How binding is a endowment maturity notice?

DrewE

Two separate questions really

1. If you believe a maturity value is below what it should be. Can you haggle with the provider?

2. If a provider offers a maturity on a policy not yet due to mature (i.e. 3 years early) and that maturity value is greater than the planned for amount. Are they legally bound to honour that maturity value notice?

Thrugelmir

Maturity values are defined calculations. So there's no haggling.

Maturity is at the end of the contractual term. Anything in between now and then is a current value. Which can fluctuate.

What's a planned for amount?

Annisele

DrewE wrote: »

2. If a provider offers a maturity on a policy not yet due to mature (i.e. 3 years early) and that maturity value is greater than the planned for amount. Are they legally bound to honour that maturity value notice?

I'm not sure what you mean by a "maturity value notice" on a policy three years from maturity.

If the provider has just told you the current surrender value, that's subject to change (and will likely change daily).

DrewE

Planned amount was the original target aim to meet the mortgage.

Shall we just say that the amount they are offering is £4k over that figure and the estimated value on their last notice was for a £5k shortfall at maturity. That means a gain of £9k over what was expected but as already said, this policy was not due to mature for 3 more years.

The thing is they have sent a final payment form to be signed and accepted as their full and final discharge of their liability under the plan. Once signed and returned they will make payment within 7 days.

Whether by error or not they have put this in writing. If this is an error, I ask! If this is signed and sent back, are they legally obliged to honour their offer?

Annisele

If the provider has made a mistake, it isn't legally bound to honour the mistake.

The Financial Ombudsman Service has previously awarded £200 distress and inconvenience where:

Disappointment at being told the surrender proceeds of a policy were to be materially less than the consumer was previously led to believe by the financial business, because the business made an error in calculation.

It didn't award the mistaken amount.

(That doesn't mean £200 is always fair in these circumstances - or that it's never fair to award the mistaken amount - but it gives a guideline).

DrewE

OK thanks for that so far!

Now, can we take the scenario one stage further.

If the form is signed and returned and the company make the pay out as per the notification, do they then have any right to claim back monies that they had perhaps mistakenly paid out? either now or at some future date?

dunstonh

do they then have any right to claim back monies that they had perhaps mistakenly paid out?

Yes. An error does not entitle you to keep the money.

DrewE

Moving on...

The process has been followed and the provider originally ignored the claim.

A further letter requesting the settlement as offered brought the reponse "Sorry for any confusion"

A further letter stating "There is no confusion" and basically you made an offer of which was accepted.

Response "I am able to upheld your complaint as we did send you the wrong form however we will not honour the value sent with that policy number"

They have arranged to send a cheque for £50 in recognition of distress and inconvenience.

So effectively they have admitted they were wrong.

is this worth taking to small claims?

opinions4u

Small claims won't back you.

FOS might suggest an increased award. But we're not talking anywhere near four figures.

ValHaller

DrewE wrote: »

.... is this worth taking to small claims?

What are your provable losses? (Another way of saying 'probably not')

kingstreet

Can we clarify a point here.

Did you get a maturity projection, or did you get a surrender quotation?

The latter is normally guaranteed for a month. The former is simply an idea of what a plan will be worth in the future, based on certain FSA imposed growth assumptions.

Oranges and apples, so far.