Mis-sold mortgage complaint - over 6 years ago

walletmoths

Hello everyone.

I've recently got the ombudsman to look into a mis-sold mortgage that I had back in 1996. It turns out though, that they can't investigate the complaint because I didn't complain within 6 years of taking the mortgage out - unless there are extreme circumstances as to why I didn't complain. The thing is, the only reason for not complaining after all this time is because I didn't know I could. Stupid I know, but it's the honest truth.

Obviously, that's not good enough, and unless I come up with a better 'excuse' my complaint won't be looked into. I was just wondering if this sort of thing has happened to anyone else and what you did about it?

I'm afraid at the moment, it's looking like we've been 'done' and there's nothing we can do about it

The mortgage sold to us as first-time-buyers was pension linked, which at the time was only suitable for the self employed. It wasn't until we moved house 5 years later that we discovered we hadn't paid a penny off it. 5 years of payments and a lot of wasted money. None of it even went into the pension either.

Thrugelmir

Whose responsibility was it to set up pension plans as the repayment vehicles? Interest only mortgages can be repaid by a variety of means not exclusively pension. 

davidmcn

walletmoths said:

It wasn't until we moved house 5 years later that we discovered we hadn't paid a penny off it.

You never received any statements? What do you mean by "wasted money"? If you were paying interest, you would have had to pay that anyway.

walletmoths

That's true, we would have had to pay interest (which was around 7% in 1996) - but at the time, we were under the impression that we were also paying off the capital, and the company rep 100% assured us that this was the case. But, as I recall, there were never any statements, not until we decided to move house. (The firm also ripped us off with several other things, and most members of the family too). They were called Abbey Life. It was their rep who advised us that the only way we'd get our first mortgage was to have it pension-linked with them. We were truly naive at the time, and believed every word he said unfortunatley.

davidmcn

walletmoths said:

That's true, we would have had to pay interest (which was around 7% in 1996) - but at the time, we were under the impression that we were also paying off the capital, and the company rep 100% assured us that this was the case.

Ok, but if your argument is that you should have been sold a repayment mortgage instead, that would have increased your monthly payments - so you saved that money over the term of the mortgage. Yes, it should have gone towards a repayment vehicle, but you still had the money, and did whatever you did with it instead.

And anyway, even if it took you until 2001 to realise things were amiss, that was 19 years ago. You're way out of time to do anything about it.

dunstonh

Obviously, that's not good enough, and unless I come up with a better 'excuse' my complaint won't be looked into. I was just wondering if this sort of thing has happened to anyone else and what you did about it?

You need to justify the whole period of the delay.  You won't be able to.

The mortgage sold to us as first-time-buyers was pension linked, which at the time was only suitable for the self employed. It wasn't until we moved house 5 years later that we discovered we hadn't paid a penny off it. 5 years of payments and a lot of wasted money. None of it even went into the pension either.

A pension mortgage would have seen a pension set up with payments going to the pension provider and a mortgage set up where only the interest is being paid (so the balance remains the same).   You wouldnt have paid anything off it and that is usual.    However, the balance on the pension would have gone up.  So, what happened to the pension?

And this does pretty much confirm that the timebar is valid as you became aware of the issue around 2001 but decided not to complain.  You had until around 2004 to raise a complaint.

We were truly naive at the time, and believed every word he said unfortunatley.

So, what happened to this pension?  

Thrugelmir

walletmoths said:

 It was their rep who advised us that the only way we'd get our first mortgage was to have it pension-linked with them. We were truly naive at the time, and believed every word he said unfortunatley.

What happened to the money invested into the pension plans? 

LABMAN

What happened to the value of the house in the five years? Did it increase?

walletmoths

Well, the pension linked to the mortgage was just my partners. I was sold a pension too at the same time, but neither of us realised that the mortgage was only linked to one of us. Not far into the mortgage, we had to stop contributions to the pension because they were set so high (I seem to remember £200+ per month), and we'd got several policies sold to us at the same time - that within a few months of moving into our home we were really struggling to pay everything. In fact, that's the first time we got into debt. Not to mention the Abbey Life advisor who stung us for a cheque for £500 - for his fee - just one week after moving in. 

Anyway, with not paying into my partners pension, it obviously didn't grow, and with the extortionate charges on the pension, the pot actually shrank over time - even when we got to a point where we could put money into our pensions again a couple of years later.

About a year ago, we transferred our Abbey Life pensions (now called Phoenix Life) into pensions with a better deal. I think, after all these years, my partner had about £20k in the pension - which we know could have been far higher had we done our homework at the time and not got suckered-in to the deals we were sold by Abbey Life.

But hey. You live and learn - and we certainly have done, even if it has been the hard way

[Deleted User]

walletmoths said:

 Not far into the mortgage, we had to stop contributions to the pension because they were set so high 

It sounds as if you've actually been lucky.  If you'd had a repayment mortgage you wouldn't have been able to reduce the payments and you'd have had to sell or be repossessed.

haras_n0sirrah

The other issue is that they sold you a repayment vehicle to go with the mortgage but you chose to stop paying into it. Had you continued to do so it may have done better than the repayment mortgage.
Things were very different back then