Need advice on missold endowment policy please

Cheryl1971

Hi, i am posting this on behalf of my mum and dad. They originally had a repayment mortgage with the Halifax but in 1989 they contacted the Halifax for a loan towards a new kitchen and the Halifax changed the mortgage over from replayment to endowment, this policy they claimed was the best for them. This was through Standard Life.This mortgage is due to be paid off in January 2014 and this endowment policy will not clear the balance as they were told. They realised a couple of years ago that there would be a shortfall and have been saving extra towards clearing it all off. They have since found out that the Halifax only sold Standard Life policies so therefore they feel that the halifax did not sell them the best policy to suit them as they claimed. The Halifax are now chasing them to make sure they are aware of the shortfall so my parents have now decided to see about claiming for a missold policy. Standard Life have written to them claiming that the cut off point for claiming missold endowment policies was 2006 and this is their final answer on the matter. Is this correct? Surely all this about missold policies has only come to light in the past few years? Should they carry on with the claim as in my (and theirs) view it was definitely missold!!

Any advice would be great, thank you very much for reading

Cheryl

opinions4u

They have since found out that the Halifax only sold Standard Life policies so therefore they feel that the halifax did not sell them the best policy to suit them as they claimed

They were required to sell the most appropriate product from the Standard Life range. Unless they claimed to be scouring the market, you won't achieve a mis-sale claim for this.

Halifax would have been breaking the law if they'd sold another company's policy.

Standard Life have written to them claiming that the cut off point for claiming missold endowment policies was 2006 and this is their final answer on the matter. Is this correct?

Yes. Because they sent out red warning letters long before this, so your parents were made aware of shortfall risk.

Two things to consider before continuing:

1) Does your Standard Life have a mortgage endowment promise linked to it that will cover some or all of the shortfall? Ask them.

2) Do your parents have shares from the demutualisation of Standard Life? If so, could these be sold to plug some of the shortfall?

dunstonh

They have since found out that the Halifax only sold Standard Life policies so therefore they feel that the halifax did not sell them the best policy to suit them as they claimed.

Halifax were tied agents of Standard Life. Halifax requirement in 1989 was to recommend the best Std Life product available to them. So, they did that based on what you have said.

The Halifax are now chasing them to make sure they are aware of the shortfall so my parents have now decided to see about claiming for a missold policy. Standard Life have written to them claiming that the cut off point for claiming missold endowment policies was 2006 and this is their final answer on the matter. Is this correct?

Yes. Your parents were written to at least three times making them aware of the high risk of shortfall and that if they felt they had reasons to complain about the sale of the policy they could do so before that date in 2006.

Surely all this about missold policies has only come to light in the past few years?

The endowment issue has generally being regarded as over for about 5-6 years now. It started around 2001. Got into full flight around 2003/4 and most policies were timebarred from complaint by 2007/8.

Should they carry on with the claim as in my (and theirs) view it was definitely missold!!

You havent mentioned why you think that but clearly your parents didnt think it was as they were told on a number of occasions after they were told it would likely fall short that they could complain if they thought it was mis-sold.

Any advice would be great

Nothing can be done. It is too late. On the plus side, Std Life endowments arent actually that bad and with their mortgage endowment promise value (MEP) and a history of slightly understating outcomes on example projections as well as the fact endowment mortgages were typically cheaper on a monthly basis than repayment mortgages, they may well end up financially better off even if there is a shortfall (e.g. a £20pm difference equates to £6000 over 25 years. £20pm was a lot 25 years ago)

holly_hobby

Yep, your parents had 3 yrs from the point of becoming aware the policy may not be appropriate (which is different to not permforming as anticipated), to complain to Standard Life (SL)- afterwhich it becomes time barred. This appears to have occured circa 2003 for Mum and Dad if SL have cited 2006 as the complaint cut off date (unless parents can prove exceptional circumstances, that directly prevented them from raising the issue within the 3 yr period noted).

Halifax were Appointed Representatives of Standard Life and this would have been discussed by the adviser, also dislcosed and detailed within the Initial Disclosure Document, provided to parents at the commencement of the interview by adviser, along with their own business card (showing them to be a SL Company Representative).

If this didn't happen (which I would think is highly unlikely), and your parents were told by the adviser/or led to believe, that the adviser had selected a Standard Life Low Cost Endowment, from a range of providers and products, than thats a different and separate aspect of the complaint.

Hope this helps

HOlly

Cheryl1971

Hi - thank you very much for your replies i have passed this information on and they have decided to leave it. Thanks anyway xx