Endowment Misselling not attached to a mortgage

moneysaver

I agree with the OP, If she was told on taking out the policy that it would not reach the target amount of £30,000 would she have taken the policy out? I think not. So regardless of what the policy was to be used for she was misinformed/missold this policy. On the other hand if the salesperson was not on a high commission for this kind of policy would he have sold it in the first place.

I may be thick, but I can't see where the mis-sale occurs. You wanted a savings plan which is exactly what you got.

She was given a figure of £30,000 on maturity before she took out the policy this is why she took it out in the 1st place. She was not told at any time this figure would not be reached.


Moneysaver

mayb_2

I think we have to agree that you are not going to see this from my point of view dunstonh- and I don't blame you for that or take it personally. You raise more points about the process we have gone through and as you may imagine in two years we have covered all of these things and more.

We remain with the belief that the company involved has broken FSA rules and guidelines and are not being properly held to account for that - although they have had to address these issues. We are also sure that if the same set of circumstances had existed relating to our case and this was an endowment attached to a mortgage we would have had our case upheld. You are not minded to agree and that is your perogative. I wish you well and I am sure many people have benefited from your help.

I would still be interested to hear the views of anyone who feels they have not been treated fairly by the CIS or any other company, and has had a similar experience. Should these policies be treated in the same way as a missold endowment mortgage? Or is it just tough luck?

EdInvestor

Perhaps you could give more details of the basis of the misselling claim.

mayb_2

Hi EdInvestor

I will try to keep this simple but it is difficult

In 1994 we were visited in our home by 2 Agents of the CIS. I had let one Agent know that I wished to cancel a personal pension I had with them. They had not been invited and we had expressed no wish to purchase anything from them. They were not happy that I wanted to cancel my pension (I hadn't had it very long) and wanted me to take out this 15 year savings plan in its place, to give me a lump sum of 30,000 to purchase a pension or anything else I wanted.

This was discussed over a cup of tea and a biscuit and whilst I cooked the evening meal. We felt it was too expensive for us but on the promise of this large return (1994) we felt we should take up this policy. We were told that this was a savings plan with the added benefit of a life assurance. We were given no illustrations (the CIS does not dispute this) we were not told how the policy worked, other than we would be paid annual bonuses and once paid these could not be taken away and a large final bonus would be paid if we kept up the payments for the full 15 years. It was emphasised that it was very important that we did not cancel this policy.

This was a joint policy and we paid this one by Direct Debit (there was no alternative on this policy) although we paid all our other policies by cash or cheque to our Agent at the door and he signed a book as proof. We received no paper work other than a Life Assurance Policy with a 'with profits' sum payable on death or survival to the end of 15 years. We were told this was an added bonus to our plan.

We saw the Agent on a regular basis therefore, and often discussed this policy with him, we told him how please we were that we had this savings plan when there were so many problems out there with people's mortgages etc. We asked if we could add to it or take out another one we were so sure of it. We were told no to both of these requests but never told that actually you haven't a hope in hell of getting your money.

We received no illustrations or sales literature at the point of sale, we received no information about 'investments' and stock markets and risk to returns either then or later, we received no bonus certificates each year, (we had not been told to expect them so didn't ask for them), we received no information on the performance of our plan in 10 years. One bonus certificate was delivered by the Agent - he had found it when sorting through the papers of the last agent - this showed how much bonus we had earned in 1998 and on the back some healthy looking illustrations with a comment that if your policy was attached to a mortgage any shortfalls experience at this time would be made up by the final bonus payment and no action needed to be taken. No warning there then and we didn't have a mortgage anyway so took no notice of it.

So if we had been buying a mortgage endowment policy in this way I think all would accept that this had been missold. However, we had no proof of the amount we were promised and therefore had not got a case under the remit of the Ombudsman. The Ombudsman took the view that nobody did business in this way and we would not have bought anything without illustrations and literature etc. This despite the fact the company agreed that we had A) cancelled my pension at the same time we took out this policy been given no illustrations (the CIS did not dispute this C) the CIS had no copies of the paperwork we would have been given at the time (hadn't kept them too long ago) and never mind here is something similar we would have shown them D) had no written confirmation from the Agents involved (despite several requests) that they had followed all company proceedures at the point of sale and finally E) that our claims were supported by the information taken in a fact find made at the time.

We were told that we should have asked for information about our policy - we could have seen the companys PPFM on their website. This could not have been available before 2004 and we had no idea what a PPFM was or that the CIS had a website. However, we did visit it in 2004 and found that the funds, which we now knew our money was invested in, were no longer open for new business - in other words closed. Since we have made our complaints to the FSA this web page has been obliterated - this took the CIS some time to do and we watched the process with interest. We and others obviously, have copies of the original pages and the cached versions of these. It is still possible to find them if you know how to look. However, all reference to this has been removed and the FSA still lists this fund as open.

