Endowment Mis-selling - Don't give up!

Loobeylou

Have not read this entire thread, as it would just take too long.

However, our case is that we have a mortgage with endowment which were taken out in 1986, which I believe is prior to the cut off point.

It is a relatively small mortgage and we are not sure whether we have a claim or not. We were not advised of any risks, just that an endowment type mortgage was the best to go for. We have five more years of payments, and our endowment could just scrape through at paying off the mortgage at the end of the term in 2111.

This is rather different from the vast sums of money we were led to believe we would have at the end, after having paid off the mortgage.

Do we stand any kind of chance of claiming anything? Or are we on to a loser?

Edit: Mortgage is with the Halifax and the endowment is with Legal and General.

A letter from L&G in December 2002 stateed that the plan was on track to repay the target amount of £15000, but that was only if the rate of growth continued. It stated that if the rate grew at 4% each year there would be a projected shortfall of £1500, at 6%, a projected surplus of £500, and at 8%, a projected surplus of £2800. So it seems to me to be a debatable point as to whether we will scrape through to pay off the mortgage with the endowment settlement figure.

Advice welcome.

Colwn

Lally wrote:

I work in the industry and see cases every day where people say "i was promised it would pay off my mortgage and provide a lump sum" but there are illustrations on our file which the client has signed, and which clearly show the possibility of a shortfall. Sure, if things had continued as they were then the policyholder would have a HUGE surplus. But, they didn't, and now people want to complain.
.

I understand what you're saying but I think you're missing my point. I honestly don't know if I signed an illustration which said there could be a shortfall because I didn't have a clue what I was doing. I trusted my independent financial adviser who told me clearly and confidently that the product would definitely pay off my mortgage and give me a surplus. And he wasn't a bad guy or a conman, he was just repeating what he'd been told by the people running the industry who saw the chance to make a fortune. They were the people blinded by greed, not us, because they actually knew better. They knew there was a real risk.

But they also knew they would find it much harder to sell their product if they told people that there was no guarantee it would pay off the mortgage. So of course they weren't going to tell us that if the stock market took a dive their charges would eat up the surplus. If I'd been told by my adivser that there was a real risk then I, for one, would have gone for the repayment option.

dav964

For ages I regretted throwing out the old letters I had from Lloyds when I took out my endowment policy (1987) as I thought I had no grounds to complain. Following the advice given here I thought I'd have a stab at the letter template on the Which? website and sent off the letter along with a photocopy of the policy certificate.

Nothing else. No letters. No evidence of misselling. Basically I was trying a punt.

Received a letter from the bank today offering me £4,416.65.

So there you go. If you haven't done anything 'cos like me you thought you needed to offer up some proof think again.

And not only that, the policy is with Standard Life so I'm in line for a windfall when they demutualise...

Dave B.

vinno65

Lally wrote:

I think a lot of people here are getting confused with the amounts they are being awarded. It is not compensation per se. It is simply the difference between what you would have paid off had you taken a repayment mortgage, and the amount you have paid into your endowment mortgage. In certian cases some other factors will be added into the calculation (such as being advised to cancel an exisiting policy) but the redress is designed to put you back in the position you were in.

I work in the industry and see cases every day where people say "i was promised it would pay off my mortgage and provide a lump sum" but there are illustrations on our file which the client has signed, and which clearly show the possibility of a shortfall. Sure, if things had continued as they were then the policyholder would have a HUGE surplus. But, they didn't, and now people want to complain.

NB I bought one too, in 2000 - what a fool! But I received an offer and I accepted it and quickly changed to a repayment.

Hi Lally,
I wonder if you would expand on your post. On the one hand you say that you work in the industry and have seen illustrations signed by people that clearly show the possibility of a shortfall. This is not in itself enough to make a sale compliant. The salesperson must explain specifically and verbally that an endowment is not guaranteed to pay off a mortgage. How many people, who after recieving a lengthy sales patter about how wonderful endowments are, how much money would be left over, how much cheaper they were than repayments etc etc etc, were the passed a ream of documents and told to sign here, these documents explain all that you have just been told!!. We as consumers have a right to believe what we are beig told by a salesperson is the truth. Salespeople can not rely on product literature later, that they payed scant regard to at the point of sale.

If these sales people had specifically and verbally told people at the point of sale that endowments were not in fact guaranteed to pay of your mortgage, how many people do you think in all honesty would have bought one and in fact gambled their homes on the chance of making a tax free lump sum?

On the other hand you say that like a fool you also bought one. Were you aware at the point of sale of all the risks? and if yes then why did you recieve redress?
regards Vinno

vinno65

savingnow wrote:

I'm probably going to upset many people who were genuinly mis sold endowments, however the normal premise applies, that you get nothing free in this life which was true in the 80's as it is now.

Easy for me to say since I took out a repayment since I decided to pay more off my mortgage rather than go for the greed element of a potentiallty a big carrot at the end of the endowment. I was given the selling of endowments by a broker and bank and both the statements which i would have had to sign did state that the investment could go up or down.

Yes there were mis sellings but how many people were told the truth only to find their greed made them blind.

It was a choice you made therefore don't complain and certainly don't expect any compensation.

What about those people who lost as a result of equitable life, did they get compensation.

Apologies again to all those people who were genuinley mis sold, which I believe is only a small proportion.

Don't forget, nothing is free. free today means someone else needs to pay tomorrow.

