Endowment Mis-selling - Don't give up!

dunstonh

I have been offered all monies I have paid in, plus interest calculated at 8% as directed by the FSA.

To me this is not compensation whatsoever. Compensation to me means being offered more, as a gesture of good faith.

I am going to write back and politly refuse this first offer, but I was wondering if this has happened to others here, and if so, what was the outcome.

They have offered you exactly what they should have done for a pre-sold endowment. They have no reason to offer you anymore and I very much doubt they will.

The key is what you have said " I have been offered all monies I have paid in, plus interest calculated at 8% as directed by the FSA."

dreamylittledream

trops wrote:

After reading this thread I decided to make a complaint about an endowment I was sold back in 1991. This was sold to me for future mortgages. At the time I didn't have a mortgage, but being young, the rep from the company easily convinced me that this was sound financial planning.

When I bought my home I didn't use this policy, and have let it run as a savings plan. But, the yearly projections were not following that of the initial guide when purchased.

I have received a letter from the company telling me that I have a case of mis-selling, and that they want to return me to the point I would have been if I hadn't purchased this policy.

I have been offered all monies I have paid in, plus interest calculated at 8% as directed by the FSA.

To me this is not compensation whatsoever. Compensation to me means being offered more, as a gesture of good faith.

I am going to write back and politly refuse this first offer, but I was wondering if this has happened to others here, and if so, what was the outcome.

Many thanks

You're right - its not compensation, its redress.

The idea is to address any financial loss you have made by having an unsuitable product.

As you never should have had this policy the company has indeed offered the correct methodology according the FSA and FOS guidance.

EDIT: Or alternatively what dunstoh said - but in a slightly less grumpy fashion

Incidently they should have offered interest at 15% between 1991 and 1993 and 8% thereafter...they probably have but its worth checking...

dunstonh

EDIT: Or alternatively what dunstoh said - but in a slightly less grumpy fashion

I'm keeping posts short and to the point in the mortgage/endowment forum this weekend. This one wasnt answered in a grumpy tone, unlike the others which were

To prove it wasnt grumpy, have a smiley - :xmassign: - bah humbug

dreamylittledream

dunstonh wrote:

I'm keeping posts short and to the point in the mortgage/endowment forum this weekend. This one wasnt answered in a grumpy tone, unlike the others which were

To prove it wasnt grumpy, have a smiley - :xmassign: - bah humbug

hehe

Please don't shatter my grumpy old man image!

paws17

I have discovered that the Financial Services Company that mis-sold me a Friends Provident endowment before the 1988 protection came in are no longer trading. The FSCS don't want to know because of the pre-88 date but have referred me to:

1- consider legal action (against who???)
2- contact Citizen's Advice Bureau
3- contact Financial Ombudsman

4 - I also wondered whether FP would be worth pursuing in this situation - and if so, on what basis?

Can anyone provide any hopeful advice for me or at least prioritise or narrow down the above 4 options on the basis of their own experiences or expertise?

cheers!

dunstonh

1- consider legal action (against who???)

If a limited company and they have ceased trading then you cant take them to court as they dont exist any more.

Even if you could take them to court, you have to prove it was mis-sold and thats a lot harder than the internal complaints proceedure where the advising company has to prove it wasnt mis-sold. This is why you dont see court action being mentioned all the time. Hardly anyone goes down that route because you have a very low chance of success and if you fail, you have to pay costs.

2- contact Citizen's Advice Bureau

They have more important things to worry about really. They cant help you. Although, being the CAB, they would try their hardest.

3- contact Financial Ombudsman

Who wont look at cases before they existed in 1988.

4 - I also wondered whether FP would be worth pursuing in this situation - and if so, on what basis?

FP just got an application in the post. They didnt provide you any advice and have no liability. The only time the insurer is responsible is when it is one of their tied salesforce that advised and sold the product.

Can anyone provide any hopeful advice for me or at least prioritise or narrow down the above 4 options on the basis of their own experiences or expertise?

option number 5: give up.

storri

Not accepting the first offer has just cost us over £4000!

In January 2006 my partner and i were offered just over £4000 by L&G as compensation for upheld complaints. We didn't accept this straight away because we were still disputing advice given to also cancel a previous endowment (and anyway, they said we had 6 months to act).

Four months later they also upheld our second complaint, offering an additional £2000.
But according to L&G our policy suddenly received a bonus in February of £6000 which effectively means that the new surrender value has risen so far that we now do not get ANY payout!!!

I know we should be pleased that the policy is suddenly starting to perform (and has apparently now done better than a repayment) but we have some concerns:

(a) the first 13 years of the policy the bonuses IN TOTAL were only about £7000 then suddenly in one month we get a bonus of another £6000 which wipes out the compensation payment we were originally due. A cynic might suggest that this has been done to avoid them having to pay anything out in 2006 and they will take the hit (if that's what it is) when the policy matures in 2015.

(b) if we had accepted the original offer in january we would have got the £4000 payout AND still got the £6000 bonus in february. Or would we....?

Has this sudden huge jump in bonuses happened to anyone else?
Or has anyone else lost their original offer by delaying acceptance?

Something smells fishy...

dunstonh

The stockmarket has has a significant recovery in the last 3 years and with L&G being one of the top 3 for financial strength, they can afford to increase bonuses again and this has been the same with the other stronger companies.

Had you accepted the first offer, you would have been better off but thats the risk you take. Had you had a weaker Standard Life endowment, it would have been the other way round.

This is why you have to be careful when you do not accept first offer.

vinno65

dunstonh wrote:

The stockmarket has has a significant recovery in the last 3 years and with L&G being one of the top 3 for financial strength, they can afford to increase bonuses again and this has been the same with the other stronger companies.

Had you accepted the first offer, you would have been better off but thats the risk you take. Had you had a weaker Standard Life endowment, it would have been the other way round.

This is why you have to be careful when you do not accept first offer.

Not quite true!

If he had accepted the first offer and surrendered his endowment and added the redress and payed a lump off (which is after all what you are supposed to do) he be no better off than if he accepts this offer. The surrender value is up so redress is down its not rocket science!

What ever offer he accepted he would still be in the position he would have been in had he taken the repayment mortgage he would have done had he not been miss-sold.

I am not one of these people who thinks it's right to complain of a miss-sale but then keep their endowment running. What would happen if it did hit maturity would people then pay the redress back? would firms demand it or take it off the final payout of the endowment.

Just to reiterate Storri if you surrender and add the redress amount to the surrender amount and use this to pay off a lump sum you'll be no worse off than a few years ago.

regards Vinno

dunstonh

What ever offer he accepted he would still be in the position he would have been in had he taken the repayment mortgage he would have done had he not been miss-sold.

You are correct that he would be put in the right position at the point of calculation. However, had he accepted the first figure, that would have been calculated before the 2005 bonus was increased and if the policy had been held on to after that point, he would now be in a positive position.

I am not one of these people who thinks it's right to complain of a miss-sale but then keep their endowment running. What would happen if it did hit maturity would people then pay the redress back? would firms demand it or take it off the final payout of the endowment.

I agree with you. I think if you complain that you shouldnt have been sold the policy, then it should be voided. A number of people who complained, say in 2002, would have got paid redress than those today and if the endowment was unit linked or with a stronger WP provider, they could go on to see a surplus at maturity and have got a payout in the interim.

To me the cleanest option would have been to say that all confirmed mis-sold endowments had a minimum maturity value added to them. It would also have allowed the insurance companies to budget for it over a number of years. Take into account recovering markets and stopped the compensation companies from getting involved.