Endowment Compensation Questions

andy768

Hi,

We have just followed the advice within this site to claim compensation for my Mums endowments. Sorry these questions are vague, but we really do not understand a lot of this.

Can I just confirm the following points before we can accept/reject the offer.

1. The compensation offered is the difference that you have lost compared to a standard repayment mortgage NOT what you were originally told it would make?

2. If you reject the offer, is there a chance you can end up with nothing or can you always reclaim that first offer?

Thanks, and if we need to supply any more information, please say.

BACKFRMTHEEDGE

Statement 1 is true. don't know about statement 2. I'm sure someone else will be along shortly.

andy768

Thanks for the quick reply, I also have another question. If you accept the compensation offer, are you giving up any rights to future disputes?

mintymoneysaver

Yes, it is a full and final settlement.

andy768

Hi,

Can anyone help with question 2?

Thanks

vinno65

Hi Andy,
in answer to question 1. The purpose of redress is to put you into the position you would have been had you been sold a repayment mortgage.
For example if you had borrowed £30000, after 10 years you may have paid off £10000. This is then compared to the surrender value of your endowment. If the surrender value is only £7000 then the firm must pay you £3000 in redress(it is not compensation as as you can see you will not get anything above and beyond what you are entitled to).
What you should then do is take the surrender value and the redress totalling £10000 and pay it off you mortgage. Convert the remainder to a repayment and then you should be back in the position you would have been.
In response to question 2 is there a reason you are unhappy with the redress you have been offered? If you are you may well be able to refer your complaint to the FOS. However if you do this other posters have said that some firms rescind their offers. However I would have thought that the FOS would look very unfavourably on this sort of behaviour .
Post a few more details, about the nature of why you were miss-sold and why you are unhappy with the redress and people may be able to offer more advice.
regards Vinno

EdInvestor

Convert the remainder to a repayment and then you should be back in the position you would have been.

Altetrnatively, you can keep the current mortgage and overpay it as though it was a repayment one. Some people may prefer to do this, if the mortgage is on good terms, because it gives them the flexibility to immediately cut outgoings by returning to paying interest only if some emergency occurs, such as loss of job.

andy768

Thanks for all the answers, just one final question, is it possible to receive the compensation and keep the endowment mortgage running? Is it a complicated situation involving the social security. Basically, if we acept the compensation, can we continue with the endowment as usual?

vinno65

Hi Andy,
simple answer is yes. Firm may insist you surrender, if you really don't want to you don't have to so you may tell them to bog off!
regards Vinno

dreamylittledream

vinno65 wrote:

Hi Andy,
simple answer is yes. Firm may insist you surrender, if you really don't want to you don't have to so you may tell them to bog off!
regards Vinno

Which may involve taking things to the Ombudsman

Friends Provident and Royal London for two always frame their offers with the policy being surrendered for example and are less then helpful is you wisj to retain the policy.

vinno65

Hi,
if it involves taking an unreasonable firm to the Ombudsman then do so, the more referals for bad behaviour a firm gets the more likely the FSA might fine them. FP I believe one of the first to be fined for mis-handling complaints
"the Quakers would be turning in their graves!"
regards Vinno