Act now on mis-sold endowments: new article

mayb_2

qcvs2000 I have made a claim for misselling of an endowment policy not attached to a mortgage. I have pursued it uphill and down dale This claim would have met all of the necessary criteria for a missale if it had been attached to a mortgage. When no mortgage is involved and without a written statement of a specific return there is no proof of what you were told at the point of sale. For instance if your mortgage was for £40,000, of necessity you must have been told you would get £40,000 back from the endowment policy in order for it to be the vehicle to pay off your mortgage.

I am not saying you shouldn't make a claim anyway because I believe that these policies were missold in great quantities- and actually so does the FSA. If enough people pursue these cases you never know something might crack. However, I would not hold your breath on getting your complaint upheld under current conditions - it all depends on what you have in writing. If you go ahead I wish you the best of luck and would be interested to know how you get on.

defender_of_the_weak

Brock

1992 from Leeds permanent should go to NU, they were tied to them for the giving of endowment advice at the time

Darren.m_2

Hi. I'm after more advise. I have been asked by my endowment provider "why, if you do not like to be put in a position of risk and that your attitude to risk is low, then why did you not take any action when you received notice in 2005 stating there was a high risk your endowemenst would not reach their targets".

Now, not wanting to be tripped up, but remaining honest with my reply I guess the only real reasons are, that during the year or so from being notified in 2005 of the likely shortfall, I was considering my options. Now if there was a 6 to 8K deficit I thought maybe I could just take out a loan. Or indeed I do have another endowment with a face value of 7K which matures 2 years before my mortgage ones. I also considered using this.

If I disclose this will it have an adverse effect on my claim for being mis sold.

Many thanks.

defender_of_the_weak

Answer

Not sure what to do, do not understand endowments.

Who is the provider/broker asking the question? This one is heavily loaded and could go against you almost regardless of the response

Mr_helpful

[quote=mayb;4882052_For_instance_if_your_mortgage_was_for_£40,000,_of_necessity_you_must_have_been_told_you_would get £40,000 back from the endowment policy in order for it to be the vehicle to pay off your mortgage.

quote]
Not true, The only Would is if you die you will get the full sum assred no endowment is going to know that it definitely would have enough money in 25 or so years. The policy had to be designed to pay off the mortgage using a projected interest rate set by the regulators.
This is different from "Would" The word "should" would have been apprpriate but shows how twisting one word in a sentence can mis lead or even mis sell.

Belfastbelle

I took my case to the financial ombudsman- and the decision was that there was no case

dunstonh

It is common over the years for the endowment maturity date to become out of sync with the mortgage redemption date. You take it out in January but 7 years later you may move and September becomes the new month to redeem. You may extend the term and so on.

These are not grounds for complaint as you should review the mortgage and endowment each time. As long as the time scale is reasonable there are no issues. In the case of 1 year and 14 months, that would be considered reasonable. Plus you say it was short which is on the right side.

You could challenge the decision but you are not likely to win on those grounds.

mayb_2

I am sure Mrhelpfull that you are being disengenuous in your last response. If a misselling of an enowment policy is upheld it is agreed that the sum you would have been expecting it to pay out would be the sum for which your mrotgage was taken out. That is the whole point - you did not know that this would not necessarily happen but the sum involved could not be disputed. If you have an endowment policy not attached to a mortgage there is no way to compare its ultimate value with your expectations. Therefore, you cannot say it did not reach the target you were promised unless for some reason this was given to you in writing at the time. It is harder to prove but it would have been missold non the less. You did not know that it would not perform. You were unaware of the risk but you cannot prove how much you were promised would be paid out at the end of the term.

That is why it is possible for companies to get away with misselling an endowment not attached to a mortgage but not a mortgage endowment.

Mr_helpful

An endowment is a form of savings and you cannot be given a definite figure years in advance. You can be shown what has happened historicaly but thats no guarantee for the future. This is most of the problem for endowments . During high inflation years they made more than the target but then we entered a period of low inflation and the targets were then too high It is not miss sold just because it doesnt make its target. lots of things sold dont meet expectations but that could be because expectations are wrong. If inflation is 20% and your endowment is targeted for 10% and makes 15% you have lost money in reality but wouldnt complain as endowment over target. If inflation 2% endowment target 10% and makes 5% you have in real terms made money but still want to complain because it missed target.
Any investment carries risk. It isnt an investment if there isnt risk, but it would be impossible for any adviser to outline all risks to you as you dont know the future.
It would be very difficult to prove miss sale of a non mortgage endowment. It might be easier now as arguably there are better products but at the time there probably wasnt.

mayb_2

The whole point being that the risk was not explained at the time Mrhelpful. Same as endowment mortgages were not explained at the time. This as you know well is the basis of a misselling complaint. This is not a complaint about performance per se. You are being wise after the event - something we can all do now.