Ombudsman decision final?

Teak

Is it possible to make another complaint about an Endownment policy due to changed financial circumstances, even after the financial Ombudsman has made a decision a few years ago?



My parents took out 2 endownment policies back in the 80/90s I think, one for the mortgage (and expected it to pay it off fully) and the other policy for retirement (ie long holiday, etc). A few years back they got a letter saying the mortgage policy would have a short-fall, so they complained. I'm not exactly sure what reasons they cited, but I assume it was along the lines of they were lead to believe it would fully pay off the mortgage, plus it was unsuitable anyhow as the mortgage policy matures AFTER retirement. Which my parents feel they wouldn't knowingly agree to.

A few years ago it ended up at the Ombudsman. I'm not sure how well they worded the complaint, but the decisions given was that even though there was a short-fall, their 2nd policy would cover it and so they would be fine finanically and no compensation is needed. However, my parents were not happy with the Ombudsman's decision. That the fact they can afford to cover the short-fall currently is not the issue and also feel the policy wasn't right for them due to maturing AFTER retirement.

I do wonder if my parents made the mistake of wording it more about the short-fall (but without being able to prove they were lead to believe it would pay off the mortgage) rather than the unsuitability of the policy. Though I think it might of been argued by the company or Ombudsman that again the 2nd policy will mean they'll financially be able to pay the mortgage policy premiums (and mortgage payments?) into retirement. But again, my parents argue the 2nd policy was not done for that purpose in mind at the time and will leave them very little leftover for retirement. So their current financial position is being unfairly taken into account with hindsight.

Anyhow, it now seems the 2nd policy might not cover them into retirement. Not exactly sure why, maybe the short-fall has got bigger. This could potentially lead to my parents having to sell their house to afford retirement. Since the Ombudsman's decision was based on the assumption it would cover them, my parents feel the circumstances have changed and would like to complain again. But is that possible?

Scott

If the customer chooses not to accept the decision of the Ombudsman, they have a right to take the matter to litigation.

Teak

Sounds expensive. Is that the only option?

Think they were hoping they could just make another complaint to the Ombudsman. On the principle that the original decision was based on financial assumptions, which after a couple of years are now in question due to changing circumstances.

Scott

There is no appeals process with the Financial Ombudsman Service. The Council of Mortgage Lenders gave this reason:

Q8 If the wider implications process is improved, as proposed in Chapters 3 and 4, is an appeal mechanism needed? If so, why? Has anything relevant changed since FSMA was passed? Is the problem simply that firms do not like some case outcomes? If not, what specific problems would an appeal mechanism solve?

We do not believe that an appeals process is desirable. There is a danger that an appeals process would reduce confidence in the FOS and would make the process far more legalistic. We would rather there were a process in place to ensure that the Ombudsman makes the right decision based on all relevant information than argue for a process to challenge decisions after they have been made. We therefore strongly support the argument for improving the wider implications process along the lines of the option described in paragraph 4.8 of the consultation paper.

Unless you put it in such a way that you were complaining about another topic, then it seems that litigation is your only route.

I am unsure of the process of doing so, but you should certainly take professional legal advice before any such undertaking.

Sorry not to be the bringer of good news.

You may have some success renegotiating with the company themselves, but your recourse to the FSA is pretty much closed.

defender_of_the_weak

I am pretty much with Scott in the reading of the situation. The only recourse in challenging a riuling from the Ombudsman office is if they have never formally accepted the judgement and ther eis something fundamentally flawed in the ruling to challenge. Given the passage of time it is unlikely to be re-opened.

Scott, if you work for RBS why do they fight so hard to turn down endowment claims, or is that not your deprtment

Conrad

Teak wrote:

Is it possible to make another complaint about an Endownment policy due to changed financial circumstances, even after the financial Ombudsman has made a decision a few years ago?



My parents took out 2 endownment policies back in the 80/90s I think, one for the mortgage (and expected it to pay it off fully) and the other policy for retirement (ie long holiday, etc). A few years back they got a letter saying the mortgage policy would have a short-fall, so they complained. I'm not exactly sure what reasons they cited, but I assume it was along the lines of they were lead to believe it would fully pay off the mortgage, plus it was unsuitable anyhow as the mortgage policy matures AFTER retirement. Which my parents feel they wouldn't knowingly agree to.

A few years ago it ended up at the Ombudsman. I'm not sure how well they worded the complaint, but the decisions given was that even though there was a short-fall, their 2nd policy would cover it and so they would be fine finanically and no compensation is needed. However, my parents were not happy with the Ombudsman's decision. That the fact they can afford to cover the short-fall currently is not the issue and also feel the policy wasn't right for them due to maturing AFTER retirement.

I do wonder if my parents made the mistake of wording it more about the short-fall (but without being able to prove they were lead to believe it would pay off the mortgage) rather than the unsuitability of the policy. Though I think it might of been argued by the company or Ombudsman that again the 2nd policy will mean they'll financially be able to pay the mortgage policy premiums (and mortgage payments?) into retirement. But again, my parents argue the 2nd policy was not done for that purpose in mind at the time and will leave them very little leftover for retirement. So their current financial position is being unfairly taken into account with hindsight.

Anyhow, it now seems the 2nd policy might not cover them into retirement. Not exactly sure why, maybe the short-fall has got bigger. This could potentially lead to my parents having to sell their house to afford retirement. Since the Ombudsman's decision was based on the assumption it would cover them, my parents feel the circumstances have changed and would like to complain again. But is that possible?

Teak, as a mortgage broker I have helped people win thier case. The claimants best chance is to stick to the retirement argument.

Argue that stress is bieng caused to frail people.

ASK TO SEE A COPY OF DOCUMENTATION GATHERED BY THE ORIGINAL ADVISER THAT LEAD HIM TO BELEIVE THE POLICY AND MORTGAGE WAS AFFORDABLE IN RETIREMENT. I bet they wont have any. Also ask to see a copy of the FACT - FIND. Double check signatures are your parents - I have seen cases of forged signatures.

Go through the FSA (if the insurers dont award compensation) and I wouldnt mention the previous complaint at all. This is a new and focused complaint and remember the FSA is now far harder on mis - selling and rules have changed.

Write to the providers compliance department first and use recorded delivery. Deal only with one person - the senior compliance officer.

Keep it simple. Use bullet points and dont go - off at tangents.

Dont get involved with the second policy as part of this case, however, you might want to also do a second claim re the savings plan. You will win if it can be shown there were MORE SUITABLE savings options available to the advice givers, for example products with far far lower charges and no life cover deductions, such as National Savings, possibly Pensions (that enjoy Tax advantages over and above savings policies). Focus on the commision paid and outcomes delivered.

RISK PROFILE - In both cases in may be worth requesting the insurer to provide empiricle evidence that lead them believe your parents had suitable risk profiles. Such real evidence might be that they already held shares. If it cant be shown that SUFFICIENT STEPS were taken to identify the true risk profile, you ight also have grounds there.

Im sure they will win.

Teak

Many thanks for the suggestions.