Act now on mis-sold endowments: new article

dunstonh

Now dunstonh I am not that hot on maths but as I understand it you are saying that 1/3rd of complaints to the Ombudsman are upheld. On a previous post you linked to a Telegraph article claiming 42% of complaints to the Ombudsman failed. I make this a total of 75% - I wonder what happened to the 25% that neither were upheld or failed!

The figures are updated annually. You are looking at different periods.

At least we have stopped calling them fraudulent claims now which is a bonus. Not upheld does not necessarily mean not missold and certainly does not mean fraudulent.

Not upheld includes the fraudulent claims.

I feel higher percentages will be 'not upheld' as so many are now putting in claims under pressure of the time bar

time bars are not included in those. They come under "out of jurisdiction" which was 19.5% last year.

but I don't understand why that should lead you to deny that these things were missold on the scale that they so obviously were

Because you assume that they were all mis-sold when the evidence shows that they were not. Was it not for the complaints proceedure which allows people to claim at no expense to themselves and make all sorts of stories up, then the claims would be less. As has been stated by the FSA.

hedgehunter_2

I am new to this forum but read the posts with a good deal of interest and I think both sides have some valid points.

Most of the policies sold in the late 80's and early 90's were not mis sold, they later became mis sales when the FSA decreed in hindsight how complaints regarding the sales should be dealt with.

If we go back to the time these policies were issued, they were designed but not guaranteed to repay an interest only mortgage at a target amount, and were generally priced on the assumption that then current bonus rates would continue to be paid at 80% of the then current rate and that no terminal bonus would be paid. This in therory gave these policies ample leeway that would not result in a shortfall.

It is also forgotton that at the time of double digit interest rates very few people would have chosen or be able to afford capital and interest mortgages without compromising the property they wanted to purchase or not being able to buy at all. That in hindsight mot people would have been better off withg a repayment mortgage rather than an interest only mortgage and repayment vehicle is a matter of history

Unfortunately the financial world changed in the next 15-20 years and now as a result shortfalls from the target amount are arising.

There is no easy way to accept this but investments, inflation, property prices and interest rates are economically linked, and the secenrio that most people would accept of low interest and inflation rates coupled with good investment returns and high property value increased is an ideal of not impossible economic world. Mortgage endowments are failing to meet their target amounts for the very reason that economics have changed both to the advantage and disadvantage of homebuyers.

If someone guaranteed to repay your mortgage so there were no shortfalls at the cost of you giving up the property price increase over the same period, not many would take this offer up.

It is undeniable that the insurance industry was slow to notify policyholders of the change, and equally advisors were also slow to notify their cleints or suggest options to negate the shortfalls, unsurprisingly investors blame the industry, and are willing to accept the redress on offer from the regulators even if it is under the guise of a mis sales complaint being upheld.

mayb_2

"The figures are updated annually. You are looking at different periods."
Both sets of figures were provided by you dunstonh - in support of the one argument.

"Not upheld includes the fraudulent claims" Yes I am still waiting for someone to provide the figures for the fraudulent claims so it is difficult to do the maths on that one.

"time bars are not included in those. They come under "out of jurisdiction" which was 19.5% last year." I didn't say they were dunstonh I have said that because of the impostition of the time bar more people have put in their claims to beat the imposition of this - and the Ombudsman will have to up his 'not uphelds' to save the industry from a financial bloody nose. i.e One third of 100 is less than one third of 1000.

"make all sorts of stories up" - says you - you are in denial dunstonh.

hedgehunter
"Most of the policies sold in the late 80's and early 90's were not mis sold, they later became mis sales when the FSA decreed in hindsight how complaints regarding the sales should be dealt with."

Wrong - they became missales when the salesman failed to warn people of the risk attached and when they failed to match sales to attitude to risk. It is not possible to claim a missale just on the basis that you bought one and it didn't perform.

"If we go back to the time these policies were issued, they were designed but not guaranteed to repay an interest only mortgage at a target amount, and were generally priced on the assumption that then current bonus rates would continue to be paid at 80% of the then current rate and that no terminal bonus would be paid. This in therory gave these policies ample leeway that would not result in a shortfall."

Wrong - some people were given guarantees - mine for instance stated in writing that not only would I pay off my mortgage but I could look forward to a substantial lump sum too (shame they didn't include this figure too). That is why the company paid out without my having to go to the Ombudsman. Also many of the policies were sold in the early 90's - after they had started to fail - and were low start endowments - never were they going to be able to meet the targets set for them and many a saleman knew it.

"It is also forgotton that at the time of double digit interest rates very few people would have chosen or be able to afford capital and interest mortgages without compromising the property they wanted to purchase or not being able to buy at all." Wrong - my endowment mortgage was set at 13% - not far below the rate at the time - we took it because it was fixed and we could not afford to have the rate rise and we were told this was the only type of mortgage that would allow us to do that. The total expense was about the same as a repayment plus insurance. Crazy Saver saved £10 per month!! - huge saving there then.

"If someone guaranteed to repay your mortgage so there were no shortfalls at the cost of you giving up the property price increase over the same period, not many would take this offer up." This does not make sense - everybody having a repayment mortgage would not have kept the prices for houses the same over 25 years.

I tell you what would have been nice though - never having been told the best thing for you was an endowment mortgage and never having been put into this position in the first place. Now if you could take us back in time and make that happen I would be ever so grateful.

"It is undeniable that the insurance industry was slow to notify policyholders of the change, and equally advisors were also slow to notify their cleints or suggest options to negate the shortfalls, unsurprisingly investors blame the industry, and are willing to accept the redress on offer from the regulators even if it is under the guise of a mis sales complaint being upheld" Hmm you nearly got that right but then you had a wobble at the end - it gives a whole new meaning to the word slooooow.

dunstonh

"make all sorts of stories up" - says you - you are in denial dunstonh.

