Act now on mis-sold endowments: new article

Sinik

I was recently recommended this site, read about the endowment mis-selling, and recognized that I have also been a victim. As a naive 22 year-old when I was sold the plan was told that it would pay the mortgage and should also give me a surplus pay-out, and that's why endowments were so popular. So, I followed the useful links to formulate a letter to Friends Provident.

I quickly received a response from FP informing me that I am out of time to make a complaint and have lost my right to any compensation due.

Now I know that they sent me letters in 2000 and 2002 warning of a possible shortfall, however not really understanding what to really do or how to go about it, plus one of their options at the time was "Wait and See", (plus working an 70-80 hour week at the time), that was the easiest option and is exactly what I did. They say that a leaflet accompanied their letter saying that the "wait and see" option should only be considered as a "sensible option" by policyholders whose re-projection letter showed a potential surplus at the 8% growth rate, and that as mine did not, the leaflet made it clear that this was not a suitable option for me. Of course, I cannot remember whether or not they sent this leaflet, but even so, why did they even put "wait and see" on my letter detailing the projected shortfall of my plan if this was unsuitable? I'm sure that many others also saw this as the "easier" option and did nothing.

My original planned target amount was £57,000. In 2000 the plan update advised that with investment growth at 4% the potential shortfall would be £22,600 (nasty) , 6% £13,100 (bad), 8% £900 (not too much). By 2002 the plan update potential shortfall showed at 4% £23,800, 6% £15,800 and at 8% £5,700. At the end of 2006, assuming growth of 4% £26,200, 5.5% £22,200 and at 8% £14,300 (alarming given that the plan hasn't performed at anything like this rate so far).

Now I know that performance of the fund (or lack of!) is not grounds for complaint, but do I have any recourse over the time cut-off? Friends Prov and others must still know that many people like myself were mis-sold policies but weren't sharp enough to react/complain when initial warning letters were sent out, and are no doubt breathing a sigh of relief that they have got away with paying compensation to people in this position.

Any advice as to what I can/should do (sadly I can't time travel else I obviously wouldn't be in this position now!). Many thanks.

dunstonh

Now I know that performance of the fund (or lack of!) is not grounds for complaint, but do I have any recourse over the time cut-off?

Most of FP endowments are time barred now and they finally seem to be enforcing that within the rules. It can be overuled in extreme cases. Such as being in hospital or lost on a desert island.

Some of the FP plans have access to their unit linked fund range and these offer far greater potential for future returns. If they are available to you, then it would be worth investigating these and switching your funds accordingly. There is no charge where this option is available.

ANNIEHAHA

Hi if anyone can help i'll be really grateful
my husband had 2 endowments before he met me and surrendered them 3 years ago when we moved
1 was standard life and the other allied dunbar(sorry if spelling is wrong)
he threw the paperwork out and I would like to know where to start with this as I am in new to all this mortgage stuff and would like to help my husband claim his money back
I would be really grateful if you can give me some leads to go on

CHRISM_3

some 5 years ago i instigated the endowment complaints procedure and after 3 years of letter writing and form filling was informed by the f.s.a in june 2005
that my complaint had been upheld and would require only to be put before the ombudsman for finalisation.

since then , despite innumerable e mails to the f.s.a. i have been unable to get any further progress simply being told that my case is with the financial ombudsmans office and will be dealt with 'in the near future'.

can anyone advise how long this process takes ??? or if there is any other course of action that can be taken to speed up the process ????

dunstonh

can anyone advise how long this process takes ??? or if there is any other course of action that can be taken to speed up the process ????

The FSA do not get involved in complaints handling on an individual level. The FOS will only get involved in the advising company has deadlocked/finalised their response to the complaint.

I suggest you take another look at the complaint and see what stage it is at.

did you complain to the advising firm first?
Did they reject it and tell you that you could go to the FOS?
Have you submitted your complaint to the FOS?
Have the FOS acknowledged it within a couple of weeks?

happyjo34

My policy was sold to me in 1983 and therefore is prior to the date on which claims may be made. However I received a phone call from a company of accountants who say that if they act on my behalf on a no-win, no-fee basis they believe they will be able to get compensation for me. As I have never contacted them direct, I wonder if this is genuine or a scam. I have checked the company and they are on the list of the Institute of Chartered Accountants at the address on their headed paper. Obviously I would jump at any compensation but I read Martin's tips all the time and am very wary. Any advice anyone??

happyjo34

Did you get a response regarding this query. I too have a pre 1988 policy and have just been contacted by Solar and wonder if it is worth letting them claim as I have been told I can't claim due to the policy being taken out in 1983

dunstonh

Yes he did get a response. Solar appear to be telling people anything to get them to make a complaint whether there is any chance or not. The suspicion is that the person making the phone call gets paid for every person agreeing to make a complaint.

To summarise the response, you cannot get a second bite of the cherry if you have already made a complaint in the past unless significant new evidence has come to light.

If the case pre 1988 was not sold by a tied provider/bank then you are almost certainly not able claim. Also, even if you could, a 1983 endowment would have LAPR tax relief making it much cheaper than a repayment mortgage and you had MIRAS benefit for many of those years (which also benefited endowment mortgages the most). Given the likely target amount of the endowment for the year, it would be unlikely to be worth the effort and there is a good chance the endowment has been the financially better option.

CHRISM_3

thanks for the reply

the full procedure was followed both to the advising firm through to the fos

the fos have confirmed that they consider my complaint 'upheld' this dated june 2005 +

i am still awaiting the final outcome from the fos some 18 months later !!

mayb_2

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.

And many people just bought them not knowing what they were getting in to. I think it is easy to forget that this site was created to help those people who feel they were missold their endowment policies to get redress for that.

Most of FP endowments are time barred now and they finally seem to be enforcing that within the rules. It can be overuled in extreme cases. Such as being in hospital or lost on a desert island.

This imposition of time barring (no doubt with the full backing of the FOS and FSA) is a system that allows companies to avoid paying out on missold endowment policies - there is no proof required that the company in question sent out the letters or that those letters were clear and unequivocal in their meaning. Their is no way of knowing if those people who did not know what they were buying in the first instance will understand the implications of the letters they received.

It strikes me as unreal to suggest that those people who were queing up to buy these policies or towed in by their parents are the same ones who have left it unitl now to make these complaints.

We have covered this ground before dunstonh - I am sure that there are many genuine salesmen of endowment policies out there who fully explained the policy being purchased and its implications. However, the very existence of a system to claim about misselling, the existence of this website and the opinions expressed by the FSA itself would indicate that the numbers missold were very high. You could not be present at each and every sale and must allow that no matter how likely it is that the claims may not succeed in the light of present time barring, the people concerned here may well have a justified claim and a right to pursue it.

To that end I think all of those who believe they have a justified claim should challenge the firms concerned on the time bar rules and ask for the proof that all letters were sent and were clear and unequivocal. If the firm cannot supply this proof and there is sufficient evidence that the policy was missold then why should this not go to the Ombudsman in the same way as other disputed claims. It may not succeed but it is worth a try - I don't think you always apreciate the financial difficulties a lot of people may find themselves in when these policies don't pay the mortgage.

Do all of these firms have the same time barring rules for instance. Is the cut off date the same for everyone? If not and it is a rule - why are they not all the same? If they are not all the same presumably it can't be a law and if it is not a law the rule can be challenged. Again I may be being too simplistic but it makes sense to me.

So if there is someone out there who understand these rules and laws and what makes the difference perhaps they can offer advice to help these people to pursue their claims legitimately and fairly. Defenderofthe weak cannot be the only other person who thinks this time barring is flawed and should be challenged.

End of rant.