Report Endowment Misselling Compensation SUCCESSES

dunstonh

Yesterday I was contacted by a company (EMC from Ipswich) offering to try to claim compensation for missold endowments. They are offering a No-Win No-Fee but take 35% + VAT of any compensation won.

Thats a massive amount of money they are taking. 42% overall. However, given how few endomwent complaints succeed nowadays, I guess they need to make their money somewhere.

They may have known that I had endowments as I looked into selling them in 2003 because of the projected short fall.

They wouldnt have known as that information isnt in the public domain.

I told him that I had encashed them in 2004.

So you are timebarred then.

I had already tried to claim back from C&G who sold me the Royal endowment but it was rejected on the grounds that I was not any worse off than if I'd had a repayment mortgage.

and you had already complained so you cant have a second bite of the cherry.

Is there anything I can do?

You cant complain about it a second time. So, that one is dead. Plus you have a 6 year time bar so unless you cashed them in late in the year, you are probably too late on the other.

denisiw

dunstonh wrote: »

You cant complain about it a second time. So, that one is dead. Plus you have a 6 year time bar so unless you cashed them in late in the year, you are probably too late on the other.

Thanks for the reply.

It wasn't the Royal one that I was asking about, I know you can't complain twice; it was the Pru one I was querying.

I'm not too bothered about it as I was able to pay off the majority of my mortgage with the lump sums I got from the endowments, and redundancy money received around the same time.

I was able to pay it off completely in 2007.

Denis

PS I going to have a go at reclaiming the repayment admin fees from The Woolwich and Halifax though!

denisiw

denisiw wrote: »

PS I going to have a go at reclaiming the repayment admin fees from The Woolwich and Halifax though!

Success, up to a point:

The Woolwich charged me £195 Redemption Fee in 2004, they are refunding me £100 + interest of £29.71 = £129.71. No quibbling.

Halifax charged me £175 Repayment Admin Fee in 2007 when I redeemed my mortgage. No luck with them, they said the amount was as per the original agreement. I can write to Head Office if I wish.

Not a bad outcome for 30 minutes on the phone. Thanks MSE.

Denis

denisedawn

In june of 1994 my father took out a endowment assurance for my daughter,she was 8 months old at the time. Now my daughter has just turned seventeen we found the policy out ,we have always believed she would be paid when she turned 16years. My father has always paid on a monthly bases. My father has just told my daughter that he has been intouch with pearl and she will not be paid until shes 21 yrs,thats twenty years of paying into the policy,im confused, can anyone help please

dunstonh

denisedawn wrote: »

In june of 1994 my father took out a endowment assurance for my daughter,she was 8 months old at the time. Now my daughter has just turned seventeen we found the policy out ,we have always believed she would be paid when she turned 16years. My father has always paid on a monthly bases. My father has just told my daughter that he has been intouch with pearl and she will not be paid until shes 21 yrs,thats twenty years of paying into the policy,im confused, can anyone help please

This isnt the right thread for your subject but i will answer anyway.

Endowments are a fixed term product. That term is set at the outset and is shown on the product particulars (illustration and policy document). It is not uncommon for people to pick the age they want it to pay out to be between 18 and 24.

So, unless there is any evidence to support the choice of 16 years rather than 21 years, I cant see any wrong doing. What does the policy document say?

MattyA

MattyA wrote: »

Thanks for your comments - but am I missing something here?
It seems win win for the insurers and lenders - the only reason I am on track to pay off my mortgage is because I took action (at my cost) to ensure this happened by switching to a repayment mortgage once it became apparant that the endowment was not going to do its job.
I even kept them for a couple of years to see if they would make some kind of investment for the future - but their preformance was quite frankly dire.

Quote:
c) My converting from endowment to repayment mortgage and the associated costs and increased mortgage payments.
it would do. The lower monthly cost of an endowment mortgage was one of the most common reasons for people doing the endowment mortgage. Switching to repayment basis will cost more. You cant have it both ways.

Your comment re cant have it both ways I dont understand - I choose the endowment mortgage,yes because it was the cheapest option , but also because I was advised that it would do its job & based on information at that time would likely leave me with a surplus.
The surplus was never counted on but paying my mortgage off most certainly was.
Why else would you anyone take one out?

Therefore if I had to change to revert to my original target of paying off my mortgage,surely there should be redress for the associated additional costs.

Quote:
d) The surrender value of the endowments being less than their value / what I had paid into them.
irrelevant as the redress calculation uses the surrender value and not the current value.

Why is thius irrelevant when it cost me money to get back on track & yet the insurers made money out of me when I purchased the endowment,month on month in fees whislt I paid for something which was not fit for purpose & then again when I eventually sold it back to them at a loss when it beacame more than apparant that it was not going to acheive its goal.

