Act now on mis-sold endowments: new article

dunstonh

Can anyone advise if I can claim on a non-mortgage linked endowment policy.

Not using the same process. Mortgage endowment complaints are mostly based on the premis that you should have gone with a repayment mortgage rather than an endowment mortgage. That isnt possible if you havent got a mortgage linked to it.

I was advised to take this out by a broker, cancelling a whole of life policy. The point is: it was not linked to an mortgage, just as a better way to save.

A whole of life policy is not a product that is designed for saving. So, if you thought it was and the adviser changed you over, then he was correct to do so. There are certain disclosure requirements with cancellations but if the advice is correct, then missing a disclosure or two may not result in an upheld complaint if the disclosure is not related to the area of your complaint.

It performed badly, and it matured a few months ago.

Investment performance is not grounds for complaint. The product has to be incorrect. Whilst endowments are obsolete and have been for about 8 years now, they were the main product for small contribution savings plans before that. Many tied agents only had that option available and a tied agent can only sell what they offer.

There is nothing in your post to suggest it was a mis-sale.

Dragon_Lady_3

Hi,

A short version of a long story.........My husband was made bankcrupt and was discharged in 1996. To save our house we had to re-start our Mortgage with a endowment. This meant that we lost all we paid before [about 9 years worth of payments]. :mad:

We took out the endowment for £55,000 this being the amount of the Mortgage. This was done through a Financial Advisor.

Anyway, [rambling on a bit there] do we try and make our claim from the Financial Advisor or from the company with whom the endowment is with?

Hope you can offer some advice.

dunstonh

Anyway, [rambling on a bit there] do we try and make our claim from the Financial Advisor or from the company with whom the endowment is with?

The advising firm.

mikeywills

Hi,

I asked a few months ago for advise on getting money back from a endowment on behalf of my PIL. The bank in question Lloydstsb have come back and made my PIL an offer based on the bank not holding sufficient information to prove that my PIL were not missold.

I would like to thank Dunstonh and others for their advise, and to ask one further question. The bank say in their letter the offer is their final offer, what I would like to know is how they have arrived at the figure they are offering.

I understand that they take the cost of an equivalent repayment mortgage, but its how they work out the repayment mortgage costs that I would like to know. Do they work out the exact amount that would have been accumilated based on interest rates over the previous 15 years or do they use a comparion based on a interest rate at that time which is fixed for the 15 years?

Does anyone know or is there somewhere I could go and check for myself.

Many thanks

Beate

Please bear with me if any of my questions have already come up, at the moment I lack the time to read all 31 pages, don't shoot me.

My boyfriend's situation is as follows:

In 1990 he went to Abbey and asked for a mortgage. They advised him to take out an endowment mortgage because the benefits at the end of the mortgage would be better than with a repayment one. He was told that the endowment policy would unquestionably not only pay the entire mortgage off but would also leave him with a profit. He had this policy until about 1996, when he was phoned up by either Abbey or the policy holding insurance (he doesn’t remember which) and told that the policy would not mature with sufficient capital to pay off the mortgage. There would be a large shortfall so he should switch over to a repayment mortgage. So he did that. As he was in arrears with the mortgage payments, any money from the surrender value was used towards paying off the shortfall in his mortgage payments. Last year he sold his house and paid the remainder of the mortgage off and is now renting. He was blissfully unaware about the fact that he has almost certainly been mis-sold this endowment mortgage until I told him a few weeks ago, having read about it on this website.

He has sent off a complaint letter to Abbey to which they responded by sending him a long Questionnaire, a Mortgage History Form and a Letter of Authority to fill out and sign. In it it says in bold letters “Please return the signed and completed documents using the enclosed pre-paid envelope, within 14 days of the date of this letter. Failure to do so may affect our ability to fully assess your complaint.”
Can they pressure him like that? The date on the letter is 22 January which basically gives him the remainder of this week to fill all the stuff in they want to know about, and I find that is a pressure they should not put him under.
Also, a woman from Abbey phoned him up today and discussed his claim with him despite him saying she would get his documents shortly. Is that a good or a bad thing? If I had been there I would probably have told him to tell her he will not discuss this on the phone. Apparently, when told which insurance company the endowment policy was from, she claimed that that was strange as they were not using them at that time.
Also, will the fact that he was contacted, albeit years later, and advised to change to a repayment mortgage because the endowment policy would not pay off the mortgage after all, be detrimental to any claim he makes? They still mis-sold him the endowment, that remains a fact.
Last question: he has to fill in a Letter of Authority where it says “I understand that if my mortgage is with another provider, Abbey may need to contact them to obtain information and/or figures to help resolve my complaint.” I don’t know why he has to fill that in at all as the mortgage is paid off and never was with anyone else, but the real question is: Which address do they want for “Customer address”: the old one the mortgage was for or his current one?

Any help will be greatly appreciated.

dunstonh

He had this policy until about 1996, when he was phoned up by either Abbey or the policy holding insurance (he doesn’t remember which) and told that the policy would not mature with sufficient capital to pay off the mortgage. There would be a large shortfall so he should switch over to a repayment mortgage. So he did that. As he was in arrears with the mortgage payments, any money from the surrender value was used towards paying off the shortfall in his mortgage payments. Last year he sold his house and paid the remainder of the mortgage off and is now renting. He was blissfully unaware about the fact that he has almost certainly been mis-sold this endowment mortgage until I told him a few weeks ago, having read about it on this website.

