Endowment Mis-selling - Don't give up!

Furniture_man

Further to my post on the 26th October, received letter today fro my Insurance Company (who I purchased endowment through) informing me that I was made aware of the pitfalls of such a policy and therefore they cannot uphold my claim that I was mis-sold this endowment.

What infuriates me is that they have taken 11 months to arrive at this decision!

It may seem pretty pointless now, but I am going to send all documentation to the Ombudsman.

More hassle!!!!!!!!!!!!!!!!1

Still, I am of the opinion that these delays in arriving at decisions are designed to ensure claimants just give up.

Well, here's one person who isn't giving up despite the hassle and delays.

TrickyTrotter_2

Still, I am of the opinion that these delays in arriving at decisions are designed to ensure claimants just give up.

Too right, HBOS dismissed my initial claim out of hand, when I finally manged to get the Ombudsman engaged, HBOs immediately admitted I had been missold the policy.

How many people give up at this stage?

dunstonh

It costs the providers money every time a case goes to the ombudsman. From a business point of view, many insurers will take a view on cases where the compensation is relatively small that its cheaper to pay out then have the case go before the ombudsman.

yarwood_2

???

Read all of the responses with interest and confusion!
Have 2 endowments, one from 1988 and one from 1990.
Very naive at the time and very sad now!
Both way out in terms of money back or coming even close to paying off the debt.
First complaint upheld, offered compensation but confused by the sums- how do we work out what is fair and is it in line with other companies?
Second complaint [bought from independent broker] refused by them. Where do we go from here?
We genuinely believed on both occasions that our mortgage would be repaid and that we would get a lump sum, we had no savings then and very little now, we feel badly mislead, can any of our 'web friends' out there help us?
Thanks in anticipation

dunstonh

???

Read all of the responses with interest and confusion!
Have 2 endowments, one from 1988 and one from 1990.
Very naive at the time and very sad now!
Both way out in terms of money back or coming even close to paying off the debt.
First complaint upheld, offered compensation but confused by the sums- how do we work out what is fair and is it in line with other companies?
Second complaint [bought from independent broker] refused by them. Where do we go from here?
We genuinely believed on both occasions that our mortgage would be repaid and that we would get a lump sum, we had no savings then and very little now, we feel badly mislead, can any of our 'web friends' out there help us?
Thanks in anticipation

What reason was given for it being declined? Without knowing that, its not really possible to give guidence.

yarwood_2

Thanks for reply.
Having waded thru 5 pages of financial jargon, i'm still not sure!
The brokers 'believe that an endowment mortgage was appropriate for your circumstances based on the information provided for you at that time' They also say that as we already had an endowment policy we were 'familiar with endowment policies and able to understand the risks involved in these types of investment'!! How patronising; incidentally the policy that we were 'familiar with' [Royal & Sun Alliance] is the one that has agreed we were mis-sold and has offered us compensation.
We also have a letter from the broker [June 2000] saying they had received a letter from Standard Life re our policy and that they do not believe we had any cause for alarm?!
No wonder we are confused, hope you can help

dunstonh

Ok, purchasing a second endowment does make it harder but not impossible. By the sounds of it, it isnt the broker that is handling the complaint. It is either a network or PI company. The comment "based on the information supplied" indicates that they may have some documentation that backs up the risk part of the sale. You could ask to see what documentation was supplied as you don't believe it.

We also have a letter from the broker [June 2000] saying they had received a letter from Standard Life re our policy and that they do not believe we had any cause for alarm?!

Standard Life projections are inaccurate as they tend to take a lower "current value" than is actually the case. You can spot this by looking at the 4% projected figure and then look at the guaranteed sum assured and annual bonuses (ignore final bonus). If the annual bonus and guaranteed sum assured is higher than the 4% projection, then you know that you have an inaccurate projection.

Standard Life are demutualising in 2006 and a payment is being made to policy holders of with profits plans. There are a couple of ways they can pay this but there have been suggestions that they will pay the benefit into the plans rather than issue shares or a cash windfall. This would boost the value of the plan and may help reduce or eliminate the shortfall on endowments.

The 4% projection would be a prudent one to use with Standard Life but its worth noting that the plans that i observed over the last few months have had projections with smaller shortfalls than before.

yarwood_2

Thanks
The rejection letter is definitely signed by the broker who originally sold us the endowment and makes no ref to a third party.
I will write and say we are unhappy with the response and ask for copies of the evidence that lead him to assume that we knew what we were talking about. We did not but are learning quickly and with your support will not go down without a fight!

Pod_3

So reading all this determination made me complain to the building societies on the way I was sold endowments.
It is very early days with one replying and requesting further information and another not responding at all - yet.

I now have recieved a lump sum of money that I believe (from other advice in this site) I am best to use and pay off my mortgage - all of it.

My question is should I wait for an outcome on the complaint?
AND am I best keeping up payments on the endowments as an investment?

May be basic questions but relatively naive on finance.

dunstonh

My question is should I wait for an outcome on the complaint?

Yes.

AND am I best keeping up payments on the endowments as an investment?

Depends on the company, the funds you are invested in, the tax status of the plan along with your tax status (ie, has it qualified yet or would surrender cause a chargeable event) the term and the charges.