Quote:
I dont know whether to go straight to the FOS or tackle the actual lender (Halifax & Northern rock)who sold me the endowments with their mortgage first.
The insurers have the liability here. Not the lender. The lender will refer you to the insurer. It doesnt matter anyway as you won your complaint. So, even if they did look at it as well (which they wont as they have no liability) and upheld it, they use the same calculation method.

As you describe it, the complaint has been upheld but the redress calculation (which is defined by the FSA and the same once the FOS tells the companies to use) shows you have no financial loss. So, unless you feel the figures input are wrong then there is no point going to the FOS.

Again why,I was sold the policies by the lender alongside & to pay off the mortgage that I was taking out with the?
Just wondered as it seems not to have been thje case for MacBeth.

Not having a pop at you by the way ,just more than a little frustrated that it has cost me more money than it should have done.

Hi dunstonh,

I wrote back to the endowment provider, with further information relating to my mortgage and also pointed out that I had been charged for interest that I didnt need.

They have responded with an offer of compensatiion(£250) inc interest at 1% over base since oct 2000.
They have also strongly recommended that I seek advice from an independant financial advisor and that they they will pay my reasonable costs of upto £350 for this??
I find this a very strange comment - Is this normal / worthwhile?

I also wonder:
1: Should the interest not be calculated at the statotury rate of 8%
2: Would it be worth me asking that they recalculate the figures using the 8% rate and to conclude the matter throw in the £350 they are offering to pay of IFA - as we both know that the figures could go up OR down.

Your thoughts on the matter would be appreciated.

(Are there IFA's who specialise in these kind of issues / calculations?)

Regards,

Matty

magpiecottage

MattyA wrote: »

1: Should the interest not be calculated at the statotury rate of 8%

You could ask for 8% simple interest (i.e. just on the £250, not interest on interest).

However, 1% over base rate is intended to reflect what it is really worth to you - a rule of thumb figure is that mortgages are charged at around 1% over Base Rate and savings at about 1% under although the current economic climate has sent that out of the window for the time being.

MattyA wrote: »

2: Would it be worth me asking that they recalculate the figures using the 8% rate

You could but I doubt they would

MattyA wrote: »

to conclude the matter throw in the £350 they are offering to pay of IFA - as we both know that the figures could go up OR down.

They will not pay it to you. From what you say, I presume you switched to repayment some years ago. Since the payment is simply to meet additional costs of getting advice on whether to switch now, it is unlikely you will get it if you do.

MattyA wrote: »

(Are there IFA's who specialise in these kind of issues / calculations?)

No - this is really claims management work (though most claims management companies do not know either).

One of my clients IS an IFA that is also authorised with by the Ministry of Justice and could arrange a calculation but such firms are few and far between.

dunstonh

One of my clients IS an IFA that is also authorised with by the Ministry of Justice and could arrange a calculation but such firms are few and far between.

That must be a bit awkward. Also, does an IFA really need to be authorised by the MoJ? An IFA can put in complaints on behalf of an individual without MoJ authorisation.

magpiecottage

dunstonh wrote: »

An IFA can put in complaints on behalf of an individual without MoJ authorisation.

That depends. To quote the MOJ Guidance note:

"Do FSA authorised firms or individuals need to be authorised?
If an FSA authorised firm or one of its appointed representatives, in the course of carrying on a regulated activity (e.g. advising on investments) does no more than notify a client of the possibility of bringing a claim against say a previous adviser or entity, the authorised firm and the relevant appointed representative would not need to be authorised under the Compensation Act. The authorised firm is likely though to be carrying on an "ancillary activity" for the purposes of the FSA Handbook and subject to the relevant regulatory requirements.
However, where an FSA authorised firm (or appointed representative) provides a claims management service for which they receive remuneration, then the FSA authorised firm (or appointed representative) will need to be authorised under the Compensation Act.

For the avoidance of doubt, the following services are claims management services –

• advertising for, or otherwise seeking out (for example, by canvassing or directmarketing), persons who may have a cause of action;

• advising a claimant or potential claimant in relation to his claim or cause of action;

• referring details of a claim or claimant, or a cause of action or potential claimant, to another person, including a person having the right to conduct litigation (but not if it is not undertaken for or in expectation of a fee, gain or reward);

• investigating, or commissioning the investigation of, the circumstances, merits or foundation of a claim, with a view to the use of the results in pursuing the claim;

• representation of a claimant (whether in writing or orally, and regardless of the tribunal, body or person to or before which or whom the representation is made).

That makes it quite difficult.

Some IFAs also run separate claims management businesses as different limited companies.

belaynvnas

You cant complain about it a second time.
Your thoughts on the matter would be appreciated.