Endowment - offer received but no compensation

lycrawearer

Recently complained about my 25 year lo-cost endowment sold in 1996, using info from this forum and also Which! ...

Anyway, the seller (Bradford & Bingley) replied (rather quickly I thought) saying that my complaint had been upheld and that they would be making an offer shortly.

Soon enough a second (5 page) letter arrived full of blurb and comparisons etc. Boils down to the fact that they have offered to make up the difference (£1,850 odd) compared to what I would have paid off if it was a repayment mortgage, but that's it !! No 'compensation' for mis-selling at all ...

Apparently if I surrender the endowment then I will also receive a further £3,000, so would receive approx £5,000 in total.

Endowment was supposed to mature at £16,000 but original advisor said we would receive more like £23,000 (yeah right).

What do fellow money-savers think ? I have the right of appeal to the FSA, but am I right asking for some compensation for their error ?

Cheers

Lycrawearer

dunstonh

What do fellow money-savers think ? I have the right of appeal to the FSA, but am I right asking for some compensation for their error ?

You are not entitled to any compensation above what it costs to put you in the position you would have been had you been on a repayment mortgage.

You have no right of appeal with the FSA. The FSA do not get involved in complaints. You could try the FOS but they won't agree with you and it could involve a recalculation taking place and you getting paid less. As many endowments are improving and going back into surplus positions, you would risk getting less.

Endowment was supposed to mature at £16,000 but original advisor said we would receive more like £23,000 (yeah right).

A 1996 policy invested in unit linked funds with a 7% (or lower) target growth rate over a 25 year term certainly has the potential to achieve that. One invested in a closed with profits fund from a low solvency level insurance company wouldnt have a hope in hell.

Anyway, the seller (Bradford & Bingley) replied (rather quickly I thought) saying that my complaint had been upheld and that they would be making an offer shortly.

The file is probably missing or incomplete or the person who sold it didnt put in the required warnings and the B&B can see that they cannot support the sale. In these cases, it can often be much quicker. According to stats published by some companies, most complaints are upheld on the basis of poor, missing or incomplete paperwork rather than actual certain mis-sales.

vinno65

Hi Lycrawearer,
It not compensation but redress. This is why it pisses me off when people go on about a compensation culture with regards endowment complaints. Its called redress because you are getting nothing above and beyond what you are entitled to. What they are doing is putting you into the position you would have been in had the correctly sold you a repayment mortgage at the outset. At least you have not lost out. Hundreds of thousand have by fair means but mostly foul(think timebars)
In your case if you are truly not happy with the risks of en endowment then cash it in and use the extra redress to pay some capital off your mortgage and convert to a repayment. That way so long as you keep up the repayments your house will eventually become yours.
Dunstonh is right there is not point complaining to the FOS unless you have some written evidenc that you were promised £23000 at maturity, but these people were too clever to put anything in writing
regards Vinno