Mis-sold endowments

Cacran

In 1986 we were mis-sold an endowment policy. A couple of years after we realised the problem and contacted the bank who looked into it, agreed that it had been mis-sold but said that if we wanted to take them to court it would be costly for us. As I had a new baby, I couldn't face the expense or the upset so we just left it alone. I was very annoyed as we had put in writing the type of endowment we required, they quoted and it was such a good deal, we took it out. In fact it was not a good deal as it was a much inferior product to the one we thought we were getting.Is it too late to do anything about it now? The policy as long since matured.

dunstonh

In 1986 we were mis-sold an endowment policy. A couple of years after we realised the problem and contacted the bank who looked into it, agreed that it had been mis-sold but said that if we wanted to take them to court it would be costly for us.

Financial services regulation didnt start until 1988. You say you complained a couple of years later but the response suggests it was before regulation. If it was post regulation, the response from the bank would have been very different. Banks volunteered to consider pre-regulation sales as did some building societies but only on things they personally arranged (not the plans put in place by local brokers/agents who may well have used their branches).

However, I do question your dates a bit. In the 80s, no endowment had ever failed to hit target. That didnt happen until 1999-2001. Raising a complaint about endowments in the 80s was virtually unheard of. So, are you sure of your dates?

I was very annoyed as we had put in writing the type of endowment we required, they quoted and it was such a good deal, we took it out.

Was it a bank or building society. The building society act of 1986 and polarisations that started in 1988 meant that building societies that used local agents/brokers previously, moved to tied provision with insurers around 1986. Banks rarely did mortgages in 1986 as they were not allowed to compete with building societies and had heavy restrictions on what they could lend. So, was it a building society?

If so, and with it being 1986, you would likely have not had any input into the type of product the building society had available. It was either their product or you visited the local broker and got them to do it. IFAs didnt exist until 1988. But many brokers became IFAs.

What was the superior product that you thought you should have had?

Is it too late to do anything about it now? The policy as long since matured.

Yes. You are long timebarred. And that assumes it fell within the regulatory period which it doesnt sound like it did.

Cacran

It was 1988 that I reported this as my son was born in that year and I was so busy that I was reluctant to cause myself any bother.
Halifax, I am pretty sure, was a building society at that time. We took the mortgage and the policy out at a Halifax Branch in the city. It was not a broker or anything.
I used to work at an Insurance company and at the time took out our first mortgage it was a FULL endowment. It was one where the sum assured did not decrease over the 25 years our mortgage was for. We moved to this house in 1986. I still had a part time agency with the company I worked for getting commision from them for premiums paid through my agency,for those policies which I had procured and policies in my name got staff rates for premiums. I wanted another FULL endowment for 15 years. The sum assured to be £10,000. I got a quote for premiums and it looked a good deal, with getting staff rates. We were going to get the mortgage through that company.
As we saved with Halifax my husband wanted to get a quote from them to compare the deals.

I wrote a letter to them saying I wanted a FULL endowment not a LOW COST one which had just started to become popular. They were cheaper but the sum Assured decreased over time, I made it clear I did not want this type.

The premium they quoted was better than the one I could get using staff rates. It seemed that we would be better off using the Halifax for the policy and the mortgage. We went ahead.

I happened to notice on a statement, that the policy number included the letters LC. I got in touch with the Halifax and asked them what it stood for. I had my suspicions that it could have stood for LOW COST.
The answer was that we had indeed got a LOW COST mortgage. I told them that I had specifically asked for a FULL endowment, in writing. They looked back into my documents and the letter was there. They agreed I was correct and a manager visitied us at our house. This was when he said that it was a good deal and the only thing we could do was go down the court route or they would give us all the premiums back and do a new deal. I said that if we did a new deal, we were both two years older so premiums would be more, and the term of the policy would then take us two years further on. I also said that at this point in time, because the company I worked for no longer let part time agents procure new policies or get staff rates. My agency had closed. I was unable to go back to the quote they gave me to compare the two.

We were very annoyed by this mis-sold policy but the route of going to court would be expensive and totally out of our comfort zone.

Reluctantly we chose to leave matters as they were.

At that point there was no recourse with companies as there is today. I was wondering if we could do anything about it.

dunstonh

Was the endowment Halifax arranged with Standard Life or someone else?

I suspect you fall foul of the 3 & 6 year rule if it does come under FCA regulation. You have 6 years from inception or 3 years from being reasonably aware of an issue to raise a complaint (whichever is the longer). You are way past both of those.

And if it doesn't fall under regulation then they dont have to consider it anyway.

Bermonia

As dunst says, long overdue... the time to complain has long been and gone I am afraid.

Look on the bright side, even if you could complain, there would be no evidence to support you after all this time so would be a fruitless and time consuming endeavour.

Cacran

I had accepted this outcome but just saw something that made me think there might be a chance we could claim.
Thank you both for taking time to answer my question.