Endowment Mis-selling - Don't give up!

silvercar

I would suggest giving the information you have available; you'll then know that the compensation is the amount you should receive. Try to second guess them and you'll always wonder if you could have got more money.

dreamylittledream

myk wrote:

hmm, a big ask that !!
I am sure it was the base rate from 1989 until Jan 2001 when it was changed to a tracker.
It then went from 6.5 in Jan 2001 to 4.75% in Sept 2003. It was then paid off in full.

Is that any help?

If not, does the fact that I made overpayments affect a possible compensation award one way or another?

And does the fact that it is no longer being used to pay off a mortgage make any difference?

thanks again

Unless it was a very generous mortgage deal it was unlikely to be base rate between 1989 and 2001! The use of exact mortgage rates doesn't usually have any drastic effect on the amount of compensation, although as a very general rule if you had higher rates than a 'normal' mortgage the amount will increase and if you had lower rates then SVR it will usually decrease. Personally I wouldn't get too hung up on the use of assumptions - the affect is likely to be minimal.

They will want to know about any overpayments you made to your mortagge however, and the effect of these in the calculation always decreases the amount of compensation. This is because it is assumed that you would have also reduced the balance of the hypothetical repayment mortgage by the same amount.

The calculation will cease ('capped') at the date you stopped using the policy to repay the mortage and interest will be paid on the loss amount you had incurred at the date you stopped using the policy to support your mortgage. Halifax tend to then offer a refund of premiums with interest in your endowment to date. These two figures are added together and deducted from the current surrender value of your policy. The difference (if any) will be your compensation.

myk_2

I have asked them to calculate any compensation based on thier assumtions.
They have stated that they require no further information to do this.
I paid it off (got a new mortgage) in September 2003.
I have been paying £28 a month since July 1989, and it matures in 2014.

Sorry, I dont really understand the method described above....!

Do you mean a refund of all premiums from 7/1989 untill 9/2003?

I am getting (more) confused...lol

dreamylittledream

When you paid the mortgage off and took a new one did you stop using the policy (ie put the mortgage on repayment)?

Compensation is worked out generally by comparing the endowment mortgage you took with a repayment mortgage that you would have taken had you been correctly advised.

This comparison looks at whether your endowment mortgage cost more or less then a repayment mortgage and also how much capital you would have paid off had you had a repayment mortgage. These two figures are added together (although the first is usually disregarded is the endowment mortgage was cheaper) and the current surrender value of your policy is deducted. The difference therefore is your compensation.

If you stopped using the policy in 2003 then the above comparison will cease in 2003. The amount of capital you would have repaid at that point, plus any additional amount the endowment may have cost over a repayment mortgage, is then added to a refund of the premiums paid to your endowment since 2003. This is then all deducted from what your policy is worth now...

Hope that has made it a bit clearer!

sondheimsoc

I have started the process of complaining about our two policies. One was with Scottish Equitable and we sold that last August. The other, which is still running, is with Friends Provident. Th adviser has replied to our initial letter and sent us an Endowmen Mortgage Questionnaire, which says is it a scaled down version of the Ombudsman's questionnaire.
One of the questions asks about windfall benefits. I have a vague recollection that we had something from Friends Provident about 6 or so years ago and I think we sold the shares straight back to them. Three questions - presumably I can ask FP to let me have details of any transaction? and what bearing do you think that having received such a windfall could have on any claim?
Last questions - do you think that having sold the Scottish Equitable policy will impact on our claim?
Thanks
Lynne

Lottie

dreamylittledream wrote:

Hope that has made it a bit clearer!

It has certainly helped me - thanks

I got my letter yesterday to say by their calulation (As you described) I had not suffered a loss. Mainly because I stopped the mortgage after 8 years but continue to pay the endowments.

Surey the fact that I closed the mortgage early so did not make a loss is not exactly the point - I was promised a sum of money after 25 years and I was also promised (Shame it is not written down) a bonus. I will be getting 60% of what I was promised and no bonus. That is what I was complaining about!!!

Does anyone have any views? Am I being naive?

dunstonh

Surey the fact that I closed the mortgage early so did not make a loss is not exactly the point

You are complaining you should have gone repayment. The fact you repaid the mortgage would have happened on either method so its only the point upto the repayment of the mortgage that matters. Now, if you had sought advice after repaying the mortgage on whether to keep it or not, then you could complain to that advisor.

I was promised a sum of money after 25 years and I was also promised (Shame it is not written down) a bonus. I will be getting 60% of what I was promised and no bonus. That is what I was complaining about!!!

You cannot complain about investment returns. The complaint would be outright rejected if you did.

Lottie

Thanks very much - that is very helpful even though it is not what I wanted to hear.

W_s_n

Can I just say that I have done the letter, and posted it off to the company. I've no idea if the complaint will work or even if we have done it in time.... Our morgage started in 1998... Can anyone help?

thanks
W_s_n

dreamylittledream

It depends on many things:

Who is the policy with?

Who sold it?

When did you first recieve a letter warning you it was not on track?

If the policy was sold in 1998 then in theory the sale should be well documented and easily defendable by the elling agent as fact finds etc had improved vastly by that time. However this of course is not always the case.

And plenty of companies have lost even recent records...

All you can do for now is wait and see...