Endowment Mis-selling - Don't give up!

oxter

Anyone know when in 1988 the legislation became effective? I think it's August and my policy was sold in July so maybe I haven't a claim anyway?

Is misselling possible by postal encouragement without involvement of a salesman?

Here's my situation. I acted on postal invitation.

There was no mention in the literature which I have retained that there were risks involved.

In fact, the literature I received from the Leeds, (Now Halifax) which led me to take out the Standard Life Policy, said that “you CAN look forward to receiving a substantial tax-free cash lump sum ………… at the end of your mortgage term”

The “Leeds” leaflet (presumably drawn up in conjunction with Standard Life, or at least with their knowledge and approval) told me that “the policy ….provides ….. a lump sum on maturity which should be sufficient to not only repay the mortgage loan, but also to give you a sizeable tax-free lump sum as well.”

It seems that although I bought the policy from Standard Life, I was sold it by the Leeds/Halifax.

As the policy will apparently not provide the substantial cash surplus over and above the repaid loan, as per the Illustrative Cash Surplus (albeit not guaranteed), I feel an element of miss-selling may have taken place.

I have no wish to surrender this policy in light of the demutualisation proposals of Standard Life.

I complained initially to Standard Life who have passed the complaint to Halifax PLC.

Any predictions on the outcome?

dunstonh

Anyone know when in 1988 the legislation became effective? I think it's August and my policy was sold in July so maybe I haven't a claim anyway?

You are covered after 29th April 1988.

Is misselling possible by postal encouragement without involvement of a salesman?

Yes. However, the documentation issued is the key here. The wording is very important on a direct offer. So, the provider can trip up in that area. However, there would be less protection for you on the basis that the documentation was given to you prior to signing up and you should have read it.

There was no mention in the literature which I have retained that there were risks involved.

Possible but unlikely. Although there were not many warning messages needed in those days. (although, lucky for you, the complaints proceedure tend to look at todays standards and assume they should have been in place then).

I complained initially to Standard Life who have passed the complaint to Halifax PLC.

Any predictions on the outcome?

It really depends on the documentation, as mentioned. If you wanted a guess, and it would have to be a guess because I havent seen that documentation, your complaint will be rejected. They are bound to find some documentation that states somewhere that the repayment of the mortgage is not guaranteed.

elegy

I know that Aug 88 was a cut off date BUT it isnt fixed in stone. I have a 1986 policy endowment claim ongoing, I cant say I have been compensated yet, and the claim has been going on since 2003. However the ombudsman has not rejected my claim after a few queries and the ABBEY asked for some further details only this week so I am still hopefull and it is worth being persistent.

scarey_man

My endowment was sold to me by an IFA.
I sent a letter to the endowment company (Standard Life) and they say I should take it up with the IFA.
Is this correct?
Also, what would happen if the IFA is no longer in business?

oxter

dunstonh wrote:

It really depends on the documentation, as mentioned. If you wanted a guess, and it would have to be a guess because I havent seen that documentation, your complaint will be rejected. They are bound to find some documentation that states somewhere that the repayment of the mortgage is not guaranteed.

Well there is a statement on the leaflet "Whilst there is no guarantee... etc" averything else on the leaflet is a "come on". Huge print on front - "How YOU could pay off your mortgage AND receive a substantial TAX FREE CASH LUMP SUM at the end of your mortgage term.

However the letter I got at the time inviting me to "reap the unique benefits of an endowment mortgage" made no mention of risk or of not guaranteeing the lump sum. It did of course guarantee to pay off the mortgage in full if I popped my clogs.

Anyway, thanks very much for looking in to this for me, and to others who have added grist to the mill. I shall await the outcome without too much hope or expectation. At least I had a very satisfactory outcome from a previous misselling complaint to Standard Life.

Oxter

dunstonh

scarey_man wrote:

My endowment was sold to me by an IFA.
I sent a letter to the endowment company (Standard Life) and they say I should take it up with the IFA.
Is this correct?
Also, what would happen if the IFA is no longer in business?

They are correct. If its prior to April 1988, then you are out of luck. If its post April 1988, then you should complain to the IFA.

If the IFA is no longer in business, you have a couple of options. The IFA may still be in business but at a new address or may be part of a different company now. Also, sole trader/partner IFAs have a lifetime liability, even after the business is closed. You can contact Standard Life and ask them who the servicing IFA is. This would be the details of the IFA firm that is currently noted as "servicing agent". Assuming you have never transfered it to another IFA yourself, then this would be the firm you should complain to. Alternatively, you could complain to the Financial Services Compensation Scheme. They will also do a search themselves. However, this is very time consuming and you may find it quicker to check with Standard Life yourself first.

If the firm was a member of a network, then you should complain to that network directly. The original documentation would confirm that "so and so is a member of xxxxxx company which is authorised and regulated by.....blah blah".

If the firm is confirmed as being out of business, then you can complain directly to the FSCS.

scarey_man

Just contacted the IFA who now no longer works for the company that sold me the policy. That company is now no longer in existance.
The IFA I spoke to now runs another mortgage business.

Policy was started in 1996.

Should I persue him, or still go through Standard Life to find out who the servicing agent is?

dunstonh

Should I persue him, or still go through Standard Life to find out who the servicing agent is?

If the company was not a network member, then go straight to the FSCS. If it was a network member, make the complaint to the network. They will hold all the client files (in theory).

scarey_man

dunstonh wrote:

If the company was not a network member, then go straight to the FSCS. If it was a network member, make the complaint to the network. They will hold all the client files (in theory).

Are there recognised Networks, or is it just a network between various companies that exists only between themselves?

dunstonh

Networks are authorised by the FSA and are recognised. Technically, a network member is an authorised representative of that network. Although the IFA will own his clients, business etc. I suppose the closest comparison would be a small retailer who owns everything but purchases his goods from Mace, Londis and others and pays a fee to them for the benefit of having combined buying power of all the small retailers and a central delivery of goods.

With IFAs the network takes on the complaince (complaints and monitoring). If an IFA ceases trading, they are meant to pass all their client files to the network as the network will remain responsible for handling any future complaints.

The headed paper, business card and comp slips must contain the FSA compliance message and that would show if the member is directly authorised or is an authorised representative of the network. If you have anything from that company, take a look for the compliance message.