Report Endowment Misselling Compensation SUCCESSES

mayb_2

geoffrey6963 have you tried the company itself - I had to trace an old mortgage recently (reclaiming exit fees £100) and I managed to track down the company - it had changed names but they had the records and were able to give me the information I needed and eventually my money back.

tgon

Am very late in reporting my success but I was very happy with the outcome of my complaint for a mis-sold endowment by a Barclays representative. I used a template from the Which? web site and stated my case, waited 12 months, had 2 chats with the Ombudsman and stressed out over words I didn't understand. But the result were satisfactory and verified by the Ombudsman and an IFA. Job done!

mayb_2

tgon - good for you - I have used the Which model too, very useful site. They used to have a link to a redress calculator on their website - it was free but I understand there is a charge of £50 now.

Logsy

Guardian Financial Services
£6,500

Thank you so much, thought I was out of time but read about successes here and used letter template and the cost of a stamp. Received a reply in a month. They asked me to fill in a mortage history form which I finally got my act together over and their offer of compensation and my form crossed in the post. Original offer 6,900 but after form 6,500. Which I think is mainly due to the value of the endowment on the day.

Thank you so much - was over the moon

pesky_pony

Bank: Abbey National

Compensation: £6400

Story: This was my boyfriend's endowment from a house he owned in Scotland years ago. He kept the endowment going and hasn't used it in conjuction with a mortgage for years. I nagged him into having a go at claiming and as you can see, we did well!!
We are going to have an excellent Christmas this year. Thank you so much for the inspiration. :T

RogerW_3

dunstonh wrote: »

"A number of providers have used lower projection rates to get their endowments treated as a high risk of shortfall to get them time barred quicker."

If a policy provider deliberately understates the projection value in order to artificially and prematurely start or maintain a time bar period then that effectively amounts to an attempt to defraud the policy holder. That would seem to be a criminal act.

I currently have a complaint lodged with the FOS that uses examples, based on annual with profits funds investment return rates issued by Phoenix, that clearly show that the projection estimates issued by Phoenix/Resolution were deliberately understated and I have argued that the projection letters should not have been "red" if correct projection figures had been issued to me and thus the complaint cannot be time-barred.

The manner in which Royal/Phoenix have manipulated and abused the "projection letter" rules issued by the FSA is nothing short of scandalous.

I got Phoenix to admit in writing that they are using with profits funds to compensate mis-selling complaints, which clearly deprives me of funds that should accrue to my policy maturity value (as well as many other policy holders) and the FSA have advised me by e-mail that Phoenix should not be using those funds for compensating. FSA say that shareholders should fund the compensation. Pretty logical stuff - why should policyholders compensate other policy holders for the mistakes of the managing policy provider. FSA have advised me that they will investigate the matter because it potentially affects many other policy holders.

I have therefore also argued to the FOS that the projection figures that have been issued were incorrect because the compensation that apparently has been illegally paid out of with profits funds needs reinstating to those funds along with "lost" investment gains that should have accrued, and thus again a "red" alert letter should never have been issued because my projection values should have been higher.

There are many other matters that I have raised with the FOS about how unfairly Royal/Phoenix have dealt with my complaint matters, including Phoenix first claiming that I had taken out the policy directly so that they could falsely reject the complaint, only for me to reply that Royal Life had written to me in 1986 advising the details of their own sales contact!

They even claimed that I was sent a policy illustration even though they admitted that had destroyed all policy proposal documents and cannot prove the same. Reality is that did not give me one and the policy acceptance letter does not refer to one. So, again they rely on story-telling.

Having turned the Phoenix Claims Handler inside out, and having got him to admit several things that perhaps Phoenix would not like, Phoenix wrote to me and said they would not answer my last comments and arguments or any future points that I might raise. So one of my arguments to the FOS is that Phoenix have not fully considered my many complaint matters.