Hi Savingnow
you seem quite proud of the fact that you avoided the endowment pitfall but it seems to me that it was more through luck than judgement. It seems you always had it in you mind to overpay your mortgage and thus pay it off early, one reason the sales patter wouldn't have worked for you. Also you say that the statements you would have had to sign did state that the investment could go up or down, you do not say whether the salesperson explained this to you or it was your good fortune that you spotted this on the statement.
You say that most people were told the truth but greed made them blind. Are you seriously saying that most people were fully aware of the risks but still chose to gamble their houses for the chance of a tax free lump sum,ridiculous!
Also you say you don't get something for nothing. We weren't expecting something for nothing we were paying a monthly premium for 25 years.
And it is not compensation it is redress. People who have miss-selling complaints upheld (and there are many of them, not just a few) the money they are given puts them into the position they should be in had they not been miss-sold. They do not recieve anything above and beyond this.
Finally because the poor people involved in the Equitable Life fiasco are getting stitched up does that make it right that people miss-sold endowments should be stitched up too!
regards Vinno.

AMH999

Can anyone help? My father has now received an offer of c.£1500 compensation and his mortgage is due to finish in 18 months. However the wording is "To allow policy number xxx to continue and receive £1,511.42 compensation" Yet they are stating that he returns his policy to them.
so, does this mean the mortgage is finished or is he to get a cheque in order to help him make these payments? Also if he surrenders the policy does this mean he won't get any bonuses should there have been any? I don't see why he would have to surrender the policy in order to receive compensation.
It says it's been calculated as:
Total endowment premiums you need to make after you retire (2002 - 2007) as £559.80
Total mortgage int payments you need to make after you retire £997.26
You do not need all this compensation straight away so we have assumed that you will invest part of this money from now until the date you need it.
What on earth does this mean? I have written to them to clarify but we only have 10 days left to claim.
Many thanks for any help!

Loobeylou

Loobeylou wrote:

Have not read this entire thread, as it would just take too long.

However, our case is that we have a mortgage with endowment which were taken out in 1986, which I believe is prior to the cut off point.

It is a relatively small mortgage and we are not sure whether we have a claim or not. We were not advised of any risks, just that an endowment type mortgage was the best to go for. We have five more years of payments, and our endowment could just scrape through at paying off the mortgage at the end of the term in 2111.

This is rather different from the vast sums of money we were led to believe we would have at the end, after having paid off the mortgage.

Do we stand any kind of chance of claiming anything? Or are we on to a loser?

Edit: Mortgage is with the Halifax and the endowment is with Legal and General.

A letter from L&G in December 2002 stateed that the plan was on track to repay the target amount of £15000, but that was only if the rate of growth continued. It stated that if the rate grew at 4% each year there would be a projected shortfall of £1500, at 6%, a projected surplus of £500, and at 8%, a projected surplus of £2800. So it seems to me to be a debatable point as to whether we will scrape through to pay off the mortgage with the endowment settlement figure.

Advice welcome.

Anyone got any advice please??

vinno65

HI Loobeylou,
Some firms will look at endowments before the cut off date. They have voluntarily agreed to do so. If yours is an L&G sold via the Halifax then you might have a chance that they will look at it. I believe the people who are having trouble with pre1988 endowments are those who had them sold by IFAs,estate agents,solicitors etc. Anyhow it will only cost you the price of a stamp to find out!. Use the endowmentaction.com website to help you draft your letter and send this to whomeverer YOU believe sold you the policy. If this is the Halifax then the Halifax will either deal with it or send it on to L&G. If it was sold by an IFA then you are probably stuffed.
regards Vinno

dreamylittledream

Loobeylou wrote:

Have not read this entire thread, as it would just take too long.

However, our case is that we have a mortgage with endowment which were taken out in 1986, which I believe is prior to the cut off point.

It is a relatively small mortgage and we are not sure whether we have a claim or not. We were not advised of any risks, just that an endowment type mortgage was the best to go for. We have five more years of payments, and our endowment could just scrape through at paying off the mortgage at the end of the term in 2111.

This is rather different from the vast sums of money we were led to believe we would have at the end, after having paid off the mortgage.

Do we stand any kind of chance of claiming anything? Or are we on to a loser?

Edit: Mortgage is with the Halifax and the endowment is with Legal and General.

A letter from L&G in December 2002 stateed that the plan was on track to repay the target amount of £15000, but that was only if the rate of growth continued. It stated that if the rate grew at 4% each year there would be a projected shortfall of £1500, at 6%, a projected surplus of £500, and at 8%, a projected surplus of £2800. So it seems to me to be a debatable point as to whether we will scrape through to pay off the mortgage with the endowment settlement figure.

Advice welcome.

Looby

It does depend who sold you the endowment as it started pre A day (April 88). If it was sold by a lender or life office (or a representaive of a life office) then you will be able to complaint (this is because you have the right to appeal any decision to the Ombudsman. If it was an independant adviser then you have little chance.

You can ring L&G and ask who receievd the commision for your policy which would tell you who to complain to.

However give the shortfall/surplus figures you are quoting for the policy it is unlikely that any comepnsation will be due. This is becuase your policy is probably currently worth more now then you would have repaid had you had a capital and interest mortgage...

Loobeylou

dreamylittledream wrote:

Looby

It does depend who sold you the endowment as it started pre A day (April 88). If it was sold by a lender or life office (or a representaive of a life office) then you will be able to complaint (this is because you have the right to appeal any decision to the Ombudsman. If it was an independant adviser then you have little chance.

You can ring L&G and ask who receievd the commision for your policy which would tell you who to complain to.

However give the shortfall/surplus figures you are quoting for the policy it is unlikely that any comepnsation will be due. This is becuase your policy is probably currently worth more now then you would have repaid had you had a capital and interest mortgage...

Thanks for your advice - I have been in touch with Legal & General and have found out that the endowment was sold to us by the Halifax, with whom we have our mortgage. We have forms to fill in which have been sent to us from the Halifax, and will get them off asap.