Act now on mis-sold endowments: new article

defender_of_the_weak

Mayb

The points you raise are precisely those that make time barring unfair. if a company says they wrote to you this is accepted by FOS but if you say you wrote to them they insist on proof of delivery or dismiss it.

Annieb

Not having a mortgage does not mean you cannot make a claim it only changes the date on which redress (if any) is calculated

looneyleo

Have just complained to the NAAFI about our endowment and have received the Endowment Mortgage Questionnaire back. Just wondered if you guys could cast your eyes over the facts and let me know if we have a case...and also any hints on completing the form...

Endowment taken out in 1994 following advice from HM FORCES advisor.
Term 25 years
Target £40,000.00
Company: Scottish Ammicable now Prudential.

At the time I was engaged and planning on buying a house in a few years time but didn't have a mortgage. I genuinely wasn't told the endowment might not reach target.
In 1996 we bought our house on endowment mortgage.
We got twitchy in 1998 about endowments so swapped mortgage to a repayment mortgage but kept endowment going as a savings plan to pay off mortgage early (Still the plan now)
2002 got first black letter from Scot Amm. saying significant risk of not meeting target
January 2004 got first black letter from Prudential saying won't meet target
Dec 2004 got first red letter from Pru saying won't meet target.
On last letter from Pru it did say there wasn't a time limit on the complaint. Currently projected to make a £5500 shortfall.

Any advice would be appreciated...many thanks.:beer:

dunstonh

2002 got first black letter from Scot Amm. saying significant risk of not meeting target
January 2004 got first black letter from Prudential saying won't meet target
Dec 2004 got first red letter from Pru saying won't meet target.

95% of Scot Am policies have hit target and paid a surplus last year and they are on track for 96% this year. I think you need to read the documentation again as I highly doubt Pru would tell you it wont hit target. Especially given their very good track record.

The last few years projections should have seen an improvement with many more moving back to surplus. There is an expectation that Pru/Scot Am plans of 25 years or more will result in a surplus. Although nothing is guaranteed.

looneyleo

dunstonh wrote:

95% of Scot Am policies have hit target and paid a surplus last year and they are on track for 96% this year. I think you need to read the documentation again as I highly doubt Pru would tell you it wont hit target. Especially given their very good track record.

The last few years projections should have seen an improvement with many more moving back to surplus. There is an expectation that Pru/Scot Am plans of 25 years or more will result in a surplus. Although nothing is guaranteed.

Thanks Dunstonh. What I have stated is correct...I have kept all the correspondance from the start of the plan. There has been an improvement in the last couple of years but last letter which was only last week from the Pru said we are still on an AMBER and have a projected short fall of £5500. Are you saying that we shouldn't go for compensation as I thought the compensation was about how we were mis-sold the endowment and not on it's actual performance??? I have no intention of stopping the endowment as it will take a significant chunk off the mortgage in 13 years and I do expect it to perform overall. Thank you for your comments

dunstonh

are you saying that we shouldn't go for compensation as I thought the compensation was about how we were mis-sold the endowment and not on it's actual performance???

If you were mis-sold, then you were mis-sold. However, the performance does come into it.

For example, would you be considering complaining if the endowment projections were showing a 10k surplus? If you are complaining because of performance alone, then your complaint will be rejected as that is not valid grounds for complaint.

Another issue is that you dont get paid compensation. You get paid redress to put you in the position you would have been had you gone with a repayment mortgage. This takes into account the surrender value of the endowment. If the endowment is on track to where it needs to be to hit target on maturity then the it is not likely to result in much or any redress payable. The better endowments often result in people getting complaints upheld but no redress payable. I know of one case where someone used a complaints company and got paid 96pence redress as she was 96p worse off but had a bill for over £800 from the claims company she had used. She would have been better off checking out the quality of the endowment first and then deciding not to claim.

