Miss Sold Endowment (revisited)

caw1965

I have been reading through the Endowment success story posts today and decided to look at my old policy.

I bought a half share in a house in 1988 and got a Endowment Mortgage policy with Royal Sun Alliance (Life Assured policy dates Jan 29 1988) Basic sum £9,900 with maturity payment of £20,100 to make up the sum of £30,000 (my half !! a lot in 1988 )

I have moved house and re-jigged my mortgage since then but I still have this endowment policy tied into part of my total repayment plan.

I had no warnings regarding shortfalls until Nov 2000 ( 1999 statement was all still thumbs up !!)

In 2003 I formally complained about miss selling as by this time they were estimating a 8-10K short fall.

Sun Alliances' immediate response was to slopey shouldered the case onto Hambro's Countrywide Assured Financial Services who had apparently acted as independent brokers. (something to do with Mann and Co if I remember )

Hambro then wriggled out of responsiblity by saying that at the time I took out the policy the financial services industry was not subject to the Financial Services Act of 1986 ( apparently only effective after 29th April 1988 !!!!) I must have missed the point that an 1986 Act took 2 years to become actual law so I just cursed my bad luck and forgot about it.

Re reading my paperwork tonight I cant believe I missed this!!Can anybody confirm this was the case ?

Sun Alliance became Resolution in 2004 and then Phoenix in 2005 so I'm pretty much resigned to them being as slippery as possible but does anyone know anything about Hambro Countrywides current policy mis selling claims pre 1988 now ?? I know other companies have been forced to re-consider older claims so I am thinking of gearing up for another go.

Any thoughts much appreciated
chris

dunstonh

I have been reading through the Endowment success story posts today and decided to look at my old policy.

That thread doesnt get much action now that the endowment issue is largely over.

I had no warnings regarding shortfalls until Nov 2000 ( 1999 statement was all still thumbs up !!)

That is normal. The dot.com crash hit shortly after that (along with a number of other events one after the other).

In 2003 I formally complained about miss selling as by this time they were estimating a 8-10K short fall.

Right. So you had your one bit of the cherry in 2003.

Sun Alliances' immediate response was to slopey shouldered the case onto Hambro's Countrywide Assured Financial Services who had apparently acted as independent brokers. (something to do with Mann and Co if I remember )

Sounds right so far. The liability is with the advising firm. Not the insurer.

Hambro then wriggled out of responsiblity by saying that at the time I took out the policy the financial services industry was not subject to the Financial Services Act of 1986 ( apparently only effective after 29th April 1988 !!!!) I must have missed the point that an 1986 Act took 2 years to become actual law so I just cursed my bad luck and forgot about it.

Again, sounds correct. If you bought before 29th April 1988 then you are not given any protection under the regulatory complaints scheme or the ombudsman unless the firm volunteers to do so.

Sun Alliance became Resolution in 2004 and then Phoenix in 2005 so I'm pretty much resigned to them being as slippery as possible

They have nothing to do with it.

does anyone know anything about Hambro Countrywides current policy mis selling claims pre 1988 now ?? I know other companies have been forced to re-consider older claims so I am thinking of gearing up for another go.

No-one has been told to reconsider complaints before regulation. Which companies are these that you are talking about?

caw1965

thanks for your reply dunstonh

This is my first look at theses forums so a bit unsure how things work. Looks like I wrongly presumed that as the Endowment Success Stories thread sits at number 6 in the Endowments Forum and that people have posted this year that it was still a hot topic...I have just realised that it shows you the oldest posts on page 1 :doh:

I know its probably a waste of time but who knows...someone out their might know different eh ?

As for the companies who have reconsidered policys dated previous to the regulation, I refer you to supersubs post about Abbey National on the first page of the SUCCESS stories thread. Something about them being fined and changing their policy on refunds.

best regards

dunstonh

Looks like I wrongly presumed that as the Endowment Success Stories thread sits at number 6 in the Endowments Forum and that people have posted this year that it was still a hot topic...I have just realised that it shows you the oldest posts on page 1

Its a sticky thread. The board can pick threads that stick at the top of the forum even if they dont get posts.

