Report Endowment Misselling Compensation SUCCESSES

mayb_2

It is a good thing to have a plan and to receive redress but not such a good thing that the plans we already had were turned into such a nightmare. The situation, however handled now, should never have happened and unfortunately none of us are likely to fully recover our finances from such blows as these.

Ex-Spendaholic

Hi

I would really welcome some advice please.

We took out a mortgage and an endowment policy in 1993. We were both 21 years old so green and naive to say the least. The mortgage was for £33,000. The mortgage was and still is with Halifax. The endowment was with Legal and General. At the time we were told there were 2 ways we could get a mortgage. The adviser explained repayment and interest only mortgages. She told us the repayments on both and when you included the endowment payment we ended up with 2 virtually identical figures. Her spin was that we could pay x number of pounds per month for a repayment mortgage and the mortgage would be cleared in 25 years or alternatively we could pay x number of pounds per month on an interest only mortgage and have a great big lump sum at the end. Both figures were almost identical when you added together the interest only mortgage payment and the endowment policy payment and compared it with the repayment mortgage payment. She told us that with the interest only mortgage we would have enough on maturity to pay off the mortgage and around a £70K surplus to do what we wanted with. She then went on to talk about us being able to buy holiday homes etc.

We were so delighted at the thought of coming into all that money when we were 46 so we took the interest only with endowment policy and told all our friends how great it all was. :mad:

Then in 2001 out of the blue a letter arrives from Legal and General to say that the policy wasn't performing as expected and predicting an £11K shortfall. :eek: As we were expecting a £70K surplus this was a serious shock. Without further ado we paniced and switched to a repayment mortgage that very day. We also sold the endowment through some company and got £3500 for it. On hindsight this was maybe not the best way forward but we were panicing and irrational and believing we would come to the end of the 25 years and be evicted due to not having enough money. :rotfl:

Is it worth me putting in a claim? I do have documentation somewhere from when we were sold the mortgage and endowment policy. I am pretty sure there are illustrations on there showing the payment for repayment, the payment for interest only and the payment for the endowment. However for some reason there is no L&G reference number on any of it. I had a brief look at this last year but for some reason didn't proceed.

Do I complain directly to L&G?

Any advice would be greatly appreciated.

dunstonh

Is it worth me putting in a claim?

You have three years from being notified of a high risk of a shortfall to make a complaint.

I am pretty sure there are illustrations on there showing the payment for repayment, the payment for interest only and the payment for the endowment. However for some reason there is no L&G reference number on any of it.

This means the sale of the endowment did comply with the correct expectations that you were presented with the costs of both options. There would be no reference number as its pre-sale and the policy wouldnt have been allocated yet.

Do I complain directly to L&G?

Did an L&G rep sell it to you or did you get it from an independent?

It is quite probable that any complaint would be rejected now as you have left it too long. You should have complained in 2001.

Ex-Spendaholic

Thanks for your reply.

We had used a place called The Mortgage Advice Shop. We went there as they promised to get us the best deal possible. There were only a couple of its type back then whereas there are hundreds nowadays.

It wouldn't have occurred to me to complain back then.

Thanks for the advice, it will save me wasting my time. :-D

mayb_2

Expendaholic I am sorry to hear what happened to you over your endowment. I have many times heard the argument of all the wonderful savings on our payments those of us with endowments had benefited from and like you could not say this was the case at all.

personally, I think you actually did the right thing back then and saved yourself a much larger shortfall later on - but that is just my opinion I have no idea how your policy would be performing now. My mortgage was predicted to shortfall by over £25000 and counting when we claimed. You may not have got much more than you did by selling it and the promises of loads of money to spend at the end of the mortgage, would not have been counted because not in writing. So all in all you are probably in a better place and have saved yourself years of wrangling and waiting around for the Ombudsman to reply to your claim.

So sit back knowing you took the right decision and pat yourself on the back - its the only way to go at this stage. :T Of course if you are not happy with that there is absolutely nothing stopping you from writing to the company concerned using one of the template letters on the Which site. Nothing ventured nothing gained as they say. They will soon send you away with a flea in your ear, if they think that they don't owe you anything and then it is up to you what you do.

thomasz

I am very happy to have a opportunity cooperate with your company.

dreamylittledream

dunstonh wrote: »

You have three years from being notified of a high risk of a shortfall to make a complaint.



This means the sale of the endowment did comply with the correct expectations that you were presented with the costs of both options. There would be no reference number as its pre-sale and the policy wouldnt have been allocated yet.


Did an L&G rep sell it to you or did you get it from an independent?

It is quite probable that any complaint would be rejected now as you have left it too long. You should have complained in 2001.

Hmmmm yes in parts

But the OP the policy would not have been timebarred before the 2004 rule change and so would have had have recieved a letter giving them a complain by date to be timebarred.

Now as the policy was sold/surrendered in 2001 its seems fairly likely they did not recieve such a letter with said date.

As such whilst the claim is technically timebarred, unless a letter with the complain by date was issued it would still (probably) fall under FOS jurisdiction. This is the sort of case that ends up at Ombudsman level for a jurisidction decision - but on the actual facts of the case, the OP would not be timebarred.

You'll have to argue this one but its worth putting in a complaint in these circumstances.

I think Mortgage Advice Shop were tied up with L&G, which means L&G were responsible for the advice - but L&G would be able to confirm this for you. If so you need to complaint to L&G.

If they were independant, then prepare for a very long fight...

JPR5

I started this claim 3 years ago, the company in question went into liquidation, it has gone to the high court and been awarded in my favour and the directors of the company involved have now been given right to appeal. 15 people in the Ombudsman service have been involved to date. Any help would be useful as it is effecting my health!

dunstonh

JPR5 wrote: »

I started this claim 3 years ago, the company in question went into liquidation, it has gone to the high court and been awarded in my favour and the directors of the company involved have now been given right to appeal. 15 people in the Ombudsman service have been involved to date. Any help would be useful as it is effecting my health!

Thats a lot of effort and time when the typical payout on upheld complaints is just not much greater than a couple of thousand pounds.

A question. If the company went into liquidation, does it really matter what the court says as the directors have no personal liability and if there is no money in the company to pay the redress payment then you are not going to get any money.

mayb_2

When a company is liquidated when there are people who are owed money then they do get a divided amount of the money realised on the assets of that company. One assumes the Directors would not be putting in a appeal if what you have just stated is true dunstonh and their personal liability depends on what type of company, the finance they used to start the company and how far they are personally committed. A couple of thousand pounds may not sound much if that is money you have but it becomes a lot more if that is money that you owe and are paying interest on.

I cannot help you with this JPR5 but hopefully there will be someone on here who can give you the advice you need. It may be worth having a chat with the FSA who regulate such companies. They may be able to tell you what the situation is in relation to a regulated finance company. Or take courage in both hands and ask the Ombudsman again. Your only other option is to walk away and only you know what is best for your health. It may be time to look at your current situation as if the money wasn't going to come in and ensure you have some idea of how you are going to pay the mortgage regardless of the outcome.

For instance you could just pay the interest on your current mortgage with the plan of downsizing and paying it back at the end of term if that is a viable option and you cannot afford to make higher repayments at the current time. You may consider changing to a repayment option and extending the term. It very much depends on how big the shortfall is and how long you have to pay if off but If you have a fall back plan then hopefully you can be easier in your mind and your health will not be so affected by the stress of this situation.