Royal & Sun Alliance/Phoenix have also been issuing projection letters containing advice as if I still had a mortage and thus a shortfall to repay, even though Royal had previously acknowledged that the policy no longer secured a mortgage. So the advice they provided in those projection letters was entirely meaningless. Computer generated letters evidently don't take into account the full circumstances of a policy holder - another matter for the FOS to look into as this indicates poor quality and record control.

It will be interesting to see how the FOS deal with my complaint because I have raised many very awkward questions, particularly regarding how "red alert" letters have been issued based on deliberately false and understated calculations, details of which are not provided for the policy holder to analyse for correctness and completeness. I have also requested that the FOS consider whether Royal/Phoenix rejected complaints need to re-visited as a result of the observations I have made in my complaint.

Unlike many policy holders, the amount of comnpensation that may eventually receive is not the key reason for my filng a complaint with the FOS.

The real issue is the principle of fairness that needs to be upheld by the FSA/FOS and it is my hope that all mis-selling complaints that have been rejected on the basis of time-bar caused by deceptive, deliberately understated and misleading projection figures (for which the providers issue no information on how the figures are calculated) are ordered re-opened by the FOS/FSA.

mayb_2

market confidence: maintaining confidence in the financial system;

This is and always has been the first remit of the FSA. Like you RogerW I thought that once the breach of the financial regulations committed by the company in question, in this case the CIS, was pointed out to the FSA it would act to ensure the company addressed the issue as a whole and ensure the Company responded properly to our complaint.

The Company had closed the fund that held our endowment policy and had not advised us of the fact and had continued taking our money without ever giving us information on the poor performance of the policy. Two breaches of the regulations.

The result was that although the FSA said they took the matter seriously and we could rest assured that this would not happen in the future and we could be happy in the knowledge that others would be protected from this etc etc. We found that the CIS site, where the original information had been shown that led to our complaint, was withdrawn immediately and all links were cancelled. So evidence disappeared immediately. The Company were never sanctioned by the FSA as shown by the FSA site itself. The FSA did not have to tell us what they had or had not done under the Freedom of Information Act as it was information that could be used in a court of law,and so protected.

I would be very interested to know if you have a different outcome to your complaint.

The FSA took no action regarding the Northern Rock situation if you recall - there is no doubt where their first loyalties lie and it's not with the consumer.

RogerW_3

mayb wrote: »

market confidence: maintaining confidence in the financial system;

This is and always has been the first remit of the FSA.

If maintaining market and financial system confidence is the first remit of the FSA, then it is paramount for policy holders to be treated in a fair and reasonable manner and for the FSA to require policy providers to issue accurate policy projection figures supported with detailed calculations. Clarity breeds confidence.

There can no be confidence in a market or financial system that issues deliberately understated and unclear projection values for the sole purpose of prematurely issuing red alerts that are intended to defraud policy holders out of their underlying right to file a complaint.

Nor can there be any confidence if with profits funds that should be shared by all policy holders are being diverted to compensate a few but not all of those policy holders, and result in maturity values being reduced, especially when that compensation should be paid by shareholders instead.

Effectively, it seems that every time-bar rejected Pheonix complainant is being hit with a "triple whammy" because aside from projected maturity values being reduced due to with profits funds being used to illegally compensate other policy holders, this situation causes the incorrect and possibly fraudulent issue of red alert letters and commencement of time bar, which then causes the rejection of what would otherwise be a legitimate entitlement to compensation.

This inequitable and seemingly illegal situation indicates that there needs to be a new major review by the FSA. This issue needs sorting out before FSA agree to any merger of Resolution Group with another company.

If the right to complain is being rejected because time bar has been artificially started due to understated projection figures then clearly the FSA need to act and urgently rectify the situation.

The "red alert" idea of the FSA is clearly being abused and manipulated by policy providers in an unfair and unreasonable manner that was not intended by the FSA regulations.

And lest we all forget, the FSA has publicly announced that it is closely monitoring the quality of information being issued by policy providers.

The provision of understated or incomplete projection values clearly equates to unacceptable quality of information being issued by policy providers.

The FSA must live up to its commitment to ensure that the information provided by policy holders is clear, complete and accurate and that the projection calculations and how they are derived are properly detailed and explained to policy holders.

At the end of the day, any projection figure that is not supported by calculation details and an explanation is entirely meaningless to the policyholder because the policy holder cannot relate the projected figure to his guaranteed benefits, existing accrued annual bonuses and any additional projected future investment returns based on his future premium payments.

Those calculations must exist and I have asked the FOS to obtain details for my policy because I am convinced that they will demonstrate that I was misled by Royal/Phoenix.

I provided some example calculations on this subject for the FOS to consider as it seemed to me that the projection figures quite simply did not make logical sense and were incorrect - albeit I did stress that my calculations may not be a correct interpretation simply because Royal/Phoenix did not explain how they calculated their projection figures.

A bit of a double edged sword for the FOS to investigate, as either way, I seem to have been misled by the poor quality information issued by Royal/Phoenix.

If the projection also excludes any allowances for terminal bonuses or distribution of so-called "orphan funds" then the projection figure is quite simply deliberately misleading, especially given that the projection letters do not identify whether or not terminal bonuses were included.

As I have pointed out to the FOS, how can any policy holder form an opinion on the relevance of the projection fgure if the policy provider does not advise what is or is not included for in that projection figure?

In simple terms the policy provider has avoided providing the policy holder with the necessary information that he needs in order to reach the conclusion that he needs to file a complaint, and he can only be placed in that position once the policy provider issues that missing information.

I am reminded of the legal principle of "acts of prevention" because the policy provider is deliberately withholding information that would cause the policy holder to file a complaint, including one that the "red alert" had been incorrectly issued! That act of prevention would cause any applied time bar to become legally invalid.

As part of my complaint correspondence I requested Phoenix to advise me what was included for in the projection figures. They avoided providing an answer - perhaps an indication that I had a valid point that they did not want to admit would prevent them from rejecting a complaint based on time-bar. I have noted this "avoidance" in my complaint to the FOS and requested that FOS order them to belatedly provide that missing but pertinent advice.

By providing understated projection values, the intent would also seem to be to persuade the policy holder to take out additional (but unnecessary)investments to cover an overstated shortfall amount. So the policy providers seem to be abusing the red letter/projection value system in order to generate new business.

How can that create confidence in the financial system? - instead it just makes misled policy holders more infuriated and have less confidence.

The FSA must ensure that no complaint filed by any policy holder has been unfairly rejected because projection letters contained misleading, incomplete and inaccurate projection figures.

mayb_2

I cannot agree with you more on the validity of what you are saying, but in my personal experience of the FOS there was a deliberate ignoring of such blatent evidence. Even though I complained to the highest level of the service, all they wanted to ivestigate was whether the FOS followed the correct procedure in handling my case - they would not look at the case itself only the way it was handled. Nobody appeared to have the power to make them look at all the evidence. In fact I recall a letter from the Ombudsman saying he wasn't obliged to consider all of the evidence.

What can you do - in the end I ran out of steam and money. We did obtain a higher settlement from the Company - but without any reasons being given for that, but assumed it was the result of pressure we had applied. We got our money back instead of our money and profit, whereas the original amount proposed would have been less than we had paid in.

I have the lowest opinion of both Ombudsman and FSA - when you go below the surface you find that they are not really there for you. The problem is that nobody else can benefit from the exposure of these practices, if there is no public exposure of such breaches of the Financial regulations committed. That leaves each consumer affected in the same way to fight their case individually. Not everyone will be able to do that so the firm gets away with the behaviour unless challenged each time.

Not good enough.

Good luck

dunstonh

There can no be confidence in a market or financial system that issues deliberately understated and unclear projection values for the sole purpose of prematurely issuing red alerts that are intended to defraud policy holders out of their underlying right to file a complaint.

Its not deliberate in many cases. Older conventional with profits plans in particular didnt have the facility to issue projections as there was no requirement for them to do so. So, a common response was to project by using the surrender value as the daily value. Now obviously this understated the potential returns because the surrender penalty lowered the value. Also, historically, terminal bonuses would not be included in the values but shown as an additional entry. So, they often got left off as well.

It was not uncommon to see Standard Life projections at the lower rate give you values which were lower than the guaranteed minimum maturity.

The FSA rules are that the projection rates should be no higher than the set projection rates (of 4, 6 & 8%) but can be lower if the underlying assets are not expected to return that sort of range.

There is also no requirement to give a red, amber, green warning. You can show red and green only.

If the right to complain is being rejected because time bar has been artificially started due to understated projection figures then clearly the FSA need to act and urgently rectify the situation.

Why? If someone believes they were mis-sold then they were mis-sold regardless of the returns. If by using lower projection rates it makes the projected values worse then that should spur that person on even more to make the complaint.

If the projection also excludes any allowances for terminal bonuses or distribution of so-called "orphan funds" then the projection figure is quite simply deliberately misleading, especially given that the projection letters do not identify whether or not terminal bonuses were included.

Distribution of orphan funds cannot be included in projections because there is no guarantee that a distribution will take place and if it does there is no guarantee that it will be added to the plan. i.e. NU are paying it by cheque direct to policyholder.

Final bonuses are where you often get differences but as long as you know if it is or isnt included, then it is not a problem. Historically, they were not included but some have included them in recent times. The call centre staff, when asked, just dont know and often give their opinion which is often incorrect. Quality of call centre staff is a whole different issue though.

As I have pointed out to the FOS, how can any policy holder form an opinion on the relevance of the projection fgure if the policy provider does not advise what is or is not included for in that projection figure?

That is an important issue and one that I get fustrated with. When doing reviews of endowments I usually end up having to write in twice. Once to get the figures and then once again to get written confirmation of what is and isnt included in the figures. I daren't rely on the phone call to the call centre as that will usually be inaccurate.

By providing understated projection values, the intent would also seem to be to persuade the policy holder to take out additional (but unnecessary)investments to cover an overstated shortfall amount. So the policy providers seem to be abusing the red letter/projection value system in order to generate new business.

That arguement wont get you far. They are closed for new business.

I have the lowest opinion of both Ombudsman and FSA - when you go below the surface you find that they are not really there for you.

I know you dont like them because they didnt uphold your case mayb but they are percieved as being too consumer biased. I think the problem is one of inconsistency. There are plenty of examples where FOS decisions dont follow any logic and upheld in favour of the consumer or the adviser. Even those that have worked for the FSA and FOS and were involved in setting up large scale reviews have admitted that too many consumers were being paid redress when it was not due to them.

The problem is that there are an awful lot of people jumping on the bandwaggon seeing endowment complaints as a way to make some money. So, they lie about what they were and were not told. The advising companies dont like this so they get defensive. A large number havent helped themselves by not having good record keeping so things are not always black and white. This has led to the genuine complaints being swamped by opportunistic complaints (by about 3 to 1).

The FSA and FOS in reality are not consumer biased or company biased. They are just inconsistent and focus on things that really do not matter.

For example, if you look at the upheld complaint stats it quite clearly shows that salesforces have the most upheld complaints than any other distribution channels. Indeed, 12 of them account for over 2/3rds of all complaints. So, what is the FSA doing about it?

Well, the FSA has proposed removing the ability to complain to the FOS for "Primary" advisers. Primary being the salesforces. Their reason is that the current distribution channels are failing. Yes they are but you dont fix it by giving the worse offenders an even larger remit to mis-sale.

I cannot believe the FSA is so removed from the real world and isnt aware of the issues. Any IFA can tell you where the problem IFAs are and where the problem tied agents are. There are some very easy ways to fix it as well. However, they are not bank friendly and if there is any bias at all at the FSA then it is towards the banks.