Mis-sold endowment - can anyone suggest what to do next please

Avila

I wonder if anyone gave give me any advice on the following. I believe my husband and I were mis-sold an endowment mortgage in 1995 by a IFA and have a letter from him stating that ‘we have recommended this product to fulfil your expressed priority requirement for a lump sum to repay your mortgage on death or maturity. We have also completed and extensive analysis to determine the provider whose product offer the features which are most important to you, and which most clearly match your requirements and attitude to risk’. We have just discovered that our endowment policy far from being a straight forward ‘With Profits’ as our previous ones were is actually a ‘Unit Linked With Profits’.

The IFA is no longer in existence and after tracking down the various companies that took them over we sent a letter of complaint using the very useful information on this website. The company wrote back stating that we were out of time to complain and said we could contact the FSO if we wanted. We did this and have just heard from them that they uphold the company’s decision about our claim being out of time and will not pursue the matter.

As the policy will not now meet the requirement of repaying the mortgage and we cannot afford to convert the interest only mortgage to a repayment one we will have to sell our home to have funds to repay the mortgage and purchase another property with the remaining proceeds of the sale or with a small repayment mortgage.

Does anyone know if the time limit to complain about mis-selling within is legal or just arbitary. Any advice or information on anything we could do to get out of this situation would be greatly appreciated. We need to respond to the FSO by 30 March if we want them to review the opinion that our complaint cannot be considered any further by them.

Trying_to_be_good

I think the time-limit relates to when you first received a 'warning' letter, and isn't arbitrary - when did you first receive such a letter? What action did you take (e.g. converting the shortfall to repayment)? Can you extend the mortgage, overpaying as much as possible of the outstanding capital? Moving costs a lot of money in itself.

I don't know of any other avenues for you to try, but others may have some ideas.

dunstonh

We have just discovered that our endowment policy far from being a straight forward ‘With Profits’ as our previous ones were is actually a ‘Unit Linked With Profits’.

You see that as a negative? I see it as a positive. Over the long term, unit linked offers better potential.

Does anyone know if the time limit to complain about mis-selling within is legal or just arbitary.

Time bars exist in law. As it happens, financial advisers have less protection on time bars than law (no 15 year for example).

Any advice or information on anything we could do to get out of this situation would be greatly appreciated.

Its the end of the road. Your only choice now is court action but that usually results in an expensive failure as you have to prove it was mis-sold (unlike the FOS where the advising firm has to show it was sold correctly).

As the policy will not now meet the requirement of repaying the mortgage and we cannot afford to convert the interest only mortgage to a repayment one we will have to sell our home to have funds to repay the mortgage and purchase another property with the remaining proceeds of the sale or with a small repayment mortgage.

That wont generate much sympathy I'm afraid. You would have been aware of a potential shortfall for about 8 years now. Ample time to take action. Converting the potential shortfall figure to repayment basis and leaving the rest interest only shouldnt cost that much unless you have left it to last minute. Most lenders are willing to extend terms as well. So, your comments do not reflect what actually happens when action is taken. Just inaction.

You cannot complain about an inability to act when you become aware of things and this is why the time bar exists. It stops people knowing there is a problem from hedging their bets and waiting to see what happens and then making a retrospective claim.

EdInvestor

Post some more info.

Endowment provider
Surrender value
Monthly premium
Maturity date
Maturity forecasts
Interest rate payable on mortgage

dreamylittledream

You do realise that in terms of the risk posed by the investment there isn't a huge amount of difference between a traditional with profits and a unit linked with profits policy?

Its more a different way of adminstering the policy then a difference in investment type - in 1995 there were relatively few traditional with profits policies being written as new business - the unit linked version had largely taken over.

A unit linked with profits policy is not the same as a unit linked managed fund endowment - so this in itself is not a valid grounds for complaint.

In answer to your original question- if the original IFA has ceased trading there is a possibility you may be able to go to the FSCS - it depends if the successer companies bought the IFA's business or just the client bank really.

That said the FSCS also use timebars these days so if its been 3 years+ since the first red letter you've pretty much had it.

And selling a further with profits policy to an experienced endowment holder in 1995 when there is clear evidence from your quote from 'reasons why' letter that attitude to risk was considered is unlikely to be seen as unsuitable advice to be honest - even if the case was within FOS jurisdiction.