Act now on mis-sold endowments: new article

don_kedik

So if not aviva, because they now run the policy and cgu are now defunct then who?

dunstonh

don_kedik wrote: »

So if not aviva, because they now run the policy and cgu are now defunct then who?

You complain to the person that originally sold it.

dave8204

Not trying to be smug but I'm sure a lot of people could have saved themselves a lot of hassle if they kept an eye on their finances.
When I bought my Flat I was told the usual by a Lloyds Salesman about Endowments and took one out to cover my Mortgage with the Halifax.A couple of years later I began to invest in Unit Trusts via a PEP.(Forerunner of ISAs) .It didn't take me long to realise that while my unit based Endowment policy and the PEPs I had back then were largely invested in the same companies (mostly Footsie 100 Large Caps)my statements showed the Endowment made 2% one particular year while my PEP made 13% the same year.I had a long think and consulted my Brother,an Estate Agent at the time,who told me of the several small commissions to various people that were built into an Endowment.I went to see the Halifax and asked them if an Endowment was essential as I has PEPS running that were performing much better.Despite what I'd been told when I took out the Endowment the answer was no,"as long as you've got some kind of provision for repayment".I then cancelled the Endowment and received a cheque for the massive amount of £60.At the time I was pee'd off at that being my reward for 5 years of investment but having heard so many tales of woe it seems I did quite well!!
Prior to taking out the Lloyds policy a salesman with Axa nearly sold me one but I smelt a rat when he gave me some seriously dodgy advice while trying to sell me a pension at the same time.Most I suppose would have let it go but I complained to AXA,the guy's Boss first called me then visited me and the end result was he was sacked as a result.
I'm no financial expert,I'm a factory worker and not a particularly skilled one at that,but I did do a bit of research and knew when something wasn't quite right.Maybe if others did the Financial Services industry would have cleaned its act up years ago.

MakeitgoRIGHT

Hi, there.
A friend of mine has lost her husband to cancer and when talking to her about her situation, she said that they have an interest-only mortgage but no endowment to repay the sum when the period expires..... and thus no protection for her husband's death (normally the endowment pays off the mortgage when one dies, I believe).

As it stands, without his income, she will have to sell off the house in the hopes of getting enough to pay the mortgage, and will then have to find rented accom.

Would this constitute a mis-sold mortgage? Or is it perfectly okay to sell a house 'owner' an interest-only mortgage without the endowment to pay it off?

What could she do, if anything?

dunstonh

MakeitgoRIGHT wrote: »

Hi, there.
A friend of mine has lost her husband to cancer and when talking to her about her situation, she said that they have an interest-only mortgage but no endowment to repay the sum when the period expires..... and thus no protection for her husband's death (normally the endowment pays off the mortgage when one dies, I believe).

As it stands, without his income, she will have to sell off the house in the hopes of getting enough to pay the mortgage, and will then have to find rented accom.

Would this constitute a mis-sold mortgage? Or is it perfectly okay to sell a house 'owner' an interest-only mortgage without the endowment to pay it off?

What could she do, if anything?

It is the responsibility of the individual to have their own repayment vehicle. Lenders remind people every year in their statements and a number have also sent out letters reminding people and even checking they have some. However, it is personal choice.

So, nothing you have said suggests mis-sale. How did your friend think the mortgage was going to be repaid?

magpiecottage

Whilst I realise this is a desparately sad situation, I'm afraid DunstonH is correct.

Furthermore, the borrowers will have had annual statements reminding them of the need to ensure a repayment vehicle was in place - and it will have been in the illustrations provided to them at the time.

As I say, it is very sad but I cannot see that it is the fault of the person selling the loan that they failed to heed the warnings.

debt_free_hope

We took out an endowment policy with Gan life which later became Windsor life .This was in about 1992 we cancelled it in 2000 when we purchased another property and all we got for surrender value was 300 pounds .Fortunately our property had increased in value so we were able to pay off the interest only mortgage .We were never told it would not be enough to pay off the mortgage and we were also told we would get extra money on top .I think in 2000 we read there was a problem with endowments but do not remember getting any letters about this.Could we make a claim for a mis-sold endowment .Thanks for any help.

dunstonh

We were never told it would not be enough to pay off the mortgage and we were also told we would get extra money on top .

