Endowment mis-selling - Ombudsman

LSP

Originally posted in wrong thread.

Our question

Quote:
We referred our mis-selling to the Ombudsman in August 2006. In August 2007 an adjudicator upheld our complaint. Unfortunately the Firm requested an Ombudsman decision. Again in 2008 another Adjudicator upheld our case and again it was referred to the Ombudsman and after answering numerous questions it still with the Ombudsman. Has anyone else experienced this, and is it likely that the Ombudsman will dis-regard his adjudicators and rule against us.


Reply received afterr original post.

The ombudsman doesnt overturn many but is does sometimes. Usually a firm will only request it to go before an ombudsman if it feels the adjudicator has made a bad decision. IFAs tend to have more success in overturning adjudicator decisions than a life company or tied agency firm. Often because the IFA is higher qualified and more knowledgeable than the adjudicator. However, you are not going to know until its looked at.

We have now had a provisional decision from the Ombudsman and he has overturned the previous two Adjudications. He says he has made his decision on probability but we have provided evidence in the form of a copy of our original application form completed and signed on 10th August 1991 and a copy of the Illustration dated 16th August 1991. A copy of which we never received. Copies obtained from Aviva who took over Provident Mutual. The illustration was never discussed with us therefore we were not aware of the risks involved. The original adjudicator checked if any illustrations were issued prior to the 16th August and there wasn't.

We now have until 16th January to submit any further edvidence.

We feel completely let down by the FOS. Can anyone help us or have anyone been in a similar situation. Any advise would be much appreciated.

turbobob

All you can do really is put together a reasonable appeal setting out why you think the ombudsman is wrong. Presumably there is more evidence than just an application form and a post dated quote?

LSP

Unfortunately, we are dealing with a small IFA practice. The person who sold us this policy was not employed as a IFA he was our accountant who was an agent for the firm of IFA's. Hence correct procedures were not carried out. But the Firm is saying they were, so our word against theirs.
Obviously we have the fact that 3 different adjudicators have taken our side but the Ombudsman has over ruled them on 'probability' that the IFA had done things correctly and dis-regarded the dates on the applicatiion form and illustration. Very very frustrating and I believe makes a mockery of the FOS. These adjudicators have spent 4 years on this case for the ombudsman to say they were wrong in upholding our complaint. There must be something wrong with how they train them if all three got it wrong!

dunstonh

Obviously we have the fact that 3 different adjudicators have taken our side but the Ombudsman has over ruled them on 'probability' that the IFA had done things correctly and dis-regarded the dates on the applicatiion form and illustration.

Unfortunately, adjudicators are often lower qualified and experienced than the IFAs. The ombudsman tends to be much higher qualified and experienced.

There must be something wrong with how they train them if all three got it wrong!

Yes. The financial services firms often feel the same way at times as there is often a lack of consistency. Sometimes brought about by the use of external checkers who may not have the required skills or time.

and a copy of the Illustration dated 16th August 1991. A copy of which we never received.

Whilst you could argue if the illustration was issued or not (no evidence to support you or the adviser on this one), the life company would have issued one with the cancellation rights. So, you would have got it at some point. The FOS generally dont put much weight on the illustration and Key features document anyway. If they did, it would support advisers more than consumers.

The most important document is the reasons why letter/suitability report. That wouldnt be as comprehensive as one issued today but complaints are measured on the rules that were in place in the year of the recommendation and not what they are now. This can mean that complaints going back many years can often have a different outcome to say a similar complaint made on a more recently case.

The IFA would still need more documentation to support their case though than just an illustration and an application.

LSP

Quote
The most important document is the reasons why letter/suitability report.

Could you please explain what these are. The IFA have supplied copies of all their paperwork but haven't received anything headed as above.

dunstonh

Could you please explain what these are. The IFA have supplied copies of all their paperwork but haven't received anything headed as above.

It has had various names over the years. It is basically a summary report saying why you should take something out, what alternatives exist and why those alternatives have been discounted in favour of the recommendation. It would also contain the key risks and negatives as well as positives.

turbobob

Were they a requirement in 1991? I know there were a lot of changes in 1995 and thought that might be one of them. But its been a while since I was handling these complaints

dunstonh

turbobob wrote: »

Were they a requirement in 1991? I know there were a lot of changes in 1995 and thought that might be one of them. But its been a while since I was handling these complaints

Not sure. Its before my time. Wasnt just a shorter summary required back then?

This highlights the problems with complaints from a different era. Its hard to remember what was required in different periods.

LSP

The point of this complaint was that no alternative products were offered, and the fact that the fund may not eventually pay off our mortgage was never mentioned. We originally had a pension mortgage on the advice of our accountant (the agent for the IFA) but after 3 years, and with a growing family we found it too expensive so asked him for advice on a cheaper option. He advised an Endowment, gave us the form to complete and sign. That was it. Nothing ever received in writing. This is the accountant who had us taking out a new pension every year instead of adding to existing pensions. Obviously made good commission from us!!!! I admit we were financially naive but we trusted this man to advise us.

noh

LSP wrote: »

.................................................
This is the accountant who had us taking out a new pension every year instead of adding to existing pensions. Obviously made good commission from us!!!! I admit we were financially naive but we trusted this man to advise us.

That may well have been the least expensive option.

dunstonh

One of the most common reasons for people buying an endowment mortgage was that it was often 5-15% cheaper on the monthly payments.

This is the accountant who had us taking out a new pension every year instead of adding to existing pensions.

Not uncommon for legacy pensions as life companies came out with new versions. Plus, if you fell either side of 1988 then pension rules changed and you couldnt top up pre 88 contracts.

Not trying to support what they have done as we dont have enough facts but your reasons so far are circumstantial and assumptions which are easily countered.