No endowments were running short until around 1999/2000 so one cancelled in 1996 is unlikely to result in a redress payment. Especially as the repayment mortgage was more expensive in many of those years (as well as getting MIRAS).

Can they pressure him like that? The date on the letter is 22 January which basically gives him the remainder of this week to fill all the stuff in they want to know about, and I find that is a pressure they should not put him under.

That isnt pressure. Thats a request for information and letting him know if he doesnt respond, it will hold up the review.

Also, a woman from Abbey phoned him up today and discussed his claim with him despite him saying she would get his documents shortly. Is that a good or a bad thing?

doesnt mean anything one way or the other.

If I had been there I would probably have told him to tell her he will not discuss this on the phone. Apparently, when told which insurance company the endowment policy was from, she claimed that that was strange as they were not using them at that time.

Obviously, if it wasnt bought from them, it would have an impact on the outcome.

Also, will the fact that he was contacted, albeit years later, and advised to change to a repayment mortgage because the endowment policy would not pay off the mortgage after all, be detrimental to any claim he makes?

I have to be honest here and say that I do not believe this bit. In 1996 there were hardly any concerns about endowments and no-one even dreamt of shortfalls. The insurance company wouldnt phone up and tell you to cancel your own policy and the lender wouldnt review it like that.

Also, will the fact that he was contacted, albeit years later, and advised to change to a repayment mortgage because the endowment policy would not pay off the mortgage after all, be detrimental to any claim he makes?

Yes it would. You have three years to complain from knowing about the high risk of shortfall. He took action in 1996, so the timer ran out in 1999.

Last question: he has to fill in a Letter of Authority where it says “I understand that if my mortgage is with another provider, Abbey may need to contact them to obtain information and/or figures to help resolve my complaint.” I don’t know why he has to fill that in at all as the mortgage is paid off and never was with anyone else

Put that there was no other mortgage.

but the real question is: Which address do they want for “Customer address”: the old one the mortgage was for or his current one?

The current one unless they are asking for previous addresses.

Any help will be greatly appreciated.

Being totally frank and looking at your post without any emotion attached to it one way or another, the story is full of holes and doesnt add up. Its like a friend told a friend told a friend etc and its changes the story a number of times.

If the complaints handler thinks the same they could easily kick this complaint into touch if that is how the complaint has been put to them.

If you are going to complain, dont contrive any stories or dont make anything up or try and make a guess at what happened. If you cant recall then say so. If you have created a story that you think happened and a number of the areas can be shown to be wrong or lies (not saying it is the case here) then when it comes to areas which cannot be proven one way or the other and a judgement call needs to be made by the ombudsman, then they are more likely to go with the side that hasnt been caught out in other areas.

A complaint should be simple, direct and to the point. Dont pad it out and dont guess or make up a story as it can do more damage than good.

It also helps not be difficult at this stage with the complaints handler as it will be noted and could work against you.

My reponse is not meant to sound harsh but i have written it without any emotion attached to it and that makes it appear harder than i wanted.

dunstonh

I would like to thank Dunstonh and others for their advise, and to ask one further question. The bank say in their letter the offer is their final offer, what I would like to know is how they have arrived at the figure they are offering.

I understand that they take the cost of an equivalent repayment mortgage, but its how they work out the repayment mortgage costs that I would like to know. Do they work out the exact amount that would have been accumilated based on interest rates over the previous 15 years or do they use a comparion based on a interest rate at that time which is fixed for the 15 years?

Does anyone know or is there somewhere I could go and check for myself.

The letter should show the figures used to calculate the redress payment and how they came by those figures. If they have used the FSA approved calculation (often referred to as mortgage fundamentals) then there is no reason to question it unless the figures input appear wrong.

In basic terms, they compare the monthly cost of the repayment mtge vs endowment (that usually works against you as endowment mortgages were usually cheaper) and they take the surrender value of the endowment and use that to offset against the endowment mortgage balance to compare against the repayment mortgage and what the outstanding balance would have been at that point (that works for you as its the lower surrender value used and not the higher current value). The difference, if any, results in a redress payment.

Beate

Thanks for the response. My boyfriend told me the story exactly like that. He is currently sifting through tons of paperwork to try and find all the proofs. I know where you are coming from, it sounds weird that they would contact him to back-track, but that's what he says happened. And I don't know whether his memory is simply failing him here or not. And if it happened like that, you say he can't put a claim in as the time of changing mortgages counts as the time from when he supposedly knew he was mis-sold and should have complained? Oh dear.

billyand

I am looking for help-is it worth my time to persue compensation for a mis sold policy-through Abbey National-as I have tried to get compensation in 2001. as there was no real guide lines then and I made a botch of the claim. It was turned done by the Ombudsman.Is it worth trying again? The other down factor is it was taking out in April 1986. I was a very naive single mum at the time desperate to get a mortgage and believed every thing i was told by the Abbey adviser. Any help would be appreciated

dunstonh

It was turned done by the Ombudsman.Is it worth trying again?

You cant take a second bite of the cherry. You have a limited time to appeal an FOS decision and unless you have been in hospital in a coma since then, they will not re-open the case.