Your question was do you have a case. Well, we cant really answer that because we dont know what was said and more importantly what was documented. There are four sides to every story, what you say happened, what they say happened, what really happened and then how that is then interpreted.

You have put the complaint in and its now a wait and see. One flaw in the system means that if the complaint is upheld, you will actually be made better off financially as the calculation would use the 2002 value which would be lower than the current value. Had you kept the endowment linked to the mortage and the complaint was upheld, you would get less. (this is not with all endowments but would be with the better ones).

looneyleo

Thank you for your comprehensive answer! Few things:

1) I haven't put in a complaint yet fully, I have the form in front of me but wanted to seek advice from the MSE crew before I started.
2) I'm doing this all myself so won't have any fees to pay to anyone else.
3) the performance of the plan at the moment is under-performing against target.
4) We were not told at the time that there could be a shortfall.
5) You are right...if the policy was 10k up, I would probably not be complaining...but that is the whole point...it isn't 10K up it's 5500 down.
6) Surely I have nothing to lose by complaining... OR DO I???????

I really appreciate your answers as it's great to have a devil's advocate before I complete the form...would love to hear your responses....

mayb_2

If you did not understand how endowments worked and you were not advised at the time that it may not pay the target amount you were missold this endowment. That is what misselling is all about surely. The average shortfall, according to the FSA a couple of years ago, was 5000 (ours was 4 times that amount but the company paid up without our having to go to the FOS). You may find that the company accepts your claim - and you may not need to take this to the FOS at all. When you are filling in your form you would probably be asked what you knew about stocks and shares etc. Don't forget that although you got jittery in 1998 you did not have any knowledge of this when you took out your endowment. You would have made financial plans based on your expectations of a 40,000 return on your endowment whether or not it was attached to a mortgage at the time. You may not get much but every little helps.

Happychappy

I wish I was able to pursue a claim for misselling, I have an endowment mortgage through Standard Life which was taken out in 1984 and is due to "mature" in 2009, unfortunately it will not reach the magical claims of doubling your money that the Independent Financial Advisor said as he sat down and explained why I should take an endowment and only fools go for a repayment ?

Unfortunately as usual the salesman was lining his own pockets with commission and I am left with a shortfall.

The IFA and his many associates similar to the mafia, went bust in the late 90's and went their seperate ways as IFA's, therefore the firm as in bent, no longer exists and the Building Society say, not our fault guv, you were miss sold by someone else.

Standard life and the Building society the Derbyshire both wash their hands and the IFA's wring theirs in pleasure except one who was sent down for fraud, but at least he got three square meals ; (

mayb_2

Is it not the Company that you had your endowment with that you make your claim against rather than the actual IFA? I am not saying it is I am just asking the question because to me that makes sense. Would they not have dealt with the paperwork presented to them by the IFA and approved your application for the policy etc?

If they wont deal with you you can speak to the Ombudsman because some of the larger companies have an agreement with the Ombudsman service to handle cases pre 1988. He will be able to tell you if Standard Life is one of them.

By the way I have just copied this off of the Standard Life website - did you get your money when they demutualised- perhaps your endowment was part of the with profits fund they are talking about here.

Am I eligible for demutualisation shares?
Generally speaking, you are an Eligible Member if, at the time we demutualised (10 July 2006), you are the Member for a policy which started on or before 30 March 2004 and which has been continuously invested in with profits with Standard Life from 30 March 2004 up to 31 May 2006 - the date of our Special General Meeting (both dates inclusive).

looneyleo

Thanks for all your comments guys. We have complained to the NAAFI (Forces Financial Advisor) who have passed it on to their solicitors who have sent us the form to complete. I genuinely believe we were mis sold and as you say Mayb even if we only get a couple of hundred pounds...it is better than nothing and worth filling a form out for. we are only at the very early stages so I'm not sure how it will all go yet. We did get demutualisation shares from Scottish Am years ago by the way. Thanks for all your help and I'll crack on with the form today!