Report Endowment Misselling Compensation SUCCESSES

vinno65

dunstonh wrote: »

There are time bars in law so its nothing unsual. The idea is to stop those who really knew there was a risk from hedging their bets and waiting to see if there will be a surplus on maturity or not. If there is they wouldnt complain, if there wasnt, they would. These people clearly know the risks involved and would be looking for opportunistic compensation.

Those that were genuinely mis-sold would be aghast at warnings of not hitting target at the first instance of being told. So, giving people three years to complain after being told there is a significant risk of shortfall is plenty time enough.

Not quite true Dunston.

The Idea or redress as you well know is to put the customer into the position they would have been had they been sold a repayment mortgage. So if these "chancers" you refer to waited to see if there was a surplus at maturity and there wasn't, they would only be paid redress enough to pay off their mortgage.
In my situation when I was made aware of the shortfall I would have quite happily paid my premiums to maturity if the provider had promised to at least pay of my mortgage as they had said they would do at the point of sale. This however was not an option. Now you have to ask yourself why if as you contest many endowments will go on to pay surplusses at maturity and everything is not as bad as it seems. There can only be one answer and that is that the providers are not prepared to take the risk(though they were quite happy to let customers to).

I have asked you on other posts and you have yet to answer, but why do you think providers never offered the option of making up any shortfall at maturity?( the Pearl promise goes some way towards this but is a fixed amount, and some people think it's not much of a promise anyway and may well be broken) If they had any confidence in their product then surely this would be a cheaper option than actually paying redress.

Now that that the option to pay redress has been utilised the time bar seems a convenient way to bar genuine complaints on a technicality and save themselves vast amounts of money.

The fact that it now bars people from waiting till maturity to complain is a handy aside.

regards Vinno

dunstonh

Not quite true Dunston.

The Idea or redress as you well know is to put the customer into the position they would have been had they been sold a repayment mortgage. So if these "chancers" you refer to waited to see if there was a surplus at maturity and there wasn't, they would only be paid redress enough to pay off their mortgage.

The issue of time bars and opportunistic claimers was raised in FSA document CP158 I believe as a reason for time bars.

In my situation when I was made aware of the shortfall I would have quite happily paid my premiums to maturity if the provider had promised to at least pay of my mortgage as they had said they would do at the point of sale. This however was not an option. Now you have to ask yourself why if as you contest many endowments will go on to pay surplusses at maturity and everything is not as bad as it seems. There can only be one answer and that is that the providers are not prepared to take the risk(though they were quite happy to let customers take the risk).

Most of the providers would have accepted that. NU, Pru and most providers offering unit linked contracts would almost certainly pay out less than they have. The problem was that some of the weakest couldnt afford to take on that risk. It could have pushed them under. There is also the issue that the many providers are making some pretty big profits at this time in the economic cycle so its easier to pay them now than in the future when things may not be as good.

The solution they came up with is flawed. We all know that. It gave birth to claims companies and created more bad feeling than adding a clause onto to the policy of a 100% maturity. However, the FSA obviously felt that was the lesser of two evils rather than have to see some insurance companies go insolvent later on down the road.

If they had any confidence in their product then surely this would be a cheaper option than actually paying redress.

They have to underwrite the guarantees and that involves costs they dont want to take on.

Now that that the option to pay redress has been utilised the time bar seems a convenient way to bar genuine complaints on a technicality and save themselves vast amounts of money.

Correct.

vinno65

Dunston, do we agree on something!
I think I'll have a lie down.

regards Vinno

dunstonh

I think agree more often than that. It's just very easy for the threads to pick out small areas of disagreement and blow them out of proportion.

mayb_2

"There is also the issue that the many providers are making some pretty big profits at this time in the economic cycle so its easier to pay them now than in the future when things may not be as good."

If this is the case dunstonh surely it does not make sense to tell people:
"Also, being an NU plan it may not be as bad as you think. NU do not normally include their terminal bonuses in the projections and there a mortgage promise value to add on top as well. When these are taken into consideration the actual size of the shortfall may be much smaller."

