i recieved a "bung" to buy an endowment mortgage

billymac05

whilst i was "sold" my endowment by a IFA before the cut off date of 29th April (TWO DAYS before) does the fact that the IFA offered me a bung of £200 IF i took an endowment mortgage, and only if i took an endowment mortgage not count for anything?The FOS, whilst being helpful, are of the opinion that the policy was done and dusted before the 29th (even if the policy didn't start until June 1988) and therfore cannot help me.many thanks if anyone can help me here!

dunstonh

does the fact that the IFA offered me a bung of £200 IF i took an endowment mortgage, and only if i took an endowment mortgage not count for anything?

Its not a bung. It is a commission rebate. FSA stats show that most IFAs rebate some commission on larger amounts.

The FOS, whilst being helpful, are of the opinion that the policy was done and dusted before the 29th (even if the policy didn't start until June 1988) and therfore cannot help me.many thanks if anyone can help me here!

Its the date you signed the application that matters. Not the date it commenced.

Your policy was sold in a period when the industry was unregulated and therefore no consumer protection existed. The FSA, FSA and FSCS protection do not apply to you.

billymac05

thanks for the quick reply!the "bung/comission" was NOT available to me had i taken any mortgage other than an endowment, and would not be given had i taken the endowment out with any company other than Alba Life.does this not count for anything?

homer_j_3

Sounds to me like you got what you deserved. I know that may sound a bit harsh but as stated above - it was an unregulated time where there were many more cowboys in the industry.

You saw an easy £200 and took it and by the way you have worded it, you knew at the time that it was a risk because if that £200 hadnt been offered you suggest that you would have gone on repayment. Karma has caught up with you and it has probably cost you more than £200.

As dunston has stated, you have not got a leg to stand on with this and if you haver a shortfall, I would probably concentrate now on how to rectify this rather than waste effort and time on trying to find technicalities to get the policy into the dates you can claim.

I know there were many missold policies before the point in which you can claim and it could have been genuinely missold here but coming on here trying to say that you were thrown a bung or suggesting that had you not been tempted by monetary reward, you would not have done it - I feel that this would suggest that you knew what you were getting into.

billymac05

"I know there were many missold policies before the point in which you can claim and it could have been genuinely missold here but coming on here trying to say that you were thrown a bung or suggesting that had you not been tempted by monetary reward, you would not have done it - I feel that this would suggest that you knew what you were getting into."well i think you're making a massive leap of judgement there - the endowment was almost pushed on me (money was tight!)..i was a pretty naive 23 year old, i certainly didn't think (or even know) that this particular route was so high risk.

dunstonh

thanks for the quick reply!the "bung/comission" was NOT available to me had i taken any mortgage other than an endowment, and would not be given had i taken the endowment out with any company other than Alba Life.does this not count for anything?

That is normal. The commission comes only from the endowment. Had you done a repayment mortgage then no commission is generated as the product wouldnt exist. You have to buy the product for them to be able to rebate some of the commission from it.

Commission rebates are totally acceptable and encouraged by the FSA as it lowers the costs to the consumer. Indeed, the proposed charging model under the FSAs retail distribution review (aiming for 2009 introduction) has customer agreed remuneration as the chosen method with commission allowed to offset against the fee and any surplus being rebated or used to lower charges.

i was a pretty naive 23 year old, i certainly didn't think (or even know) that this particular route was so high risk.

Its not so high risk. Its a risk but most endowments are returning to surplus or even if there is a small shortfall, people are still better off. You would have benefited from lower costs. Endowment mortgages were typically 5-10% cheaper per month than repayment mortgages - one of the most common reasons for doing an endowment that conveniently gets forgotten nowadays. Plus, you would have got a greater benefit out of MIRAS tax relief. This is why so many endowment complaints end up with little or no redress nowadays because people are not actually worse off unless they happen to have a really really poor endowment.