Act now on mis-sold endowments: new article

dunstonh

My question is will there be any comeback for the directors?

No.

will they be chased for information

Maybe but not always possible.

or compensation?

No.

will a succesful complaint rebound on them in any way?

Not unless it was fraud.

The compensation paid out by the FSCS is paid by advisors like me. £2k a year cost for paying other people's complaints when I have never had an upheld complaint myself! - argh.

You say you started it in summer 1988. If the advice was given (ie application signed) before 29th April 1988, then the FSCS will not be interested.

silvercar

Arranged the endowment through a friend of my in-laws. The in-laws feel bad that I won't receive any compensation that others can get through the price of a stamp. Especially as it was they that told me to get an endowment because their policy was doing so well (they in fact got a tidy sum 8 years ago). In actual fact I didn't receive any advice as such, just filled in the form for them to pass to their friend.

Application was dated 18/4/88 though the policy started in May.

I guess that's the end of the road. Thanks for a definitive answer.

Just wait for the Standard Life windfall then!

dunstonh

It may not all be bad. Standard Life have suggested they will allow with profits fund holders to move into unit linked funds after DM. If they follow through with that, then the fund range on the unit linked side does offer a range of funds with good growth potential (better than the WP fund). It could all still come good.

aloiseb

Fuming_Gal wrote:

Hi,
I took out an endowment with the Halifax in April 1988. I've made a claim but the Halifax say they did not sell me the policy. They claim it was an independent finance company that is no longer in business (a company I have never heard of). I bought the policy in a Halifax branch, from a lady wearing Halifax uniform and badge. The Halifax say that at that time they had independent financial advisers working in their branches and were under no obligation to tell me this. The FSCS can't look at my case because it was sold before August 1988. I now appear to have no comeback. Any suggestions?

Halifax have recently climbed down on the case in Swansea where an independent conman called Graham Price was working through a Halifax branch and embezzled about 80 people out of their life savings (see http://news.bbc.co.uk/1/hi/programmes/moneybox/4343282.stm - you have to scroll down a bit) - the case was also reported on Watchdog I think. At the end of Nov, after pressure from the media, Halifax did agree to compensate the victims.

therefore might it be worth an email to Moneybox, at moneybox@bbc.co.uk - you never know, they might be able to put pressure on them for this too. I bet you are not the only one it's happened to. hope you get somewhere - i think it's disgusting how they can just wash their hand like this when people are effectively being conned.

Aloise

londondulwich

My mother was sold an endowment mortgage in1989. It was due to mature in 2004. In the 2003 she received a letter informing her that there was a high risk her plan would not cover the target amount. Subsequently there was a shortfall.

At the time of the sale she was 51 years old and by the time the mortgage was paid off she was 66 and past retirement age. The mortgage was sold to her in the light of her having a low income, the adviser thought this was the cheaper and therefore more manageable route.

Taking into account her age I understand that she may have grounds for a complaint. I am unsure if the fact that she has already finished paying for the mortgage affects this right.

Can anyone clarify whether or not she has grounds for a complaint?

dunstonh

Taking into account her age I understand that she may have grounds for a complaint.

Only if she would have gone with a shorter mortgage term to match retirement age and accepted it would have cost more per month.

You already mentioned low income and the cheaper mortgage requirement. Had the term been shorter, could she have afforded the higher mortgage costs?

It could have been mis-sold but going past retirement age is not a mis-sale itself. Many mortgages sold today go past retirement age still. It is the failure to discuss and document that is where the potential mis-sale is. So it all depends on what was put on the documentation.

londondulwich

Thank you for helping.

At the time that she agreed to the endowment mortgage she had recieved money from her divorce sufficient to purchase the property outright.

The amount that she borrowed was £15,000.

I do not understand why she wasn't sold a personal loan based on her being a homeowner.

I will get back to the bank and ask for details of the mortgages they were offering in 1989 as well as details of their personal loans.

I very much appreciate the time you took to answer my query.

dunstonh

I do not understand why she wasn't sold a personal loan based on her being a homeowner.

Secured loans/mortgages are cheaper than personal loan.

webwiz

December14 wrote:

In answer to your question about how someone savvy enough to use this web site is able to complain about mis-selling of endowments I have to say I am. Never at any point during the 'sale' process were we as (I'll admit it) naive 19 year olds, were we advised that the 'funds' would not cover the mortgage. We were told categorically that the mortgage would be paid off.

A further clue is in the title of the policy..."with profits"... what is that if not additional funds payable to the policy holder after the mortgage is repaid.

As to who pays in the end ... if it means that companies mis-selling these products become more responsible and realise that they will be found out and compensation wil be given to those people, then that is the correct thing to happen. As the alternative that is being suggested is that the consumer is left unawares allowing more unwitting people to fall prey to these types of dealings.

I for one am doing my bit to ensure that my child is far more financially astute as a youngster by explaining and involving her in processes which affect her and without the benefit of the expertise and unbiased site of Martin's. Without the site I would still be languishing in ignorance as would subsequent generations.

If you were really told categorically that the maturity would pay off the mortgage plus profits then you were mis-sold. But you don't have to prove that this was said; the seller has to prove that it was not said and it is difficult to prove a negative. If you were mis-sold then IMHO you should have been put in the position where you would have been if you had had a repayment mortgage from the outset. So you should have been converted to a backdated repayment mortgage at the seller's expense. If you have used the cash compensation to pay off some of you mortgage then congratulations to you, you are in a minority. Most have blown it on holidays etc.

I agree with your last two points except that IMHO the vast majority (but not all) of mis-selling complaints are really cases of people taking advantage of the situation and the losers are ultimately not big companies but rather other people who have not made a claim.

muiryden

Standard Life paid me £3.5k (about 10%) after just a few weeks - many thanks, I would never have known I could do this if it weren't for this site.