The Ombudsman has said we should complain to the FSA if we felt we had issues with the CIS but they would be unlikely to act on the evidence of one case. So if you have had a similar problem please complain to the FSA.

Our own family has four policies affected by this fund and failing to pay out in line with the promises made for them - one of them a frozen pension. No information was ever received for three of them which have finished now, and the other one, a 10 year life assurance which finishes early next year has had updates for the last two years. All in breach of FSA guidelines surely.

We cannot be the only people affected by the actions of the CIS in this way. We feel that the FOS and the Ombudsman should be acting to protect us as consumers - rather they are claiming to protect everyone because if they acted on these claims it would cause people to lose faith in the financial service industries. It looks to me as if they are more interested in protecting the industry than the consumer and will not act for one in detriment of the other. It was not possible to ignore shortfalls in mortgages as so many people could have lost their homes. With this sort of thing it is savings and pensions which are affected and we all know what is being allowed to happen to our pensions.

We want all such policies to be covered by the same rules as mortgage endowments and treated in the same way. Does anyone agree?

Well you did ask!

defender_of_the_weak

Couple of points

Surely the complaint encompasses the churn of the personal pension. What would be the position if the original policy had not been cancelled.

FOS do not uphold in favour of consumers. At adjudication level they find for consumers in 31% of cases and in Ombudsman rulings 33% (from memory) Hardly a consumer bias there.

We win 72% so how come the figure in favour of the public is so low? Answers on a postcard please.

mayb_2

Sorry got myself confused here. If you read my post yesterday you will know I have altered one part of it where I said we paid our policy by cash/cheque at the door. Actually this was the other way round we paid by Direct Debit and we couldn't pay the Agent by cash or cheque the way we did with our other policies.

mayb_2

The pension issue was an interesting one as the Ombudsman went to great lengths to dismiss any connection between my cancelling the pension and taking out this new business. We never claimed that the company had persuaded us to cancel the pension but the CIS admitted in writing to the Ombudsman that we had cancelled it on the same day and we also have a written acknowledgement of our cancellation supporting that, which we sent to the Ombudsman.

According to the Financial Advisor we consulted, the Agent had replaced my pension vehicle with another one which contained the same investment elements - so we gained nothing and lost the pension.

As both pensions and endowments appear to be invested in the same long term business fund of the CIS, the investment would have been affected by the same market forces and of course were declared as 'no longer open for new business' in that element of the now 'missing' PPFM. It would have been difficult, however, for the CIS to excuse not keeping us informed of the progress of a pension and its projected returns now wouldn't it?

However, I quote from the Ombudsman's decision paper

"Part of your complaint links and questions the suitablility to the sale of the above mentioned policy in terms of replacing Mrs ****** pension policy. From the evidence and information available to me these two transactions appear to be quite separate."

What can I say? We did complain about the Ombudsman's decision and ultimately about the Ombudsman - they investigate themselves so you can imagine the result. At the final complaint to an independent adjudicator for the service, we were told the adjudicator was not able to investigate the decision of the Ombudsman or how he had arrived at this - only whether the process itself had been carried out correctly. The Ombudsman told us he was "under no duty to investigate each and every issue that a complainant raises, nor am I obliged to answer all questions raised." also "An Ombudsman is entitled to place whatever weight he feels appropriate to any piece of information or evidence".

So the Ombudsman is pretty fireproof.

The FSA is not obliged to tell you what actions, if any, they have taken against a firm following a complaint and what the result is of any complaints you make to them.

Sorry, but where does the consumer come in all of this?

EdInvestor

My husband and I took out this plan to replace a pension for me, that didn't look very promising and which I couldn't really afford.

Do I understand you to say that this was a with-profits pension? And that the endowment that replaced it was also invested in the With profits fund?

Did you know at any point with either of these products that your money was invested in the stockmarket?If not, and you had been told this, would you have invested in either of the plans?

dunstonh

Whilst not convinced the FOS reason is actually a fair one, i wonder if the fact that you had chosen already to cancel the pension could be swaying their decision. The adviser didnt tell you to do it, you had already decided.

Also, you werent sold a mortgage endowment and it never had a target of 30k. You have a savings endowment. If you had been sold a mortgage endowment, then you would have grounds for the policy to have been voided as that wouldnt have been suitable for your needs. You need to let go of that part of it as its a non-issue. You had a savings need and you were sold a 15 year savings plan.

We win 72% so how come the figure in favour of the public is so low? Answers on a postcard please.

Easy answer. You dont submit complaints that you know are not going to win. There is no point you do so and it would be of no benefit to you or your client.

EdInvestor

In what way was the pension "not very promising", whereas the endowment did have promise, given that they appear to have been both using the same investment fund?

Given that the pension attracted tax relief and the endowment didn't, one would have thought that, pound for pound invested, the opposite would have been the case. :huh:

In what way was the endowment seen to be more affordable than the pension?