FOS rewards the mis-selling wrong-doers etc.

vinno65

homer_j wrote:

sounds very interesting.



Would there be any reason for not being allowed to chase through small claims court? Providing its not over 5k, you cannot be held accountable for any legal fees if you lose and the claimants costs are likely to be no more than 250 on 5k. Limitations act may stop some here so not sure?

Surely if you were to claim that this person owed you x amount, surely they will have to defend and prove why they didnt owe it you. If they cant defend or prove otherwise, you win?

Might be talking rubbish here, but I know thats what they are doing with bank charges.

Hi Homerj,
the problem with firms who refuse even to investigate a complaint on the basis that you are time barred is that the complainant A) Hasn't had confirmation that the sale was not compliant or have a loss figure to put on the small claims fault.

But you are right I believe, in that even if a firm refuses to investigate you could put in a small claims, claiming a miss-sale and possibly quoting your last predicted shortfall as the loss(although this is only potential loss),what this would do however is force the firm to defend itself. If it didn't have the documentation to do so it would have a hard time doing so. If it did, and it looks like the complaint would be hard to prove in court then all you would have lost is the £120 or so for the initial cost of the claim.

The problem now though is getting people to realise this avenue is open for them. If you have been told by the firm you are time barred and this is backed by the FOS common consensus always stated that you would be unlikely to win in court, so at this point of a complaint most people gave up and now 3 years later most have probably moved on and forgotten about endowments. You could see it as just another shoddy way how these firms are winning. That and the pathetic fines handed out by the FSA. FP for example were fined about £600,000 for miss-handling complaints. At an average redress figure of £5000 (so this fine equates to less than 200 successful complaints) is doesn't take a rocket scientist to work out that fobbing 1000's of people off and incurring the so called wrath of the FSA makes perfect business sense!!

regards Vinno

EdInvestor

I see the Sunday Telegraph is reporting doubts about FOS fairness to consumers now.

Article here plus some other links that may be useful to people thinking of trying out the courts.

Garry_Anderson

Nads - I know Emma and her pal Roy can fight their own battles - so will let them do so.

Just to say - that I think they have good motive.

Garry_Anderson

GA> Methinks you take the p*ss. We will pay at very least - three times our loan amount to the building society (maybe four times) - also they get interest on that money. How much of that goes towards their wages?

Dreamer> Ah so its mortgages in general you have a problem with. Sadly the cost of borrowing money is paying interest - or do you think loans should be on a charitable basis?

No - it is finance companies and their liar agents profitting from 'churning' and victims having to pay corrupt companies more interest than if we had repayment mortgage - duh!

Garry_Anderson

Dreamer> You don't need me to make out you're a wacked out conspiracy theoriest - your posts do a perfectly good job on their own.

When you explain why my posts are anything other than most logical conclusions based on facts - then you might have some good argument.

D> And continually likening the selling of investment linked mortgages to bank robbery does not a compelling argument make.

Hmm.. many thousands of pounds have wrongly been taken from couples using deception and lies (fraud) - some banks haven't had that much taken.

Collectively - untold millions have been taken like this - much more than taken in all UK bank robberys - true or false?

Garry_Anderson

Ed - you are one of the most objective people on the forum - but if you forgive me saying, I believe you are still a bit blinkered though.

Ed> The problem that Garry has is that endowments did actually deliver what they said they would - enough to pay off the mortgage and provide a surplus cash lump sum - for something like 25 years.

That the market was LUCKY ENOUGH to deliver for 25 years is not the problem Ed.

That the entire industry pretended that it would last for ever is the problem.

They behaved as if the risk was illusory - then made believe that endowment was fit for massive loan repayment.

Even if they informed customer that there was some risk involved - using inducements of extra cash at end - it is still unfit for purpose.

What don't you understand about that?

To call it good financial advice is an absolutely pathetic joke.

Ed> Thus although there was certainly risk involved - and those who were not told about this deserve redress - it was not very apparent to the man in the street.

Those not told of risk deserve redress.

However - we all know the risk was certainly played down i.e. people were told it always has delivered or made extra cash at the end.