A shortfall is a shortfall is a shortfall.

I think it is also necessary to warn people that companies do not have to pay a terminal bonus at all. As a large part of with profits policies were based on the payment (amount unspecified at sale) of a terminal bonus this represents a large risk to the return- which you wont find out about - until the end.

The one thing we do believe to agree on from your post is that the FSA was more interested in protecting the companies than the consumer, or Vino's solution would have been adopted to benefit the majority of consumers - rather than the one adopted to benefit a minority of insurance companies.

dunstonh

A shortfall is a shortfall is a shortfall.

A shortfall is a shortfall as you say but the only at maturity. Example projections are no guarantee of surplus or shortfall and there are plenty of examples of endowments that have had shortfall projections that have gone onto provide a surplus.

The one thing we do believe to agree on from your post is that the FSA was more interested in protecting the companies than the consumer, or Vino's solution would have been adopted to benefit the majority of consumers - rather than the one adopted to benefit a minority of insurance companies.

You have changed my meaning a bit there. The way the FSA chose probably protected a few insurance companies from going under. It didnt save them enough to allow them to actively trade in new business. Many big names have gone from the market place. Insolvency would have impacted on more people had that occurred so it was the lesser of two evils.

mayb_2

I understand what you are saying dunstonh and have to agree that many would have suffered more if firms stopped trading altogether. However, I know for a fact that some companies like the CIS (personal affliction as you know) and others are doing very nicely thank you but are still not paying out on these policies. At the time the CIS were declaring they may not pay a terminal bonus at all, they were doing very well with their internet banking business. They chose to delay the merge of the banking and insurance business at this time - I wonder why? Why should these companies not be forced to share the profits some of them are now enjoying with their customers who innocently invested with them. You know the upturn in the market has not benefitted all of the 'investors' as these companies are looking after themselves first. This is morally wrong when you look at the promises made by these companies - for mortgages, pension and savings. The CIS in particular will give itself a pat on the back for its ethical investments????

The financial services industry is basically a parasitic one and should be made to address the ethical questions that arise time and time again. Whilst the FSA seeks to protect them over the consumer, confidence is unlikely ever to be restored in the industry. If it was not for people like Martin Lewis and other media activists many other scams would go unaddressed. Bank charges MEAFs and loan scams to name but a few. The subprime market failure is now not just hitting the fan in America but is now affecting Spain as well - wonder how we will be made to pay for that one when it gets here. We don't owe these companies our money and the regulation of this market is unique in its rules and the application of them - yet we cannot escape the need to have mortgages and pensions and if we are lucky enough savings too. Student Loans for instance - how can we accept the launching of a young carear must be based in debt.

I end the rant but cannot promise not to keep repeating it.

smigger15

I've had my claim against Scottish Amicable (now Prudential) in for nearly 2 years, the caseworker from the FSA has leaned in my favour but the ombudsman has to have the final word, this must have been sitting on his desk for at least 18 months, i get a regular letter from them stating " due to the volume of work blah blah blah....". i have emailed them last week but still waiting for a reply. :mad: This is what i get for buying from an agent and not S.A direct !!

Has anyone a similar story ?


cheers

iwsurfing

Company: Standard Life
Compensation: £1,400

I didn't think I had any chance at all of getting compensation (even though the salesman just kept saying "you'll end up with a nice little nest-egg when the endowment pays out"), as there wasn't anything written down in my paperwork.

Nevertheless, encouraged by this site and the postings, I thought I'd give it a go. I completed the standard proforma from the website and sent it off. A couple of weeks later, I got some forms from SL to fill in. Did that, not expecting any positive result, but another few weeks later received a letter from Standard Life offering £1,400 comp!!!

Success as far as I'm concerned!! Well done, Martin!

dunstonh

This is what i get for buying from an agent and not S.A direct !!

It has nothing to do with it. Apart from the fact that the ratio of mis-sales is much higher with tied agents.

The FOS dont treat tied agent and IFA sales any differently and timescale is no different.

Also, the FSA dont get involved in cases and do not influence the FOS apart from the setting of rules.