Endowment Mis-selling - Don't give up!

Anya

I have a question on behalf of my mum. They were mis sold a mortgage and have now received a letter saying that they are entitled to compensation, but also that they were willing to give them an extra £100 for the inconvenience. She says that she finds this rather insulting considering all the stress, anguish and downright hassle the whole thing has caused. She wants to know whether she has any right to ask for more and how she would go about it if she could. Could she just write a letter back saying how much she wanted for the inconvenience or would she be better going through a solicitor. Any advice gratefully received!

dunstonh

Anya wrote:

I have a question on behalf of my mum. They were mis sold a mortgage and have now received a letter saying that they are entitled to compensation, but also that they were willing to give them an extra £100 for the inconvenience. She says that she finds this rather insulting considering all the stress, anguish and downright hassle the whole thing has caused. She wants to know whether she has any right to ask for more and how she would go about it if she could. Could she just write a letter back saying how much she wanted for the inconvenience or would she be better going through a solicitor. Any advice gratefully received!

The important thing to remember that she is entitled to nothing above putting the situation back to where it would have been on repayment mortgage. Some insurers will pay for advice sought from an IFA for cost of advice in converting to repayment and making the claim (but not to a claims company). However, there is nothing for inconvenience.

So, she is getting £100. She could push for more but they don't have to and getting a solicitor involved will not increase the payout and the insurer will not cover a solicitors costs.

jlm_3

dunstonh wrote:

It depends on how it was purchased. If it was from an insurance company rep then the insurance company may deal with it.

dustonh, sorry to go back a few posts - the policy was bought from a FA working for the solictors who undertook the conveyancy of our property. The solictors in question still practise but no longer deal with any financial advisors.

MrsAk_2

Having just received a red letter from royal London in relation to one of my endowment policies I have a few questions, which I would be grateful if anyone can help with.

1. Two years ago when we received the last letter, the policy was still on track to pay out the target amount - the next letter we received (last week) was a Red letter notification - we have only 7 years to go on our mortgage, and our shortfall may be £13,000 - should we have received a warning letter (amber?) during the past 2 years, or is this normal.

2. When we originally took out this endowment policy prior to the purchase of a new house, we did so on the basis that my Husband already had one small endowment which had been running for a number of years - we were told by the salesman that there were 2 options open to us; either to cash in the small endowment and then have a straight repayment mortgage - which our advisor said would be stupid - or to change my H's policy into joint names and then take out another endowment to cover the increase in our mortgage - we took the 2nd option, as we were told it was the most sensible thing to do - however, we were never told that we could have a part repayment/ part endowment mortgage . My question is whether this might be grounds for claiming we were mis-sold the policy??

Obviously, like many other people, the salesman only ever spoke about how big our lump some was going to be etc., etc. and I do not recall risk being discussed at all. we bought the endowment in 1996, and I know that the insurance salesman had just failed his regulatory exams, although I do not whether this would have any baring on the matter at all.

Because the salesman visited us at home, pretty much everything we were told was verbal, and we only have post sales information which mentions that the endowment figures discussed were targets rather than guaranteed

Nuuk

It depends on how it was purchased. If it was from an insurance company rep then the insurance company may deal with it.

I took out my endowment mortgage in 1984. I bought it from Norwich Union but they are saying that I bought it from the estate agents (now long out of business of course).

I have letters from Norwich Union (local branch) regarding the sale of the policy, and have supplied the name of their rep but the FSO still found in favour of NU!

NU acknowledge that they had an employee by the name that I have supplied but say that because of 'mislaid records', they cannot confirm that he was a rep. And that it seems is good enough a defence for my claim to be dismissed.

Yes, I have complained to the FSO and had the usual fob off in reply. I guess my only course of action is to try for legal aid and go through the courts.

The FSO have all along told me that because I took out my policy prior to the 1988 Financial Services Act, I don't have a case (but they let me hang on for two years for a decision).

Has anybody who bought an endowment policy prior to that act won any claim through the FSO?

dbs

ME this was done through the FOS
https://www.financevictims.co.uk

click on discussion board then click on General endowment problems
click on pre 1988 endowment by Daveboygreen
sorry could not get a short cut to work.

rjl

I've just received compensation for an endowment mortgage I took out in 1987. Here's a summary of my case- I hope someone will find it useful.