This is clear from your statement, "endowments did actually deliver what they said they would - enough to pay off the mortgage and provide a surplus cash lump sum"

However, everybody who took out endowment for the purpose of repaying massive loan deserves redress - because nobody knows the odds on endowment being paid in 25 years time (or any long period) - fact: it is not fit for purpose.

Experts want to conflate the inducement with purpose - because that is what conmen do.

Incidentally - do you mean endowments have been going for nearly 50 years - if it has been delivering for 25 of them i.e. mortgage loan term + 25.

Ed> This risk related to the equity markets, which went through a very long bullish period from the mid 70s until 2001. It was so long that many people in the industry itself got carried away and thought it would never end. This was also a time of much higher interest rates and higher inflation.Thus charges on products like endowments were higher, but this didn't matter because profits were such that they were barely noticeable.

The public have been told in most recent years - that past performance does not indicate future performance - are you telling us that all 'financial experts' did not know?

Ed> Then came the crash.People in the industry were caught out badly when the boom did end - and ended with a bang.As a result of their failure to anticipate this, their customers also lost out.

And people in the industry had no idea that the market could crash or have long periods of decline - yeh - give us a break.

Fact is - losses could have been a lot worse - contrary to experts saying endowments might have repaid loans.

Ed> Making things worse was that Equitable Life failed more or less simultaneously, and though this was for different reasons, it made the new regulator (the FSA) determine that customer safety had not been properly dealt with in the past.Hence new regulations were brought in which did improve protection - but also caused additional losses in some cases because of the timing.

I think you know as well as I do - the FSA main aim is to give confidence in the markets - PR for the industry.

Any big fines from corrupt companies go to the FSA - guess who ends up paying them.

Yep - their customers - the same people who ultimately pays to keep the FSA running.

The FSA have no integrity - I have proven that with findings of official complaint.

Ed> So here we are now.Does this all add up to a wholesale effort by companies attempting to defraud their customers? Should they be subject to punitive justice?

If you read the post on what has happened - then the answer is clear - they should be.

Ed> I personally would argue that in some cases it would be quite helpful if individuals were subjected to a few punitive measures.Equitable Life would be one such excellent example, which might help others to understand that ethical behaviour is not optional.

I have enough evidence to prove that top management of Woolwich defrauded many of their customers - they should go to court also.

Ed> We see many people in the US jailed for cheating and banned from the industry following the dotcom boom - but it's very rare here.Arguably too rare - it's pretty clear that the industry is quite badly infested with cowboys and companies routinely embrace bad practice - if not actual fraud. Indeed it's built into the system to an extent.

This is another Enron (lot of corrupt individuals involved) - many victims (a lot of them old) have been put in debt - need to find extra money to finish buying their house.

I agree - any commission based system in which lies pay bigger income has got to be most suspect.

Ed> I would also suggest that the FSA should crack down much harder on recalcitrants and repeat offenders - eg Friends Provident, which has already been fined heavily for complaint mishandling and is now abusing the time bar rules.

Isn't it good to know that customers of Friends Provident are paying their big fines for them?

Any directors and management found guilty should go to jail - or very least sacked and fines come out of their bank account.

That way only the corrupt directors and management pay - not their customers.

If this means replacement of entire board - then so be it - those that were there are clearly crooks.

Ed> But it seems very unlikely you could make a wholesale prosecution for fraud stand up in court or even in the public mind.Not least because millions of people have done very nicely out of endowments in the past, and even those who haven't, have profited from rising house prices.

1. Those that made money were lucky - they also could have lost big time if world markets fell - true or false?

2. What have rising house prices to do with being conned by these corrupt companies into being defrauded - to buy something unfit for purpose?

I had no problem - the Serious Fraud Office could not dismiss my complaint - only ignore the facts put to them.

Ed> IMHO the main lesson that really needs to be learnt from the endowment debacle is by us, the investors and consumers, not by the industry.

I am quite sure that a burglar will say, "well - it is your fault you should have got stronger doors and locks".

Ed> Nobody looks after your money like you do.

The thing is Ed - you should not be defrauded, or conned, or mis-sold, or falsely advised, (or however you wish to dumb it down) by your bank or building society - should you?

