Report Endowment Misselling Compensation SUCCESSES

kd811

I sent my complaint off to Axa just over 2 months ago using the advice on this site and have received a letter today offering me compensation as i was misold an endowment mortgage when i should have been advised to take repayment.

the mortgage was originally for £23750 in 1997 which i changed to £20k IO in 2004 when i moved home- they've offered me £1546. They have also provided me with a surrender value which is roughly what i've paid in maybe a little more of £5500...I'm thinking about surrendering the policy and changing what's left of my mortgage on IO over to REP & paying the lump sum off our debt which will then allow us to make at least £100 Overpayments onto our mortgage each month...Axa will also pay the £50 fee to change over to REP....i'm just unsure as all i've ever been advised is never to surrender the policy...any advice out there please?

bluffer

After finally getting off my behind I finally sent in a complaint to HBOS about a policy they sold me and the good news is that they have offered to refund me just over 7k as the policy was totally unsuitable for my needs at the time.

I received the letter about 6 weeks ago but still havent received the cheque. I know they have received my acceptance, as I called them 3 weeks ago to check. How long do they take to get the money out of their doors?

turbobob

Crazy_Saver wrote: »

Can someone answer a quick question for me please...............

In the case of churning, is the redress worked out on the churned policy or the new one?

Thank you;)

How I used to deal with them (from memory, I haven't dealt with these in quite a while) it depends on if its a "churn only" uphold or if the decision is that the replacement policy is unsuitable as well - e.g. if it does not match your attitude to risk.

If its a churn only:

A Refund of premiums from the original policy/s + interest
B Less the SV received
Plus Interest to the settlement date on A-B
Plus Compensation for any additional costs caused by the churn for a policy of the equivalent sum assured as the original*

* = this last bit I can't quite remember. If you've surrendered the replacement now, it would be different to if it was still running.

If its a churn and the replacement is deemed unsuitable then see http://www.financial-ombudsman.org.uk/publications/guidance/mtge_endowment_redress_cs.htm#10

That is a combination redress method - note this "To compensate the consumer for the unsuitable advice to take out the second policy, we would usually tell the firm to pay compensation calculated in accordance with the FSA’s guidance, Handling Mortgage Endowment Complaints."

mayb_2

HI Crazy Saver. While I am relieved to hear that there is some movement in the right direction for you, I am struck by the fact that you (and others) have had to fight so hard to prove you were missold a policy as you didn't understand what you had purchased. It would appear that the resolution is almost impossible to understand as well. How we are supposed to understand these things without taking at least a degree in alchemy I do not know!!

Crazy_Saver

mayb wrote: »

HI Crazy Saver. While I am relieved to hear that there is some movement in the right direction for you, I am struck by the fact that you (and others) have had to fight so hard to prove you were missold a policy as you didn't understand what you had purchased. It would appear that the resolution is almost impossible to understand as well. How we are supposed to understand these things without taking at least a degree in alchemy I do not know!!

Hi mayb!

The FOS still won't uphold my complaint regarding miss-sold but they have agreed that we have a case on the churning!

Once I have concrete info I will post the final outcome.;)

mayb_2

Maybe I am being simplistic but surely churning has to be a missold policy - if you were sold a policy, which was simply sold to you because it benefited the person who sold it to you,(commissions) then how can it be assumed he/she explained its risk to you? If he/she had done that he/she would not have made a sale and so not churned your policy. If you had understood the first policy, amongst other things you would have understood that you did not need to replace it with the second one. Why does the obvious carry no weight with these people? Simple, there are none so blind as those who will not see!!

