Act now on mis-sold endowments: new article

Alitigger

Has anyone successfully achieved any recovery for an Endowment taken out before the FSA act actually came into force ?

I took my first one out in 1987, and no-one is interested in resolving in my favour... (following months of tracking defunct companies, and chasing the FSCS etc etc)

My other two (yeah - stupid, I know now...) have received £300 credit (oh whoopee...) and a "promise" which is capped at the life-assured value.
Not a particularly brilliant result all round ...

any advice - I'd appreciate a PM ....

dunstonh

Alitigger wrote:

Has anyone successfully achieved any recovery for an Endowment taken out before the FSA act actually came into force ?

I took my first one out in 1987, and no-one is interested in resolving in my favour... (following months of tracking defunct companies, and chasing the FSCS etc etc)

My other two (yeah - stupid, I know now...) have received £300 credit (oh whoopee...) and a "promise" which is capped at the life-assured value.
Not a particularly brilliant result all round ...

any advice - I'd appreciate a PM ....

End of the road with the pre 88 one.

The ones that agreed to cover the sum assured is a good result. Endowment mortgages are cheaper than repayment mortgages so you have a guarantee to repay the mortgage and be cheaper on the monthly payments. Thats a good result.

£300 on the other probably indicates that it is in a surplus position to where it needs to be or not far off.

dvl

If i want to cash in my endowment policy, how do i do it and what is the best way?
I just want a simple interest/capital mortgage and get rid off the endowment nonsense....."big con if uyou ask me"

Thank you

G

mayb_2

I haven't visited this site for some time and I know I have posed this question before, (I don't remember anyone answering it) but has anyone challenged or does anyone know if it is possible to challenge the legality of the time bar.

If you committed fraud I am sure you could not time bar anyone from prosecuting you in the future. Why is it possible for these companies to declare a time bar and why does everyone have to abide by it? I can see why they would want to do it but that is not for the benefit of the customer.

I think these companies rely on nobody pursuing them into the courts for recompense once the time bar comes in to play so no case law will be created. By directing people through the Ombudsman the chance of cases being taken to court is also lessened This does not mean that it is legal for them to refuse to consider reasonable claims for misselling no matter what the time lapse surely.

defender_of_the_weak

I know of only 3 who have instigated or completed a time bar challenge. The only succesful case was a man called Vincent Cunningham who won his case against Friends Provident but this was in the small claims court and therefore no precedent was set in legal terms. The big problem is that the companies responsible instantly play hard ball and try to get the matter into the higher courts where they can recover costs if they win the case. Faced with the prospect of thousand of pounds in legel fees if you lose, only the most determined will take this risk to recover a shortfall. The FSA, ABI and FOS all sit in their offices and seem to think this is perfectly acceptable that people are treated in this way

dunstonh

Vinny also won because FP used the wrong letter to base their time on. They soon changed that for everyone else. Somone using his route would almost certainly fail now as FP wouldnt make the same mistake twice (well they could but their response to that case indicated they wouldnt).

If you committed fraud I am sure you could not time bar anyone from prosecuting you in the future. Why is it possible for these companies to declare a time bar and why does everyone have to abide by it? I can see why they would want to do it but that is not for the benefit of the customer.

endowment misselling isnt fraud though so you cannot compare.

There have been articles over the years that have given the impression that many advisers would prefer the courts to be used as they feel that documents which the FOS disregard would be used as evidence to support their case. Also, the courts have a lower limit on what can be paid out compared to the FOS. And people could find themselves timed out on complaints that the FOS would consider.

These things can benefit both sides in different areas.

mayb_2

I think if you read some of the stories here dunstonh - the way some people have been missold and misled cannot be called anything else but fraud.

I agree with defenderoftheweak delaying and blocking tactics used to prevent people from obtaining any form of justice is just not right and great efforts are made to stop it being tested in court. If these companies have nothing to fear why do they use these tactics to prevent it from ever happening. Time barring can only save them from paying out on genuine claims for misselling - so it can only be aimed at preventing those people from making a claim. If your claim doesn't stand up to the scrutiny then you were not about to be paid anyway.

dunstonh

I think if you read some of the stories here dunstonh - the way some people have been missold and misled cannot be called anything else but fraud.

Two sides to every story. Most endowments were taken out because they cost £10-£15pm less than repayment mortgages. Back in those days, that was a lot of money and when you had MIRAS (and double MIRAS for a while) it was a very attractive reason to go with endowments. These things seem to be forgotten.

If there was a forum highlighting fraudulent complaints there would be just as many of those too.

mayb_2

What is the other side to the story of the time bar?

When buying a mortgage then as well as now, it is not unreasonable for people to want the most affordable mortgage for their available budget. Some sales people used this as a tool to sell endowment mortgages without explaining the risks involved. Hence the birth of the missale of edowment mortgages. It is, as you have said yourself, the lack of understanding of the product purchased not the need to have an affordable mortgage that creates the missale. Most people would be focusing on the cost rather than the concept of MIRAS etc at the point of sale as they didn't understand those concepts anyway. The bottom line being can I buy the house I want - can I afford the repayments on this mortgage?

Those that did presumably delt with the problems before they happened. They knew what they had bought and whether it was still a suitable vehicle to pay off their mortgage - give them a pension or whatever.

The very questions posed on this site show the continuing lack of understanding of how these things worked and what rights consumers have.

Wouldn't it be nice if as much time and effort was put into informing people as to what is going on, proactively putting things right where mistakes have been made, rather than seeking ways to deny them what may be rightfully theirs.

dunstonh

oh come on. Be realistic.

Of course there were mis-sold endowments but nowhere near the scale indicated or the amount being paid out with redress. The redress method encouraged everyone to complain regardless of whether they were mis-sold or not.

Consumer greed was a big driver as well. The potential for a lump sum at the end was what did it for many as well as the lower costs. Had they been on track for a surplus, do you think they would be complaining now?

Just look at how many people are going in for mortgaged buy to lets. Thats a far riskier transaction than an endowment mortgage but they are still doing it. I wonder how many of these people have made endowment complaints saying they didn't want to take risks with their mortgage. Yet they are doing just that now.

Its very easy to blame and accuse those that sold them back then but its not all one sided. Endowments had never failed to pay a surplus, they were cheaper than repayment (helped by MIRAS to some degree) and you still had organisations like the consumers association and the media recommending them. Many people were walking through the doors and asking for them. They didn't need to be sold. You had parents coming in saying that they wanted their FTB children to have an endowment as theirs paid out loads.

To try and put all the blame at one door is naive. The consumer has to take some blame for it as well and indications are that they haven't learnt the lesson when you look at the numbers going into mortgaged buy to lets.