Scot prov missold endowment dilemma

busy_b

A friend of a friend sold us an emdowment on our first property in 1993. It was for 30k at the time and was a With Profits policy with Scot Prov.

We moved property and took out a further endowment with another company. Both were miles off target to repay our mortgage and the second company paid us £2500 when we stated that it had been missold.

We then contacted the friend of a friend and explained our situation and he agreed that he had probably missold the first endowment as he had stated that it would definitely pay off our mortgage in 25 years time with cash to spare.

Although he agrees it was missold, he states he was independent and only sold the Scot Prov policies as they had advised him to sell them at the time. He has no paperwork that relates to our case and refuses to pay us any compensation as he believes it should be paid by Scot Prov, they state it should be him!

It is a difficult situation as we see him socially from time to time but I would be prepared to take the matter further if I knew we were actually due to compensation. (He is not short of funds and I think he is just seeing if we pursue the matter).

Does anyone know how we stand with this and if it is worth pursuing, how do we go about it? Thanks in advance.

EdInvestor

busy_b wrote: »

We then contacted the friend of a friend and explained our situation and he agreed that he had probably missold the first endowment as he had stated that it would definitely pay off our mortgage in 25 years time with cash to spare.

Although he agrees it was missold, he states he was independent and only sold the Scot Prov policies as they had advised him to sell them at the time. He has no paperwork that relates to our case and refuses to pay us any compensation as he believes it should be paid by Scot Prov, they state it should be him!

You have to make the complaint against the person who sold you the policy which Scot Prov confirms is him.So make the formal complaint to him in writing.Since he has no paperwork, he will not be able to defend the complaint, so he will have to pay you redress.If he rejects your complaint (routine with IFAS) take the matter immediately to the Ombudsman, within the 6 months window.

https://www.financial-ombudsman.org.uk

dunstonh

We then contacted the friend of a friend and explained our situation and he agreed that he had probably missold the first endowment as he had stated that it would definitely pay off our mortgage in 25 years time with cash to spare.

Although he agrees it was missold, he states he was independent and only sold the Scot Prov policies as they had advised him to sell them at the time. He has no paperwork that relates to our case and refuses to pay us any compensation as he believes it should be paid by Scot Prov, they state it should be him!

Who is this friend of a friend? You cannot just say "yes it was probably mis-sold but I think Scot Prov should pay". There is a regulatory process and this "friend of a friend" has just broken tons of rules.

If he is an IFA, then the complaint goes to him. If he refuses, you then go to the FOS. He sounds like a right idiot to be honest. You may want to refer the case to the FSA on the basis that he isnt dealing with your complaint in the appropriate manner. FSA wont look at your complaint but they will be interested in advisers not following the rules.

If he was foolish enough to destroy all his records, then he is going to have a hard job proving advice was good. Only potential negative is that Scot Prov may have time barred you.

busy_b

He is now an Accountant but worked independently in the early 90's and as we were self employed back then, he arranged our mortgage and endowment as we had only been in business a short time.

We first approached Scot Prov about 2 years ago and since then he has been fobbing us off but we have never pursued the matter as he is a close friend of our friends and we see him regularly so it could cause a rift.

Does anyone know how long you get to raise a complaint and how do they calculate the timescale. I am past caring about the rift and problems, especially if we are talking thousands of pounds worth of compensation.

Thanks for any replies.

dunstonh

He is now an Accountant but worked independently in the early 90's and as we were self employed back then, he arranged our mortgage and endowment as we had only been in business a short time.

He cannot shirk his responsibilities unless he was under certain regulatory bodies at the time. i.e. He was authorised by FIMBRA but ceased offering investment advice and became an account before the 1994 cut off. If that case, it was pre-regulation. If he was PIA authorised or went on to become PIA authorised then he carries the liability to this day.

Does anyone know how long you get to raise a complaint and how do they calculate the timescale. I am past caring about the rift and problems, especially if we are talking thousands of pounds worth of compensation.

3 years from the first notification of high risk of shortfall. Most have gone past that now.

For those able to claim and get paid redress, the amounts being paid at present are "in general" quite small. Often less than a £1000. Many are not getting a penny because the recovery in the markets has helped improve the situation. However, a Scot Prov endowment in with profits is not that good and I would guess that it wouldnt be one of those that has recovered well.

busy_b

The Endowment was for £30000 and taken out in 1993 over 25 years. What compensation could we expect? (The 2nd endowment we had was for £20,000 and we were paid out £2500, approximately 4 years ago in compensation from another company.)

How is it calculated and would it be taken from say today or when we first made the complaint?

EdInvestor

The compensation is based on putting you back into the position you would be in if you had taken out a repayment mortgage.The calculation starts from the beginning.

I suggest you write a formal letter of complaint about the sale.If he rejects the complaint (most IFas do this routinely) , then take it straight on to the Ombudsman (deadline is 6 months after the rejection).

https://www.financial-ombudsman.org.uk

dunstonh

I would check his status first. If he was FIMBRA authorised (rather than PIA) and he ceased before 1994, then there is no complaint proceedure for you. That would certainly suggest why he hasnt kept any docs as there wouldnt be a need to. The minute you move into PIA (now FSA) era, document storage becomes vital.

busy_b

FIMBRA, IFA, haven't got a clue, sorry, I just know he's pushed his luck and thinks we're not going to pursue it.

Incidently, we changed to a repayment mortgage some years ago now due to the shortfalls and have since got to the stage that we're about to pay off or offset all of our mortgage. Would this have any effect on the outcome? (I wouldn't have thought so but as I've said I've not really looked into Endowment misselling until recently).

EdInvestor

busy_b wrote: »

Incidently, we changed to a repayment mortgage some years ago now due to the shortfalls and have since got to the stage that we're about to pay off or offset all of our mortgage. Would this have any effect on the outcome?

Your loss would be calculated up to the point that you paid off the mortgage.

dunstonh

I only asked the authorisation company as you said earlier you didn't want to pursue it if there was no point as you see him socially. A lot of accountants were FIMBRA not PIA and if they ceased being authorised before a date in 1994 and did not go on to be PIA authorised (which is now FSA) then there is no consumer protection.