Mortgage Endowment - Help

Easter_Road

Hi, Hope someone can help me as there is lots of useful advice but none that seems to fit my circumstances.

I took out a mortgage endowment policy in 1991 even though I didn't have a mortagage. The man from the Co-op used to visit my mum every week and told me this would mean I was paying of my mortgage before I even had a house.

I've just recently found out about reclaiming and the Co-op has advised that 'The evidence available to me demonstartes the policy was not used for mortgage purposes and therefore must be regarded as an unsuitable product'. - this is true as by the time I bought a house the policy was underperforming so it was never used in connection with a mortgage.

I expected the CIS to offer me compensation and to keep paying the policy for the remaining 9 years but they haven't, they have said the will cancel the policy and refund my premiums and interest (no compensation).

I don't want to appear greedy but I didn't expect this. Is this the norm?

Can anyone offer advice? Is it worthwhile complaining to the FOS?

Thanks for reading this and I really would appreciate your help and advice.

dunstonh

I don't want to appear greedy but I didn't expect this. Is this the norm?

It is the norm.

You have complained that you believe the policy should never have been sold to you. CIS have agreed and are now voiding the policy in accordance with your complaint. They are returning your premiums plus interest which is in accordance with the correct rules on a voided policy.

Is it worthwhile complaining to the FOS?

No it isnt. The complaint was upheld and the CIS are using the correct redress method.

Easter_Road

Thanks for the advice. I didn't really think I was asking for it to be cancelled. I was just complaing that I was promised it would be paying off my mortgage (even though I didn't have one), and the lump sum I was promised was incorrect.

I thought (hoped) that they would make up the projected difference like everyone else seems to be getting.

Thanks again.

silvercar

I thought (hoped) that they would make up the projected difference like everyone else seems to be getting.

They are not, people are being put back in the position they would have been had they taken a repayment mortgage in the first case. They are not being given the difference between what the endowment is now expected to yield and the total mortgage amount.

You now have two options, accept the offer or keep the endowment policy. If you keep the policy you could surrender it, sell it (if it is one that can be sold) or make it paid up by keeping it on but not paying future premiums.

Whatever you decide, check that you do not need (or replace) the life cover first.

dunstonh

I thought (hoped) that they would make up the projected difference like everyone else seems to be getting.

No-one is getting their projected difference paid out.

That isnt the way people with mortgages get redress with upheld complaints. Usually the redress is much smaller than the shortfall or even results in no redress even if there is a shortfall projection.

With them, they are put back into the financial position that they would have been in had they taken out a repayment mortgage.

Projections are just examples and have flaws with some plans. Many endowments that have had shortfall projections even up to 3 months before maturity have gone on to provide surpluses. You also need to remember that projections assume consistent returns and that doesnt happen in reality. It is impossible to pay redress based on a projection which in reality is highly flawed.

Easter_Road

Thanks Silvercar /Dunstonh

To be honest I just assumed because the guy promised an amount that's what I would get. It has been coming of my bank account for years and I've never given it much thought (stupid I know)

It was still registered at my mums address so I didn't even get the mail updates as she just bins everything because I left home years ago. I'm not really sure how much it's worth if I surrender / sell it now but assume it will be less than the CIS offered (although I will check that out first).

Thanks again for you advice.