I know its probably a waste of time but who knows...someone out their might know different eh ?

No probable about it. It is a waste of time.

As for the companies who have reconsidered policys dated previous to the regulation, I refer you to supersubs post about Abbey National on the first page of the SUCCESS stories thread. Something about them being fined and changing their policy on refunds.

That scenario doesnt match yours. He used a tied salesforce and they agreed to consider pre-regulation sales. You used a broker that was not tied and they did not agree to consider pre-regulation sales. The FSA has no authorisation or ability to get firms to agree to consider pre-regulation sales.

holly_hobby

Policies sold pre A day (i.e before 29 April 1988) and regulation means that the adviser had no duty to ensure the suitability of the policy to your requirements or risk profile - which is how post A day sales are evaluated, and why any claims re suitability for such sales can not be evaluated.

Although it is the broker who is citing their regjection, RSA had exactly the same policy re Pre-A day sales, so even if a company rep/or one of the direct sales force of RSA (or Royal Ins / Sun Alliance pre-merger) sold the policy, it would still have been rejected under the same terms.

However, by the same measure the selling agt may not mis-represent the terms of the policy i.e stating a guaranteed target figure, when there isn't one - this comes under the Misrepresentation Act 1967.

The company can not refuse to examine the sale if brought under the above Act, however as a Pre A day sale, you must have documentary evidence that a guarantee was provided at POS - without which your complaint will fail.

Do you have such documentation ?

If not, this is a dead duck and you need to move on I'm afraid.

Hope this helps

Holly

caw1965

Thanks for your reply holly

I will check my paperwork but I dont remember seeing anything like a guarantee on paper (I remember I was told verbally it would cover the mortgage and more !)

thanks again

holly_hobby

I don't doubt this may have been verbally indicated to you - and to be fair at that point there was little indication that policy returns were to be less those previously evidenced under maturing plans, but as they say past performance is not a guarantee of future performance.

Unfortunately, as there are no regulatory requirements to assess the policy against your risk profile & suitability to need, the only way of success for a pre A Day LCE complaint, would be by the presentation of a documented guarantee provided at the point of sale. As one can't be compensated for loss of expectation i.e the policy simply not performing as estimated, and pursance through the courts under MA67.

An indicated gte could be by the illustration provided by the provider itself (doubtful but has been known), the policy documentation itself, or any handwritten note or diagram generated by the adviser as part of the sale interview and sign up - which clearly led you to believe the target figure was guaranteed at maturity. Any evidenced gte and mis-representation by the broker in securing the sale, should be an uphold (if the courts don't accept any Limitation Act defence), and if so would be compensated by the brokerages' liability to meet any shortfall to target value evidenced at maturity - as you say they are still trading

If you don't have this, then unfortunately any complaint will be need to be rejected on the grounds already discussed - the one good thing is you are no longer reliant upon it to repay your mortgage.

I would also say that the current projections at FSA prescribed rates, are just that a estimate based on the noted rate of return.

However, the actual sum at maurity may be somewhat different to the estimated maturity values that have been provided (i.e maybe higher or lower depending upon the ACTUAL performance of the plan), with older policies faring better than policies taken out from mid 90s onwards.

So fingers crossed your policy has fared better than the standard rates illustrated and you're in for a pleasant surprise ..... nothing wrong with a bit of positive thinking and hope ! :A

Hope this helps

Holly x

magpiecottage

There is absolutely no chance of success here for a number of reasons:

1) The original sale was by an independent broker, NOT Sun Alliance. Therefore a complaint against Phoenix would ONLY be able to be based on it not doing what it (now or in its original Sun Alliance/Royal Sun Alliance manifestation) promised to do - i.e. a breach of contract.

2) If a Representative of Sun Alliance (which before 29 April 1988 meant an employee acting in their capacity as an employee) gave a promise that a particular maturity value would be achieved that might be deemed collateral contract and legally binding on it but as you adviser was independent they could not have done so - so even if you had evidence that would not help you.

3) Since FOS cannot help, the only source of assistance would be the courts. Because it was more than 15 years ago, the broker can use Section 14B of the Limitation Act 1980 to timebar your complaint.