When my wife and I moved our house in 1987 our local branch of the Halifax sold us an mortgage (for £36000) and a Clerical Medical low cost endowment policy (sum assured about £12000) to pay it off after 25 years.

In late 2003 we got a 'red' warning letter stating the policy would not be able to pay off the original loan. The shortfall forecast was £11000. We had already seen this coming and switched £6000 to a repayment basis a couple of years before, but that still left us with a shortfall.

So I decided there was nothing to lose by complaing about mis-selling.
Halifax rejected my complaint and pointed out that different regs applied in 1987. However, we pressed on and dug out every piece of paper we could find relating to the original mortgage appication and an additional £16000 we'd borrowed on a repayment basis in 1998.

We sent the claim (citing the usual reasons about being unaware of the level of risk involved etc) to the FOS, in June 2004 and waited.

In December 2004, the FOS wrote saying the Halifax had agreed to pay compensation and, this week, we finally got a cheque (for £5500) - RESULT !!!.

Now I'm no expert and I didn't get any advice or help from anyone. I just tried to compile the best mis-selling case I could based on the docs I found and the Which? endowment action website.

I think the following factors may have helped.

1. Clerical Medical was bought by the Halifax some years ago. So everything was 'in-house' as a Halifax branch sold me the policy and the mortgage which were both provided by other parts of the same organisation. So they couldnt blame anyone else.

2. I strongly emphaised my lack of knowledgement about what kind of mortgage I'd actually bought and the risks involved. The Halifax couldn't produce anything to disprove this.

3. I described all meetings with Halifax staff about the mortgage as 'form filling exercises' where there was no discussion about our needs in any detail. Just please show us your payslips and sign here, here and here. That's probably a bit harsh - but we needed as strong a case as possible

keziah

We took out a with-profits endowment policy with Pearl Assurance in 1988 (they say it was 1992 but my records say different) for £22000. The salesman told us that not only would it pay off the mortgage, we would get a lump sum as well ("enough to pay for [our] daughter's wedding" was his exact comment). There wasn't even a mention that it might not pay the mortgage. We were very young & naive with no financial know-how. (we don't do anything with a risk)

I have complained, and just had a letter to say they accept it was missold and giving us 3 options, but I'm not sure what to do.

The last letter we had- May 2004- said that at 4% our final projection is £15136. Their price promise will bump this up by £4500 so the projected shortfall is £2364. Maturity date is 1-3-2010.

Their offer is (a) leave things as they are (b) continue the endowment but lose the price promise & get £5730.19 in compensation (c) cancel the policy and get £7253 surrender value plus £5730.19 compensation.

Of the 3 options, (b) seems the most logical but I don't want to make another big mistake. Is there any formula for working out how much it will cost vs how much we get back, or anything else we should take into account before making a decision? Or do we go back & say it isn't enough?

dunstonh

Pearl are financially weak and the with profits fund has limited potential for future growth. I wouldnt keep one if I had one with them. That being said, i did come across one a couple of weeks back that showed a shorfall projection but the current value was higher than the mid rate projection that was used at point of sale indicating it was on track for a surplus.

I gave advice on keep/surrender on around 200 Pearl policies last year and information supplied by Pearl was inconsistent and inaccurate on about 1 in 5 cases. So read carefully and get it double confirmed in writting by Pearl if figures are involved (keep copies of your letters as well).

trevw_2

New to this site, but just been trawling through this thread.

My Mum took out an endowment policy in 1991 for £55,000, due to mature when she is 73. This was with Guardian through her BS Nationwide.

She's had 1 or 2 'amber' warning letters but didn't want to top up her monthly payments. The last predicted shortfall I saw was something like £15,000.

She's been overpaying her 'interest only' payments to the BS and is now downsizing to pay off her mortgage debt (she's 62). She has just asked Guardian what the surrender value would be now - they have said about £9,000!!! She was hoping to use some of this for her downsizing or keep as savings plan.

If we go the Which route via her BS (and ombudsman if needed), what should she do if she gets compensation? Surrender the endowment?

Does the fact that she will soon no longer have a mortgage affect her claim?

Sorry I don't know full details, but before reading this thread, I thought it was too late for her to claim anything.