An IFA conned me.....

Dogloverx6

I was advised as a cautious investor to re-mortgage my home and invest in a 'sure thing'. It was what I now know to be high risk. I had my complaint upheld by the FSO against the other company and was ordered to be put back to my former position. The company went bust. The IFA has walked away scot free. BOS are taking me to court to have my home re-possessed. ANY help would be appreciated.

Annisele

How much money did you lose? (More or less than £50k?)

Have you approached the Financial Services Compensation Scheme?

dunstonh

Clearly the transaction was wrong for an inexperienced and low knowledge consumer. Gearing is only suitable for higher risk sophisticated investors and a very rare thing for anyone to do. So, getting an uphold decision was an easy one.

If the adviser was a limited company then that ends the formal complaints process via the FOS. If the adviser was a sole trader or partnership then their personal assets can be used to pay redress. If they were a limited company or there is no personal assets then you can take your complaint to the FSCS.

The IFA has walked away scot free.

Not quite. Not much comfort for you but it will effectively end their career in financial services (good thing too given the transaction)

GMS

It is obvious the transaction was wrong as dunston says but how can your home being repossessed be atributed to the IFA?

If you have not kept up the mortgage then how is this the fault of the IFA? You took the mortgage knowing the payments I assume.

How did you expect the mortgage payments to be met?

GMS

opinions4u wrote: »

Income from investments?

'Value of investments can go down as well as up' etc.

Foolish to rely on this to pay for a home.

Thrugelmir

GMS wrote: »

'Value of investments can go down as well as up' etc.

Foolish to rely on this to pay for a home.

Remortgaging to invest elsewhere for a speculative return is hardly "cautious".

So whatever the failings in the type of investment that was invested in. I would say that the OP was aware of the risk in remortgaging. The two issues although connected are unrelated.

silvercar

Thrugelmir wrote: »

Remortgaging to invest elsewhere for a speculative return is hardly "cautious".

So whatever the failings in the type of investment that was invested in. I would say that the OP was aware of the risk in remortgaging. The two issues although connected are unrelated.

Not if they believed the professional information given, that the investment was a "sure thing".

If the FOS has ordered that they be put back in the same position, then that would mean the investments sold, the money made up to the original amount and the mortgage cleared. So OP would be left with no mortgage to pay and no danger of the mortgage lender taking action.

Annisele

silvercar wrote: »

If the FOS has ordered that they be put back in the same position, then that would mean the investments sold, the money made up to the original amount and the mortgage cleared. So OP would be left with no mortgage to pay and no danger of the mortgage lender taking action.

Unfortunately not in this case - the IFA has gone under. FOS doesn't have any money of its own to compensate consumers with, so unless the IFA has assets the OP can't recover from the IFA. They might be able to recover something from the FSCS, but FSCS's compensation limits are relatively small.

Dogloverx6

Older people like myself, mortgage free were targeted. The money raised from the mortgage was matched by a loan from BOS which was used to buy TEP's. The plan was geared to repay the interest only mortgage and return a small income. I doubt anyone would have placed their home at risk if everything had been explained. I was told this was risk free. As I said I won my complaint. The whole thing was a con. IFA's had a very generous carrot dangled. Money box on BBC radio 4 interviewed the director. His company was censured by the FSA. No fine. Mr X and his wife have since started yet another. The ombudsman says the products are unregulated so anyone can get out there and con the public. I might sound like someone who knows about investing. I don't but I've researched and learned a lot. Meanwhile the IFA from a separate company, someone I trusted, enjoys the luxuries from his massive commissions and continues to win peoples' trust. He 'fiddled' documents and even witnessed forged signatures. But I will continue to fight another claim against him. The FSCS can pay £50000 if a claim is successful. This amount won't clear either debt

SouthCoast

What is a TEP?

Annisele

TEP = traded endowment policy.

Some people buy with-profits endowment policies part way through the term as investments - the buyer is responsible for premiums going forwards, and receives the surrender value at the end.

The problem is sometimes that the TEPs are overvalued. Using (unrealistic) round figures you might have a policy with a current surrender value of £10k, premiums to maturity of £3k, and an estimated maturity value of £16k. The buyer might pay £12k to the broker, the broker creams off £1k in commission, and the seller receives £11k (which is still £1k more than they'd have got from the insurance company). However the buyer now has a TEP they've paid £12k for which is only 'worth' £10k (in that on surrender they'd only get £10k). Over the remainder of the term, the buyer pays the £3k premiums left - but they might find that the maturity value of the policy is only £13k, so they've lost £2k.

Add gearing into that mix and things can go very badly wrong very quickly.