Endowment Mis-selling - Don't give up!

dunstonh

as an IFA you may have kept good records but you know and I know that for whatever reason the major banks and life companies haven't.

Absolutely. At a recent meeting on compliance issues with other IFAs, the most common reasons for a complaint being upheld was insufficient or missing documentation. Not actual proven miss-sales (which only accounted for 2.5% of complaints). Over 22% was down to documentation.

In the past, companies considered the files as an inconvenience. Many must be kicking themselves for the way they treated the files. You could call that poetic justice in a way.

As to court, the judiciary I'm sure are aware of the miss-selling scandal and I offered in court the evidence of surveys conducted by the FSA Consumers Association etc showing that over 50% of people sold endowments were told verbally that their mortgage would definitely be paid off.

Even if you rely on those stats, which are very subjective, it means that almost half were not told verbally. Its not a high enough ratio to ensure a safe assumption. Plus, the consumers association are not exactly a reliable source of information with endowments. After all, you only have to go back to the time that they themselves were recommending them. They do have a tendency to go with whatever sells the magazine even if it does mean re-writing their history.

In your case, I believe you won because the FP letter just wasn't satisfactory. There wasn't the issues of my word vs theirs. It appears to be more a case of this is what FP issued and its not good enough. Whilst the judge did accept what you said, it appears that FP's documentation was not satisfactory. Your case was a different type of case though because of the time bar side.

I reckon that cases written after 1995(ish) got stronger on compliance and the later you go, the harder any case would be to prove in a court of law. A late 80's, early 90's case could actually be quite easy. After the mid 90s, I think you are more reliant on individual advisers making mistakes and not wholesale failures on the processes used (although some exceptions do seem to exist). I cant recall the date but it must have been around 95-96 that the projections were reduced to 4,6 & 8% on illustrations. With most endowments, the 4% figure would have shown a shortfall. That's when a court case would get harder as the illustration is issued prior to sale.

vinno65

dunstonh wrote:

Absolutely. At a recent meeting on compliance issues with other IFAs, the most common reasons for a complaint being upheld was insufficient or missing documentation. Not actual proven miss-sales (which only accounted for 2.5% of complaints). Over 22% was down to documentation.

Again I refer to previous posts. Missing or insufficient documentation? In my case there would have been no documentation! Also 22% on docs what were the vast majority of upheld complaints upheld for?

dunstonh wrote:

In your case, I believe you won because the FP letter just wasn't satisfactory. There wasn't the issues of my word vs theirs. It appears to be more a case of this is what FP issued and its not good enough. Whilst the judge did accept what you said, it appears that FP's documentation was not satisfactory. Your case was a different type of case though because of the time bar side.

Putting the letter aside I had to prove that the only reason I had for taking a 25 year endowment to pay off a mortgage after 22 years is because thats what i was advised to do. FP argued it was done for affordability. Neither of us had documentary evidence to back our claims but the judge believed me.

regards Vinno

dunstonh

Also 22% on docs what were the vast majority of upheld complaints upheld for?

Just under 25% of claims were being upheld. 2.5% were classed as proven miss-sales with 22% being due to poor or missing documentation. 75% were rejected as not being mis-sold.

Putting the letter aside I had to prove that the only reason I had for taking a 25 year endowment to pay off a mortgage after 22 years is because thats what i was advised to do. FP argued it was done for affordability. Neither of us had documentary evidence to back our claims but the judge believed me.

I think the key thing there is that the product doesnt match your goals. So the onus is on the adviser to state why a product was recommended which doesnt match and they failed to do document and prove why. Had the term matched the mortgage, it may have been a different.

vinno65

dunstonh wrote:

I think the key thing there is that the product doesnt match your goals. So the onus is on the adviser to state why a product was recommended which doesnt match and they failed to do document and prove why. Had the term matched the mortgage, it may have been a different.

No the key thing here is that we both offered verbal evidence and the judge decided on the balance of probabilities it was me telling the truth.

This goes completely against your advice that it would be difficult to prove a miss-sale in court without documentary evidence.

