FOS rewards the mis-selling wrong-doers etc.

dunstonh

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.

This is where your whole arguement falls down. You are effectively ruling out any borrowing when investing which is plain silly. Just because you dont like it, doesnt mean that others shouldnt like it either.

Garry_Anderson

Ed> Not sure that people normally blame "rogue IFAs" do they? Most endowments were (mis)sold by tied agents AFAIK, you can see just from this forum that the majority of complaints are going either to the insurance company or the bank/BS which sold both the endowment and the mortgage.

Sorry - you are right - the post was a rush job - I was thinking about IFA's on the board at the time and how they were not solely the ones to blame.

These posts were rushed also - so I expect to have hand rapped again

Garry_Anderson

Dreamer> Sorry I missed the bit when I ever pretended it was all 'rogue' IFAs. As I'm sure dunstoh will confirm, the majorty of complaints are upheld against tied agents for life companies and bank/buiding societies.

Yes - I knew and have apologised for that already.

D> All the charges and costs of the endowments are factored into the cost comparison on a RU89 calculation - this is the financial loss full stop.

Only based on what they paid in - not where they would be had they been on repayment path.

There shortfall had not been repaid - and there was no compensation (for reasons given earlier) - and the perps have not paid fine or penalty for their wrong-doings.

D> No you really don't do you? The borrower is not caught short if a policy was miss-sold becuase the redress plus the surrender value of the policy will return them to the position they would have been had they been given correct advice - i.e a repayment mortgage.

It would be obvious that I meant borrower - sorry - but you mislead people if you want to pass that off as ignorance.

They would have been on target had they been given correct advice - and not have to now find any shortfall.

D> In fact most will be better off - as an endowment mortgage will generally (particularly in the last few years) have been significantly cheaper then a repayment mortgage - yet this cost saving is not subtracted from the redress offered (unless the compensation has been worked out by the FSCS of course...)

So - this spare cash might have gone on holidays or starting a family earlier.

Again - They would have been on target had they been given correct advice - and not have to now find any shortfall.

You completely fail to grasp the fact that they now find themselves in greater financial difficulty.

D> If the endowment was more expensive then this additional cost is also refunded as part of the redress.

But there is still a shortfall because of the 'mis-selling' (fraud).

You completely ignore shortfall - we know why.

D> If you'd like to provide me with a statement from the serious fraud office that says that the sale of endowments was

always fraudulant then maybe the above make be a little more compelling.

You misrepresent what I have stated.

I have documentary evidence of communications from the SFO when they were devious and refused to answer simple questions.

They could not deny that it was fraud - I ended up faxing the head and accussed them of perversion of justice.

They are welcome to charge me with defamation - they will lose.

D> I've no desire to rehash the 'fit for purpose' argument - suffice to say we disagree?

Suffice to say you conflate it with inducement of extra cash

D> So that would be definition 2 then

2: act of correcting an error or a fault or an evil [syn: remedy, remediation] v : make reparations or amends for; "right a wrongs done to the victims of the Holocaust" [syn: right, compensate, correct] [ant: wrong]

So - you think reparations for amends for; "right a wrongs done to the victims of the Holocaust" - would be to let the wrong-doers go free - do you?

Clearly - people were deceived being sold something unfit for purpose - the perps should pay as part of the redress.

D> RU89 does address what was actually paid - if people would have had a repayment mortgage originally (over the same term as the endowment - incorrectly recommended terms is quite another issue) they generally would have paid more! If they have paid more of the endowment method then this will form part of the compensation!

This is bull - demonstrated by the fact that people at end of endowment have not been paid the shortfall.

D> Churning has its own form of redress in addiitonal to the cost and capital comparison - if this has not been calculated correctly bythe selling agent then the case should be referred to the FOS (who on current experience will uphold the churned issue).

We had paid around half the cost of our loan after 5 and half years - we got practically nothing for this.

D> Unless you can prove maicious intent - which you haven't, then punitive damages are not awardable under UK law.

The SFO certainly could not deny there was malicous intent - actual fraud - so I doubt anybody else could.

Garry_Anderson

Dreamer> This however is not the same as suggesting that the whole sale of endowments was a corrupt and fraudulant affair in its entirity - sorry Garry but your argument goes too far and the popularity of endowments and the subsequent fall out is a far more complex situation then you would like to state as fact.

Duh - popularity was because they had been lucky in the past - no big falls that made them short.

There is nothing really complex about the situation - no matter how much the 'experts' would like to pretend.

They do it several devious ways e.g. confating purpose with enducement.

That rules were changed is only one of many reasons why it could fail - the fact is it could and therefore not fit for purpose.

