Report Endowment Misselling Compensation SUCCESSES

mayb_2

Not arguing with you about the FSA and the banks dunstonh but most of us will speak as we find. I am not the only one that has been dealt with in the way I described - as Roger W and many others show. The fact is that not everyone can see the wood for the trees and not everyone can work out what scam they are being robbed under.
I cannot be bothered to go over the who tells most lies argument as I will never agree with you on that one as you know. You will see it from a different perspective naturally.You cannot argue about the remit of the FSA though as the quote is taken directly from their website and says it all really.
If they began shouting about the fact that some of this was really happening to a lot of people - it would not exactly increase the consumer's confidence would it. I think they prefer to work covertly when they can - get the company to clean up its act, bury the evidence, pat it on its back and send it on its way. Just don't tell anyone they have done it.

As far as I and some others on here are concerned they have miserably failed in their first remit. You have to say that the Northern Rock fiasco is a true example of the working of the FSA - and even they couldn't bury that one. We now have tax payers money supporting a bank that messed up big time and isnt to pay the penalty for that. We all know they are not the only ones either and big banks everywhere are cutting back on the credit they will give their customers and mortgages are hard to get if you can't afford one. So it should have been in the first place - not everyone knows how many beans make five and they should not have been taken advantage of by greedy finance companies and commission seeking salespeople. Yes I do know not everyone acts that way - but far, far to many did whilst the Government and the FSA looked the other way.

gareth041

Hi All. I am new to the forums but have been getting the newsletter for a while now. I am an ex serviceman, Army, and took out a L&G Endowment early in my career without a Mortgage. The plan was to use the endowment when I was in a position to purchase a house. In the late 90's we, wife and I, bought a lovely house in Evesham and used the endowment for the house. We moved to the lake District in 98 and bought our house in Kendal shortly afterwards. In 2003 we stopped paying into the endowment and changed our Mortgage into a Repayment Mortgage. We have not cashed the Endowment in yet , or kept up the payments. L&G say it is worth circa £10k and I wondered if it was worth applying for compensation in my case? By the way the whole reason for not keeping up the payments was because of the "bad press" they were getting!
I would be grateful for anyone's opinions, good or bad, and also add my direct email, [EMAIL="gareth041@googlemail.com"]gareth041@googlemail.com[/EMAIL].
Thanks, Gareth.

dunstonh

I wondered if it was worth applying for compensation in my case?

Why?

Pre-sale endowments used to be upheld every time. However, the FOS is no longer upholding these cases for those in armed forces. So, you have probably missed the boat on that one.

mayb_2

Gareth041 have you actually complained to the company itself yet? If you use one of the template letters as a guide and complain to the company, you can then see how the land lies with them. There is nothing to stop you going to the Ombudsman if you are not happy with the company's response. The worst that can happen to you is that the company deny any misselling and the Ombudsman upholds that decision. It is worth trying if you believe you were missold this in the first place.

If as dunstonh says, 'Pre-sale endowments used to be upheld every time' they must have believed they were missold or thay wouldn't have upheld them at the time- can't understand why they would have stopped doing that for the armed forces. Probably realised that this could be expensive for the companies concerned. It does make you wonder about the actions of the FOS if they can just change their policy like that - when it becomes inconvenient perhaps?

dunstonh

can't understand why they would have stopped doing that for the armed forces. Probably realised that this could be expensive for the companies concerned. It does make you wonder about the actions of the FOS if they can just change their policy like that - when it becomes inconvenient perhaps?

The FOS do listen and have been known to change a position on provision of evidence. This happened where it was clear consumers were abusing the post retirement mortgage to get redress by saying they were retiring at age 55 or 60. Proof is now usually sought for those using that excuse if the age is under state retirement age.

It has been argued many times that pre-sale endowments for armed forces personnel was actually a good thing. Its hard to justify for anyone else but there has been pressure put on the FOS and it appears to be sinking in now.

When they leave the army, they lose their army provided accommodation and being out of a job with no house isnt a good position to be in. The pre-sale endowment allowed them to build up the lump sum whilst they were earning which could then be used at the end of their service to go towards a mortgage at that point. Initially it was argued that alternative investment products could have been used and there is a valid point there. However, when you consider that the alternative investment product before ISAs was usually an endowment, you realise that actually the advice was fine. Especially as mortgage endowments had higher life cover than "saving" endowments and that life cover was required to provide the spouse the lump sum in the event of death as she too would be turfed out of army accommodation sooner or later.

I was able to obtain the following as a copy and paste as a mitigating circumstance to the almost always upheld forward/pre sale :
There were circumstances where there was a very clear known expectation of future house purchase, such as armed forces personnel who lived in tied accommodation but would have to leave on leaving the forces. A similar situation might arise for other employments with tied accommodation or where favourable rental terms could be expected to be withdrawn at a future date. It may be hard to believe in today’s market but there have in the past been times of mortgage scarcity. If the forward sale achieved a firm promise of a mortgage when required, that could be a powerful and genuine justification.

mayb_2

If an endowment was missold it is because the risk of the investment not reaching the levels of return promised was not explained. In other words the purchaser did not know there was a risk to their investment. It is well not to forget that the person buying these was giving money to the company in exchange for a product, when it may have been better for them to put their money elsewhere. (in some circumstances under the mattress would have given a better return).

So a missale is a missale is a missale. It is not about what the product was to be used for so much as the return promised for it at the point of sale. It is about how it was sold - and on what basis the purchaser chose to buy it.

mayb_2

Gareth 041 I have copied this from dunstonh's reply to another 'forces' question.

Anyway, the company has told my mum that they can't help her because the policies were taken out when they lived in Germany while dad was serving in the forces.

That is correct. The consumer protection applies to mainland Britain and companies that are based in the UK. Companies based abroad didn't offer FSA/FOS protection in the past. Protection comes from the company that gave the advice. If they were living in Germany and saw a UK based adviser then thats different.

Quote:

The companies are British based and therefore subject to our laws I presume.

When the industry started to get rid of the dodgy advisers of old, many went into Europe where they could continue to sell products outside the regulation of the FSA. Ex-pat communities and armed forces were the main areas they picked on.

Lets hope your mum and dad were not one of the people they preyed on. If so I think the FSA should still protect the people of this country from missales wherever that advice was given in relation to a British based product. Its just typical that it can be said in the same breath that these were the dodgy advisors from here and that the FSA wont protect the people they dodgily advised. Is it the job of the FSA to find these loopholes I wonder. Who first thought of the 3 year rule on mortgage claims!

dunstonh

Who first thought of the 3 year rule on mortgage claims!

Probably the same person that allowed fraudulent claims by consumers to be allowed so easily.

mayb_2

dunstonh that comment was not worthy of you.

dunstonh

mayb, I suggest you take a read of the FOS publications. I read them each month as its always handy to know what the FOS think when dealing with complaints.

You will see cases where companies havent been fair. You will also see people just trying it on.

I know you like to think the consumer is honest all the time and financial services companies are the big evil but that just isnt the case. opportunistic claims are a big problem for the industry.

You have had one experience of a complaint that you made that wasnt upheld and I have had one complaint against me that was not upheld and fraudulent. So, thats one a piece. However, I also get supplied with complaints updates and given examples of the sorts of complaints being made and see more of it than you. If you saw what I saw then you would understand my comments. For every genuine endowment complaint out there, there are two trying on. Those that are trying it on are damaging the chances of success for the genuine complaints.

I have also instigated complaints on behalf of new clients where I have seen dodgy transactions. Its not all one sided to suit one or the other. Indeed, I reckon that if you removed the obviously fraudulent or opportunistic claims from the stats you would find the FOS uphold more than they reject.

I mentioned a stat before that was given to us to highlight the importance of keeping documentation and/or making sure the documentation is of quality. Out of a 1000 complaints a month, it averages 25 upheld as obvious mis-sales. However another 225 are paid out on due to missing or poor documentation that probably wouldnt have been had the documentation been present or better. The rest are rejected.

Advisers and firms only have themselves to blame as its those 225 odd in a thousand that encouraged the claims firms to get everyone to complain.