If you went to court and told a judge that at the point of sale you were told verbally that your endowment would definately pay off the mortgage and the opposition says "well none of our documentation says this" it would still be up to the judge to make a decision on the balance of probabilitiies. Just because the documentation doesn't mention guarantees doesn't mean that it wasn't offered verbally! As I said before I am sure the judges are aware of the sharp practice that went on in the selling of endowments there's been an all party house of commons investigation for god's sake. Even John Tiner in his letter to Ceo's in 2002 recognised that verbal evidence is good and significant evidence and shouldn't be dismissed but firms and the FOS are.

Unfortunately for you being an IFA you have been lumped in with all the dodgy salesmen we know about, think estate agents and double glazing and you'll get the picture!

It's my belief that if people started going to court the uphold rate may well be a lot highr than it is now

regards Vinno

reggie

I wonder if anyone can advise - we have a few endowments, in the process of 'complaining' about them; one has been upheld. The one we're not sure about pursuing is probably the one that was most deliberately missold. We were sold it by an IFA in 1995, endowments were starting to get bad press and we were a bit wary and mentioned the option of switching to a repayment mortgage as endowments were being seen as not such a good choice - he said endowments would still be the best way forward and highlighted the 11% growth figure on the projection sheet. He got us to sign the various pieces of paper saying we understood everything - he dismissed any idea of risk and so went on to sell us a Friends Provident policy to mature in 2012 - running for 17 years.
Bearing in mind it would be his word against ours, is it worth chasingor is it a lost cause? Also how likely was it that this policy was going to be effective with only 17 years to run, costing us nearly £80pm? Thanks for any advice.

dunstonh

Bearing in mind it would be his word against ours, is it worth chasingor is it a lost cause? Also how likely was it that this policy was going to be effective with only 17 years to run, costing us nearly £80pm? Thanks for any advice.

It wont be just his word against yours. Providing the documentation is held, it will be documentary evidence plus what you did and didnt say to each other.

If you are lucky, the documentation will be poor and wont mention anything about risk and the chance the mortgage would not be paid off, or even if there is any documentation which may have been lost. However, if the documentation clearly states that there is a risk of falling short etc, then you wont have a strong case. You need to look at the documentation and see how strong that is.

W_s_n

Great news. I complained with the letter generated via the link to the Which Website, and the complaint has been upheld!

This was against Winterthur, and I have been awarded £6,660.00!
:beer:
Many thanks to Martin. What would we do without him?

Cheers
W_s_n :rotfl:

reggie

dunstonh wrote:

It wont be just his word against yours. Providing the documentation is held, it will be documentary evidence plus what you did and didnt say to each other.

If you are lucky, the documentation will be poor and wont mention anything about risk and the chance the mortgage would not be paid off, or even if there is any documentation which may have been lost. However, if the documentation clearly states that there is a risk of falling short etc, then you wont have a strong case. You need to look at the documentation and see how strong that is.

I do remember us signing forms saying we understood everything, so I think he's got his back covered. I do also know that he dismissed the idea of a repayment mortgage and dismissed all our fears on endowments as unfounded - I'm sure he would argue we were made 'aware' of the risks, but verbally those risks were ridiculed. It's not looking good is it?

vinno65

reggie wrote:

I do remember us signing forms saying we understood everything, so I think he's got his back covered. I do also know that he dismissed the idea of a repayment mortgage and dismissed all our fears on endowments as unfounded - I'm sure he would argue we were made 'aware' of the risks, but verbally those risks were ridiculed. It's not looking good is it?

Hi Reggie,
Looks like you've been had by another dodgy IFA, telling you one thing but getting you to sign anyway, you'll probably be ridiculed on here for signing the forms even though aware of the risks but then don't conmen love to blame their victims for their own gullibilty. Morals obviously have nothing to do with it.

If I were you I would still complain. Remember it's up to him to prove the sale was compliant. If he has retained the documents then at least you will get to see exactly what it is you have signed.

Dunston no comment on your collegues hard sell??

regards Vinno

dunstonh

Dunston no comment on your collegues hard sell??

I wasn't present at the meeting so cant comment on what was said. Standards 11 years ago are not what they are today so its quite possible.

Harold Shipman was a murderer. Its a good job he wasnt a financial adviser otherwise we would all be branded murderers. :rolleyes: