-sold and are paying you redress.

BRIAN_2-2

THANK YOU DUNSTONH for you quick plain english common sence reply, just what i wanted, i think ill cash the cheque and put it into my cash isa let it gain some interest till time comes that my mortgage ends next year, hopefully i wont be too short to pay it off.
thank you

sainthalo

dreamylittledream wrote:

You need to complain to the solicitor in question and be disatisfied with their response before you can refer your case to the Law Society.

Equally as the policy was sold before April 1991 the Law Society have no power to force the firm to award compensation even if they found in your favour.

So whilst I'm not suggesting you'd be wasting your time...

Vinno65 recently won a court case on the 'timebar' issue - negliagance in court however would be subject to the 'balance of probabilities' legal test rather then the more generous complaint handling regieme applying to financial services. I also suspect you would be 'out of time' under the 15 year long stop rule.

You're quite right re the Law Society, just wondered if it would provide some evidential value however it of course could provide the same for the solicitor... so not a good idea.

On a balance of probabilities i hope we would win if the only evidence was our witness statement recalling the sale of the endowment policy. We're sure there was no risk assessment and a guarantee to pay it off was promised. Also because the policy holder has no clue about investments and was sold this collaterally to a conveyance. I also think the fact the FSA (if in their ambit) would handle it in a certain way which presumes negligence lends some weight to the fact these policies were very often missold. All in all that would be a case I would be very willing to issue a claim on.

I do need to look into the limitation side more. We only discovered this shortfall and realised the misselling recently so doesnt time to sue for negligence run from then (ie 3 years from the date of discovery of negligence).

Please could you tell me about the 15 years long stop rule as i have never heard of it and also is there any further info on vinno65s case.

Thanks again.

madkingsoup

My boyfriend's claim is in the hands of the FSCS.

He got his endowment mortgage in September 1988 (phew!) and by the look of it he was disgustingly mis-sold. Promised an extra £20k on top of paying off his mortgage; no financial evaluation; no explanation of risks; no explanation of the difference between endowment and repayment etc etc etc. He basically didn't even have any paperwork from the IFA - just the mortgage document from Woolwich, and the endowment document from Norwich Union.

Now, here's the crux: long before I met him he had a total breakdown and during that period chucked out a load of paperwork.

He's lucky he met me as I am utterly anal about paperwork and went through everything he had to get all in order. I found a gap in his paperwork from 2001 to 2003, which corresponds with his unfortunate period of mental confusion. The first letter from NU after the breakdown (September 2003) said that the endowment wouldn't pay off the mortgage (although NU's red letters don't draw much attention at all to the importance of their content, and could easily be passed over as a normal communication). Consequently, I told him to get a bloody move on and we got a letter off to NU in April 2006.

NU wrote back very quickly to say that it was sold by an IFA and passed the complaint on to the IFA's company's successor, and sent us all their documents for the endowment.

The IFA's company's successor wrote to say that although he had bought the company, he hadn't bought its liabilities. The original IFA is no longer registered with the FSA and his FSA number isn't linked to any company currently in existence. (I should add that the IFA wrote back two letters. The first was disjointed, with gaps in the middle of sentences and spelling errors - it looked to all the world like he'd totally widdled himself when he received it and had to deny liability as quickly as his grubby little fingers would manage! The second, a week or so later, was the same letter but in proper, unpanicked English...)

So we have now put the matter in the hands of the FSCS. And we get back to the crux - what if the FSCS finds that NU had sent a red letter during the 2001-2003 period and it had been chucked out in a fit of mental disturbance? Or, put another way, can you get round the 3 year deadline with medical evidence?

Either way, he's probably going to have to wait ages to find out, but it is playing on my mind.

dunstonh

So we have now put the matter in the hands of the FSCS. And we get back to the crux - what if the FSCS finds that NU had sent a red letter during the 2001-2003 period and it had been chucked out in a fit of mental disturbance? Or, put another way, can you get round the 3 year deadline with medical evidence?

Dont worry about that unless it happens. Wait to see what the response is first.

It should be noted that NU are not saying the endowment will not pay off the mortgage. They are giving some examples of what you may get back if certain rates of returns are achieved. You are fairly lucky that the endowment is with NU and taken in 1998. This means that it still has good potential to achieve target and potentially hit surplus (assuming 25 years). If less than 25 years, it would be a lot less likely.

alec999

Need Advice?

Have I any recourse from the ombudsman decision?

In 1987, I took out a Standard Life Policy through Abbey National (as agents) for £24,750. Early 2000 I wrote to Abbey and Standard Life and each one blamed the responsibility on issuing the policy on each other. In the end I wrote the following letter to the ombudsman on the 11/11/2003:

My complaint is that I believe I was given bad advice by the Abbey National Agent.

At the time of buying my first house I was single with no dependents, in full time employment and with the added bonus of shift allowance. Before seeing the Abbey Agent I had decided to sign up for a repayment mortgage. However, after seeing the Abbey Agent and hearing how wonderful the Endowment Mortgage was - low cost repayments, mortgage completely repaid at the end of the term and a lump sum at the end of the term. I therefore agreed to this type of mortgage. AT NO TIME during the "sell" was I told of the pitfalls i.e. if the markets don't perform well that the mortgage may not be covered and there would be no lump sum at the end of the term.
Standard Life required that I have a medical, carried out by an independent doctor. I accepted the endowment premium being offered by Standard Life in 1987, as I believed that everyone who took out a £24,750 loan would be paying the same premium. I was not advised that the the monthly premium included a 25% loading because I am diabetic. All I received from Standard Life was a total premium to be paid each month of £42.50. It is only this year that I finally realised that there has been a 25% loading (£8.40 per month) for over 16 years - any non-diabetic would be paying £34.10 per month.
Although diabetic monitoring was still being pioneered/developed in late 80s' and 90s', I find it very hard to accept that I have been paying over the odds on premiums, when, in today's society, car insurance firms treat diabetics the same as normal people when quoting car insurance premiums. Today's monitoring of diabetics by GPs' and Hospitals is now very high.

Questions I have to ask:
1. Have I been paying the excessive premiums for years from a 1987 doctor's report?
2. Was Abbey National's advice in 1987 wrong in advising me to take out an endowment mortgage, given my condition and status at the time?
3. Would I have been better off taken out a repayment mortgage?

The decision by the ombudsman was there was no case!

Is there no more action I can take before I am too late?

alec999

Plus now I will have a £7.00K shortfall in my policy

madkingsoup

dunstonh wrote:

Dont worry about that unless it happens. Wait to see what the response is first.

It should be noted that NU are not saying the endowment will not pay off the mortgage. They are giving some examples of what you may get back if certain rates of returns are achieved. You are fairly lucky that the endowment is with NU and taken in 1998. This means that it still has good potential to achieve target and potentially hit surplus (assuming 25 years). If less than 25 years, it would be a lot less likely.

Oops. Typo - that should have been 1988, not 1998. _pale_