A 1992 illustration of benefits would probably have had the lowest illustrated projection at less than the mortgage amount. it would also have had the risk warnings about you could get back less than the amount required. So, documents will show the risk warnings. What have you got to back your allegation that you were not told an investment could go down as well as up? Documentation trumps verbal unprovable allegations unless the evidence points to a number of issues regarding credibility (and note that most endowment complaints are rejected - just 24% upheld at the FOS - so its not like PPI where the probability of mis-sale was high)

.I think in 2000 we read there was a problem with endowments but do not remember getting any letters about this.

most endowments were still in surplus in 2000.

Could we make a claim for a mis-sold endowment

You have 6 years from commencement of the policy or 3 years from being reasonably aware of an issue to make a complaint. in your case, the 3 year rule would apply. You surrendered in 2000. So, you had until 2003 to complain. The seller can time bar you from any complaint you make.

debt_free_hope

Thanks for your quick reply .We were never told that there was any risk at the time when we took the endowment out we cancelled our repayment because we thought the endowment would help as my husband had been seriously ill and if anything happened to him the endowment would help .'We had a policy with the same company I think it was a pension before this but because of financial problems due to the illness we missed payments and because of this we lost the critical illness cover .Another adviser said we should not have lost this .
Eventually in 2000 we cancelled both the pension and the endowment and the money returned was minimal compared to what we had paid in .Was this normal is it the upfront costs.We only realized we could consider making a claim because company called mcas got in touch.Do they not know about this time bar .The adviser was a friend of a friend and we thought we were helping them out at the time .If we had stayed with the repayment we would have paid off the mortgage in about 6 years .Thanks again for your help .

dunstonh

We were never told that there was any risk at the time when we took the endowment

What evidence do you have to support that allegation?
1992 documentation was not as good as later years but there were still the risk warnings on it back then. So, what do you have to counter that?

'We had a policy with the same company I think it was a pension before this but because of financial problems due to the illness we missed payments and because of this we lost the critical illness cover .Another adviser said we should not have lost this .

Pensions dont have critical illness cover. It would either have been another life assurance policy or standalone CI plan.

Eventually in 2000 we cancelled both the pension and the endowment and the money returned was minimal compared to what we had paid in .Was this normal is it the upfront costs.

If it was pension, you would not have got money back. It would stay in the pension. Product charges in the 80s and 90s were massive. Typically the first 5 years would see little or nothing back if you surrendered. Quite normal for back then. Not desirable but that is just how it was.

We only realized we could consider making a claim because company called mcas got in touch.Do they not know about this time bar .

EMACS are a well known dodgy company that tell people to put in complaints about anything and everything. Their cold calling sales staff are paid to get people to sign up. They say all sorts of rubbish. You can see examples on this board from people have both received calls from them and those that have had to deal with fraudulent complaints from them. I use the word fraudulent because the reasons given on the complaint template are bogus. So, any attempt to obtain money using false reasons is fraudulent.

.If we had stayed with the repayment we would have paid off the mortgage in about 6 years

Irrelevant I'm afraid. An interest only mortgage does not prevent you paying it off early and whatever you could have done with the repayment mortgage you could have done with an interest only mortgage.

The adviser was a friend of a friend and we thought we were helping them out at the time

You can still complain if you want. The chance of success if low. Nothing you have said indicates you are likely to be successful and the timebar is the main problem you have. However, if you want to complaint, you write to that adviser giving your reasons and copies of any evidence you have to support your view. If they timebar you then its over. If they decide to not timebar you but answer the complaint then a decent client file would be able to reject the complaint easily. A poorly documented client file may have issues. However, going back to the fact it was sold in 1992 and surrendered in 2000, there may not be much documentation left and the timebar would be the obvious solution for the adviser to use.