We had a similar problem with an ombudsman who chose not to see the obvious. Let one pass the post and a whole lot of others hang on to their coat tails - so very dangerous for the finance industry. I cannot see, following the most recent results of wrongdoing and deliberate blindness of the financial institutions, that their word is better than ours when we say we didn't realise what we were purchasing. Hmmm, isn't that what they said about toxic debt??? We know exactly how much money we have lost - whereas they don't have a clue how expensive their toxic debts have been to them. Or should I say to us, as we appear to own them now as tax payers.

dunstonh

Maybe I am being simplistic but surely churning has to be a missold policy

Churning when justified is fine. I have "churned" hundreds of plans in the last few years. You dont leave someone in an old obsolete plan when you can put them in something cheaper and better. However, churning without justification is bad.

IFAs are encouraged to switch/transfer and can be held culpable if they dont just as much if they do. Tied agents technically are not allowed to discuss or review the products of other providers. In my opinion, that ought to mean they shouldnt be allowed to do any switches. How can they justify a switch/transfer if the product they are telling you to come out of is not allowed to be reviewed within their remit?

mayb_2

Good question dunstonh - I am afraid that a lamentable lack of accountability and ethical standards at the top and a culture of bonus and commission payments to sales staff lower down the scale could be the answer to that one, as it is unchanged even now. Present company excepted of course. What gets my blood boiling is the stance, or lack of it, of the FSA and the fact that it is assumed on many levels that it is the consumer who is lacking in integrity if there is a question over what actually happened at point of sale. If there is a lack of evidence it should be assumed that the information was not passed over to the consumer in such a way that no doubt could have been in that person's mind about what they were purchasing and the possible consequences of a failure of their fund. Anything less than proof of that should be a missale whether it is a mortgage, pension or savings fund.

Although it is possible to say what the potential return was likely to be in the prevailing climate of the time these were sold, it is taken as read that no sums were discussed unless this is in writing somewhere as an absolute figure. Many people will confirm that they were quoted figures and told to expect more than the conservative estimates they were being given. Therefore, it is possible for the ombudsman to make assumptions of how much these sums were likely to have been. In the case of an upheld missale then redress should take account of those sums too. Then of course we saw the introduction of the three year rule to prevent more people from claiming their lost mortgages.

We have been led to believe that the payment of such sums would have led to a collapse of the finance industry and would not benefit anyone. (Hence the establishment of the redress system) Hmm - well we have just seen one of those collapses and it would appear that some people left with some enormous golden handshakes and others have received our money to enable them to continue to earn their great incomes. The finance industry is still there but many have lost their homes, their jobs and their pensions and their savings are worth diddly squat.

tiernsee

We were sold our endowment back in 1989, young and stupid and it was sold as a savings plan! Obviously we then got letters telling us that the endowment would pay back nothing like we'd been told (should have been £65k, predictions £38k - Royal Sun Alliance). Bolstered by the fact that my boss (who admits he kenew endowments were a risk) got a payout we complained we were missold - at the time felt quite confident as we really didn't understand the risks or that there was even a chance it wouldn't pay out. Royal Sun Alliance had since then been passed onto Phoenix and they were less than helpful. However, I persevered and eventually they wrote to me telling me they wouldn't communicate with me anymore! Went to the financial ombudsman and first time round they couldn't help but again persevered and eventually they found in our favour and we were awarded just over £10k in compensation! After this sold the endowment policy and have offset mortgage, it is really good to seeing it going down each month!

My advice is to persevere, don't take the first "no" as the final answer.

Good luck to everyone claiming and don't miss the time deadlines.

treliac

Crazy_Saver wrote: »

Hi mayb!

The FOS still won't uphold my complaint regarding miss-sold but they have agreed that we have a case on the churning!

Once I have concrete info I will post the final outcome.;)

Congratulations Crazy Saver ... look forward to hearing the final outcome. At least it will be settled and you can stop fighting and regain the amount of time and emotional energy that is expended in keeping up with it all. Hope they will award you something for distress and inconvenience too.

Re. churning - we didn't get that part of our complaint upheld, as such, because the Pru had already agreed to pay back the extra costs that churning had caused us. Though we had to take their word for it as we didn't know how to work it out!