Is it too late to Claim Mis Sold Endowment?

rockinter

Been going through some of my mum's finance's and she has a Mortgage Endowment with Sun Life Financial of Canada which she took out in 1990, and she was told that it would pay off the mortgage. So she only took about a Interest only mortgage. However it will not pay the mortgage off.

It is set to mature this year but she has not paid any money into it since 2004 can she file a mis-sold endowment claim or is it too late?

luckyfool

She only has a certain amount of time from when first notified that it is not on track to hit the target (a warning letter). I would imagine she will be time barred.

What has she been doing since 2004 to address repaying the interest only mortgage when she stopped paying into the endowment? Did she switch the loan to repayment or start making overpayments? It certainly does seem very likely that it will not be enough to repay the mortgage given that she has not been paying into it for 6 years!!!

rockinter

She changed the mortgage to a repayment mortgage in 2004.

luckyfool

That's something at least. One of the other regular posters who have experience of endowments/investments will be able to clarify the exact time barring rules applicable here, but I'm not optimistic. Do you know when she would have received her first Red warning letter?

rockinter

I have been trying to find any red letters and I have been unable to find any red letters in her folder for this Sun Life Financial of Canada, does it mean she did not receive one? or when I complain can I say that she did not receive one?

and she can not remember receiving one either.

luckyfool

I would assume Sun Life will have a record of when these letters were sent out .... and the fact that she stopped paying into the endowment 6 yrs ago and switched to repayment would strongly suggest she was aware there was an issue and taking steps to address it. I don't think it would be credible to argue that she did not realise there was a problem with the endowment until now. You can try but I I'm sceptical of your chances. As I've never sold endowments/investments at all I'm not 100% clear on the exact process in terms of the misselling claims process but one of the IFA's who post regularly will probably be able to make more precise comment on the situation.

dunstonh

Most endowments became time barred between 2006 and 2008.

I have been trying to find any red letters and I have been unable to find any red letters in her folder for this Sun Life Financial of Canada

They dont have to be red. They have to state that there is a high risk of a shortfall. Typically, its on the statements with the projections.

when I complain can I say that she did not receive one?

If you complain and say that they are unlikely to believe you. There is not just one letter. Its over 3 years with each statement with one stating the final complaint date.

You can ask them if its timebarred. That is probably the easiest way. However, what would be your reasons for mis-sale? Or would you just be trying it on? Even if you could complaint and then the complaint was upheld, any redress would be based on 2004 values. Not current. So, the effects of the global recession would not be taken into account. Switching from endowment to repayment also looks suspiciously like being aware of a potential shortfall 6 years ago.

rockinter

Just checked she got a letter saying that there will be a shortfall around 2003-2004 and that she should change onto a repayment mortgage.

So does that mean it would be timebarred.
The complaint was going to be that the advisor said that it was guaranteed to pay the mortgage off to achieve £40k but it would not.

My mum had a family crisis at the time so did not really sit down and read the letters properly.

Annisele

What exactly did the 2003/2004 letter say? I doubt that it said that there will be a shortfall - as it's unlikely that Sun Life knew that at the time. It's also unlikely that Sun Life said that she should change to repayment (as that would be advice); it seems more likely that they would have said that that was an option open to her.

If the letter said there was a "high risk of shortfall", then the complaint would be timebarred (unless there are any very unusual circumstances). If it said something different, then it depends.

rockinter

Hi just read the letter and it says " high risk that plan won't pay out enough to over the target of £40,000.."
And then it had another letter " what I should do now?"
-Change your mortgage loan e.g. change to repayment mortgage
- Start additional savings plan
- varying your endowment policy - extending the term or topping it up.

dunstonh

That seems to cover the requirement to notify of a high risk that there will be a shortfall. Has it been three years since that notification?