Parents told to sue company - help

ManicMum

Hello

I am posting this on behalf of my parents. they took out a 25 year endowment in Sept 1988. Thay have tried to claim compensation but have been told they can't and must sue the company. they are not the most financial savvy in the world and neither they nor I understand the reasons for ombudsman advice. They initially went through a No win, no fee company (much to my horror) and have also since then contacted the ombudsman themselves but given the same answer. The company is still trading.I know there is a date in 1988 which is the cut-off for being able to make a complaint but not sure when that is.

My Dad has told me he was promised 80k but looking at 30k when it matures in 2013.

Also, if they sue the company, is that something you can do yourself? Sorry to sound ignorant - just have no experience in these matters. I can't see them wanting to get into expensive litigation.

many thanks moneysavers.

Money_Saving_Professional

The idea of the Financial Ombudsman Service is to try and resolve complaints from people like your parents who think they've been mis-sold an endowment. If they have a legitimate compliant (and they can't sue for the sole reason that their endowment is performing poorly), your parents should contact the company who sold them the endowment in the first instance to give them the opportunity to put it right. There are set time limits for this.

If this is not satisfactorily resolved, your parents should then go to the Financial Ombudsman Service for redress. All this will depend on the nature of the complaint and whether this can be proved etc.

There's a lot of information on the Financial Ombudsman website which should help and explain more.

dunstonh

Couple of things...

1 - Was the application signed before March 1988?

2 - for the FOS to reject it, they must first have gone through the internal complaints procedure with the company and been rejected.. And a claims company has been involved as well. So, through all that, they have had multiple rejections. Why do you think the courts will be different?

Also, if they sue the company, is that something you can do yourself? Sorry to sound ignorant - just have no experience in these matters. I can't see them wanting to get into expensive litigation.

Very few go down the legal route as more fail than succeed. The product has failed but that is due to investment returns. Not due to bad advice. So, you would have to prove to the court that the advice given was totally unsuitable. What evidence have your parents got to show that the advice was bad?

The other thing to note is that most endowment complaints are rejected. The majority of those that get redress get is not because of mis-sale but because of lack of evidence. Many files were lost, damaged and destroyed over the years as there used to be little need for them in the past so they were treated accordingly. For the firm to reject the complaint, the claims company have no success and the FOS to reject it would suggest that there is sufficient documentation still held on this case that supports the recommendation made. That same documentation will be used to support the firm in court. This will include documents that have risk warnings on them that they could get back less and that the values are not guaranteed.

You will typically find most solicitors would put you off going to court as the chances of success are low and you could end up with a bill. However, at the end of the day, the choice is theirs.

If they have evidence of that promise of £80k then they have very good grounds. However, i suspect they dont. Also there is the issue of memory. Take the following two statements. "on maturity you would get £80k". "on maturity you could get 80k". The first would be something you could complain about. The second you cannot and is acceptable. So, going back 22 years, which was said? would or could.

I also suspect that the 80k is not the target figure as 30k seems very short if that is the case. What is the target figure?

Also, the endowment would have been heading short for nearly a decade. The statements would have carried warnings that there is a high likelihood of shortfall and that they should prepare for that. Have they acted on these? (again the sort of evidence that will be presented will be that they were told for 10 years it was drifting off target and yet did nothing (assumption if they havent)).

SouthCoast

The OP indicates that the parents have lost £50k. If they lose the court case they could lose a similar amount but this time it will be real money.

Rick62

I find it hard to believe that the Ombudsman would tell them that they 'had to sue' the provider.

Going to court takes a lot of time, some expertise and, for a case like this, would probably require a good commercial lawyer, who would be hard to find and would cost several hundred pounds an hour.

SouthCoast

Rick62 wrote: »

I find it hard to believe that the Ombudsman would tell them that they 'had to sue' the provider.

Going to court takes a lot of time, some expertise and, for a case like this, would probably require a good commercial lawyer, who would be hard to find and would cost several hundred pounds an hour.

But if the ombudsman’s final decision [FONT=MetaBookLF-Italic,MetaBookLF-Italic][FONT=MetaBookLF-Italic,MetaBookLF-Italic]doesn’t [/FONT][/FONT]find in favour of the consumer, the consumer doesn’t have to accept it – and it doesn’t become binding. The consumer is free to go to court instead (depending on any court requirements or restrictions – for example, on time limits).

http://www.financial-ombudsman.org.uk/publications/factsheets/final_decision.pdf