You are blind to this fact - we can all guess why

Garry_Anderson

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

Like - some people haven't always known and said that

Trouble being - the Telegraph only gives half the story.

Garry_Anderson

Garry_Anderson wrote:

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.

dunstonh wrote:

This is where your whole arguement falls down. You are effectively ruling out any borrowing when investing which is plain silly. Just because you dont like it, doesnt mean that others shouldnt like it either.

It is absolutely nothing to do with NOT LIKING IT.

It is about selling something "unfit for purpose".

How exactly could it repay this loan if markets drop?

Try reading a bit about consumer law.

"This is where your whole arguement falls down."

dunstonh

It is absolutely nothing to do with NOT LIKING IT.

yes it is. You dont like it therefore its not fit for your purpose. However, it is fit for other people who do understand how it works.

How exactly could it repay this loan if markets drop?

A drop in the early years on a monthly contribution can be great for overall performance.

Try reading a bit about consumer law.

Try reading economics.

"This is where your whole arguement falls down."

Effectively, you want a ban on borrowing to invest. That isnt going to happen. You would be taking away an individuals right to choose what it appropriate for them all because you personally (and no-one else) has a problem with it.

Garry_Anderson

Dunston> You dont like it therefore its not fit for your purpose. However, it is fit for other people who do understand how it works.

Ahh - how did I just know - you are still on that deception.

We know that conmen use enducements to defraud the public.

Without conflating enducement with purpose - is the purpose of endowment mortgage to repay massive loan for their home?

GA> How exactly could it repay this loan if markets drop?

D> A drop in the early years on a monthly contribution can be great for overall performance.

Duh - the market goes into a long decline or crash just before term is due - how is it repaid then?

Give us a break.

People here can see Dunston - you cannot even admit that endowment would not repay loan if the market drops.

Gosh - I wonder why people have been warned of shortfalls then.

GA> Try reading a bit about consumer law.

D> Try reading economics.

Economics cannot violate consumer law - I thought an 'expert' like you would know that

D> Effectively, you want a ban on borrowing to invest.

You misrepresent somewhat - we wonder why.

Firstly - investment carries RISK - it is a GAMBLE - you could LOSE MONEY - in recent years we have had the warning, "Investments can go down as well as up".

Many people have found this out themselves.

We have only just been properly warned because they knew they were about to be found out.

Contrary to your assertion:

It isn't borrowing to invest - that isn't why people borrowed money - it is borrowing to repay mortgage.

The finance firms and their agents used enducement of possible extra cash - so people used this investment method.

THEY ADVISED PEOPLE TO GAMBLE ON THE MARKETS TO REPAY LOADS OF MONEY THEY OWE - CLEARLY NOT FIT FOR PURPOSE - COMPREHEND?

dunstonh

People here can see Dunston - you cannot even admit that endowment would not repay loan if the market drops.

Im not talking about endowments. I have already said long ago that the pricing of endowments made them unsuitable for todays markets. I am on about the concept of borrowing to invest.

You misrepresent somewhat - we wonder why.

Every time I have said that borrowing to invest is fine for those willing to do it, you have said no its not.

Firstly - investment carries RISK - it is a GAMBLE - you could LOSE MONEY - in recent years we have had the warning, "Investments can go down as well as up".

In which case, no-one should be buying a house as that is an asset with a variable price. A nice 30% drop in house prices means people have gambled with house prices. How far do you want to take it?

It isn't borrowing to invest - that isn't why people borrowed money - it is borrowing to repay mortgage.

People are borrowing money against an investment with a fluctuating value. Whats the difference? (as per above)

THEY ADVISED PEOPLE TO GAMBLE ON THE MARKETS TO REPAY LOADS OF MONEY THEY OWE - CLEARLY NOT FIT FOR PURPOSE - COMPREHEND?

No. Still disagree. Not seen anything you have say so far that makes the concept of investment backed mortgages be not fit for purpose when used with the appropriate person.

As I have said a few times before, I agree with you on a number of points you have raised but I cannot agree with you on the above.

Investing is a "gamble" as you put it. I wouldnt put it as extreme as that because you can control the amount of risk you want to take. However, taking out a mortgage to buy a house is a gamble, so is borrowing money on a property to let out. So is investing for a particular goal, such as retirement. All you are doing when using an investment vehicle againt a loan is aiming to get more back on the investment than you pay on the mortgage. Some years you will, some you wont. Someone willing to accept the risk that goes with that and investing in an appropriate way should be allowed to do it and if they do it knowing the risks then it is fit for purpose.

nadnad

guys - I think you're gonna have to agree to disagree on this one!!