Most the entire industry was either fraudsters - or criminally negligent - all the facts fit the first judgement.

Name one firm who has warned that endowments were unfit for purpose of loan repayment.

Name one who has not conflated the purpose with the enducement?

Garry_Anderson

You are too nice to me Vinno

Vinno> As Gary keeps pointing out endowments are not really fit for the purpose of paying off such a massive loan. Suitable as a low risk investment maybe (so long as the risks are still explained to the punter)

I have absolutely no problem at all about investing spare cash on the stockmarket - and have done so myself.

The problem begins when borrowing money to invest - but not too bad if it is spare money you have coming.

This is made completely stupid when borrowing money to repay a loan - money that you owe people : the bigger the loan, the more imbecilic it is.

It is stupid to gamble on essential needs e.g. your home - what happens if you do not win?

What chance has anybody approaching pension age to pay off large shortfall when they should be saving harder for retirement.

Garry_Anderson

Ed> Another area we really need to take into account is the awful state of regulation in pre FSA days.

Yep - they seemed nonexistant to consumer.

Ed> IMHO you can't really blame regulated companies for making money out of consumer ignorance, if the regulator says and does nothing and even appears to encourage exploitation. In fact some companies are shown upo in a good light by actually protesting the regulator's behaviour in those days - it's a mixed picture.

Hmm.. you don't blame them.

So some blokes comes round your old nans house and tells her she needs buy very expensive alarm systems to stop burglars and then keeps coming back to sell her more and more - you don't blame them.

I am quite sure it is not illegal, if your nan isn't senile or they don't con her that threat is worse than it is e.g. it is okay to say, "There has only been one old lady been beaten and raped in her home this year - but what if it was you?".

Ed> At least we now have a better regulator, it's a start. But I can't say this often enough, better informed consumers are the real key to better corporate behaviour in the long term.

This one is primarily concerned with consumer confidence - other statutory aims e.g. protecting customers, is ignored because of this.

Garry_Anderson

Homer> Garry, EdInvestor has been making some points which in my opinion are valid and balanced and you have failed to respond to them, you have just started "clue'ing up" those that might take Eds point on board which detracts from your point of view.

I quickly scanned posts before writting that post - I would never ignore valid arguments - you have not seen me do that.

It was best I could do at time without breaking it all down - which I have now done (please see above).

H> You sound like you are the only authority in this by this tone and it is this tone that got peoples backs up last time.

My tone is confrontational - because of attitude of some here - they are closed minded or blinkered - to say the least.

Conflating enducement with purpose of endowment is demonstration of this.

Anybody that thinks they have logical counter argument can either put up or shut up.

H> I have agreed with you in terms of your logic does seem sensible. However I believe that it wouldnt be too difficult to place logic to any situation if you are convinced that your theory is correct.

It is not theory - it is logical conclusion of the facts.

Please try make the facts fit the finance experts 'fairy story' - the world were endowments are fit for purpose of loan repayment - ignoring fact that "markets can go down as well as up"

H> I asked you a question about what you thought would have been the situation without the FOS and you did not answer this. You just bounced the question back - it doesnt matter what my thoughts are, I just wanted to know what you thought should have been done in the absence of the FOS and how it could have been handled to your liking.

Wrong.

I answered, "Obviously the public will have even less confidence in the markets and in the authorities to control a corrupt maverick finance industry. Which is why the FOS is a Public Relations excercise - allowing corrupt businesses to keep most the profits from their 'mis-selling'. Isn't it really nice for these crooks - keeping your money that they used to pay their wages, commission etc."

H> I think you should stop with the " let me clue you up" attitude and deal with the points that have been raised. I am not looking for an argument, just sensible posting.

This was what happened - I explained why in it - the attitude was entirely because of attitude of some other posters.

Please tell me where I am wrong and let me know if I missed anything Homer

Garry_Anderson

Vinno> My problem with the FOS (and I agree it has a place) is that it was put in place to stop the need for court action hoping that complaints resolution could be arbitrated.

Exactly - this fits with my analysis, "The FOS are part of the cover-up i.e. it is not access to justice - merely mediation for criminal actions."