You have made a complaint against 1 company but judge all advisers by that.

I have had 1 complaint in 15 years and it was fraudulent. It's a good job I dont think like you.

Mr_helpful

MAYB

Just a point or two Mrhelpful if you are ready to believe that just today two people are "happy to commit fraud just to get some money" - why do you find it so difficult to accept that there were as many salesmen happy to miss sell an Endowment Policy just to earn the lucrative commission?

I found two posters in one day but I cant find any advisers asking people to commit fraud on this forum can you?

I am unlikely to get my figures true - if I can't get my figures then you certainly can't have them either so claims of high levels of fraud are just that - your claims not facts. If the Ombudsman isn't making them for himself then perhaps you and dunstonh should not be doing it on his behalf.

How many times do we have to tellyou the FOS is a adjudicator it has no powers to take court action against a claimant so it doesnt keeep figures

It is not good enough to say that most complaints are based on lack of performance. Of course they will be - if you did not know that performance was an issue you are bound to be shocked when these things don't deliver. It is likely that people may focus on that when they make their complaint. The point should be whether they knew that performance was an issue when they bought the product - not that they are referring to it now.

There are loads of references to performance in all endowment documents. The only people who genuinely might not know it was an investment are people who couldnt be bothered to take any interest in what they bought and didnt read anything about what they bought.
Its interesting to note that on other thread tou talk about an ISA. these have risks too. a shares Isa is higher risk that a with profits fund. Its funny how you can understand the risk of these but not get your head round an endowment isnt it.

"FOS have a hard job sorting out what is False Memory, Selective memory and genuine memory." except when the memory is the one claimed by the company concerned of course.

You dont have to be biased you just have to read this forum to see selective memory at work. There was one poster not long ago who couldnt even remember if he had seen an adviser yet knew his endowment was miss sold. And you expect the FOS to come out on his side. There are people asking how to effectively lie on the complaint form. Most of the firms will have some hard evidence, it may not be a lot but there is usually some.

- and then there is the FOS's own memory of how these sales were carried out to contend with as well.

I dont think the FOS would think much of that slander. They have a lot of wrong complaints to sift through.

Perhaps dunstonh is correct that there are four sides to every story - certainly four types of memory to chose from.

Precisely which is why you shouldnt only have one

Vinno

http://www.publications.parliament.uk/pa/cm200304/cmselect/cmtreasy/394/39406.htm

regards Vinno

mayb_2

Magic Vinno - but do you think they will read it?

mayb_2

"Its interesting to note that on other thread tou talk about an ISA. these have risks too. a shares Isa is higher risk that a with profits fund. Its funny how you can understand the risk of these but not get your head round an endowment isnt it."

I don't have a shares ISA.

"I found two posters in one day but I cant find any advisers asking people to commit fraud on this forum can you?" - and your point is?

"There are loads of references to performance in all endowment documents" now maybe following FSA regulations.

"How many times do we have to tellyou the FOS is a adjudicator it has no powers to take court action against a claimant so it doesnt keeep figures"

Exactly my point Mrhelpfull there are no figures so don't keep shouting fraud everytime you talk about people claiming for misselling. I must remember to be less subtle when posting to you.

"You have made a complaint against 1 company but judge all advisers by that"

dunston you have had one complaint against you that you felt was fruadulent and now label all claimants as fraudulent???

Mr_helpful

mayb wrote: »

"Its interesting to note that on other thread tou talk about an ISA. these have risks too. a shares Isa is higher risk that a with profits fund. Its funny how you can understand the risk of these but not get your head round an endowment isnt it."

I don't have a shares ISA.

You talked about possibility of an ISA for your son to pay off mortgage. a cash one wouldnt be much use as too risky that cash might lose out to inflation or interest rates might go down and leave ISa off target. If it was a shares one that would have investment risk.

"I found two posters in one day but I cant find any advisers asking people to commit fraud on this forum can you?" - and your point is?

You are asking why I believe some claims are fraudulent and not so many advisers

"There are loads of references to performance in all endowment documents" now maybe following FSA regulations.

Completely wrong even back in the 80's a person who read anything could be in little doubt that they had an investment. The only difference was the Sunday mail actually recommended enowments then.

"How many times do we have to tellyou the FOS is a adjudicator it has no powers to take court action against a claimant so it doesnt keeep figures"

Exactly my point Mrhelpfull there are no figures so don't keep shouting fraud everytime you talk about people claiming for misselling. I must remember to be less subtle when posting to you.

i dont keep shouting fraud. You just have to read the posts here to realise that many people are and have claimed solely for lack of performance. People are questioning why some companies want the endowment surrendered if they compensate. If it was miss sold you shouldnt have it DOH.

"You have made a complaint against 1 company but judge all advisers by that"

dunston you have had one complaint against you that you felt was fruadulent and now label all claimants as fraudulent???

Completely untrue Dunston helps many people but also outlines the rules where you can and cant claim.

If there are so many crooked advisers how is it that many of them had endowments for their own mortgages?. I did on my first mortgage and I ended up mortgage free in less than the usual 25yrs. I might have been better off with a repayment I dont know I dont care as its all in the past and I live in the present.

dunstonh

I dont know I dont care as its all in the past and I live in the present.

And no doubt you are financially better off because of many of the reasons that have killed endowments off have benefited you in other areas. So, swings and roundabouts. Give me a 6% mortgage over a 9% mortgage any day.