Abbey admits mis-selling mortgage but offers no compensation

Simak

I have been in correspondence with Abbey for many years now about my endowment mortgage and they have finally admitted to mis-selling me the mortgage endowment back in 1986. However, they will not pay me any compensation as they say I have not lost out financially. This is despite the fact that a letter from Norwich Union in November 2006 said there is a high risk of shortfall on the policy and it is unlikely to reach the target amount.

The Ombudsman is unable to help as I was sold the policy before April 29th 1988. As a direct result of taking out the orginal policy, I had to take out a new policy each time I moved house in 1990 and 1994 due to the increase in the mortagage. I eventually changed to a repayment mortagage in 2000 and now have 3 separate endowment policies.

If Abbey are saying I have not been finacially disadvantaged by their decision, can I still claim some sort of compensation for them admitting they mis-sold it to me in the first place?

Any advice or help would be gratefully received.

Simon

dunstonh

If Abbey are saying I have not been finacially disadvantaged by their decision, can I still claim some sort of compensation for them admitting they mis-sold it to me in the first place?

No. You cannot claim anything because at this moment you are better off. Think about it in court "m'lud I wish to receive compensation because Abbey's advice has made me financially better off".

This is despite the fact that a letter from Norwich Union in November 2006 said there is a high risk of shortfall on the policy and it is unlikely to reach the target amount.

Doesnt mean there will be a shortfall though. NU projections do not include terminal bonus accrued to date or endowment promise. However, the surrender value does include terminal bonus (although not endowment promise) and the surrender value is used in the calculation to see if you are worse off.

The other issue is that over the majority of the mortgage term you are probably around £10-£20pm better off with an endowment mortgage. So, if you assume £15pm over 25 years, that equates to £4500 better off over the term. So, if your shortfall is less than £4500 (in this example) then you are still better off despite having a shortfall.

defender_of_the_weak

You can take the matter to FOS as Abbey have voluntarily agreed to be covered by them for sales before 1988. That said,they do not usually make an error in calculation or load the figures against you as some companies do. Given the age of the plan and the fact it is with NU it is highly likely the figures are correct. As dunston points out, a projection is simply that it does not mean it will come to be the reality and the plan may yet hit target.