Think You Were Missold Your Endowment Complain Now!!!! [CLOSED]

mike_the_bike_2

I was flogged an endowement by Shabby National in 1986 and last year even though they rejected by complaint it was later overuled by the Ombudsman and I received compensation as they had "failed under duty of care" to flog me the correct product...At the time I was 23 single first time buyer...and TRUSTED FINANCIAL INSTITUTIONS! (how things change )

Djandyy

I have had my clain upheld by the HAlifax . They are now asking me how I would like my compensation calculated . The options are

"1. We can calculate your compensation using your specific mortgage history . Given the complexity, this calculation wil ltake longer than that described in option 2 "

"2. We can calculate compensation usign your endowment policy details , together with assumptions about your mortgage . The use of assumptions means compensation may be lower or higher than if we used specific details . You do not need to give us any further information underthis option , and we can perform the calculation quickly"

Sounds to me like they want me to use option 2 , which i guess is probarbly best for them and worst for me . But maybe Im just too wary . Any advice greatly appreciated .

My e-mail is easymototours@brinternet.com if anyone doesnt want to post on here.

Thankyou .

Andy

Djandyy

PS . Thanks for the use of this great site .

dunstonh

Sounds to me like they want me to use option 2 , which i guess is probarbly best for them and worst for me . But maybe Im just too wary . Any advice greatly appreciated .

No. They are correctly giving you the choice they are required to make. Many people cannot provide or are not willing to spend the time to obtain the information that option 1 requires. Hence, why option 2 is available.

desiman

Hi,

Wonder if I can get some advice on my parents endowment problems.

Dad bought an endowment in 1989 from an IFA/his solicitor. The shortfall was 6,000 or so. He kept getting letters saying up the payments or they'll be a shortfall etc etc. He kept upping payments and subsequently the endowment was all paid off, obviously with this 6,000 extra. Late last year we sat down and had a chat and established that he was mis-sold this endowment (The IFA told him not only will the endowment cover the loan but also give him a bit extra in his retirement yrs!)

Anyway, we complained using the Which templates to the Financial Ombudsman Service. As it happens, the IFA concerned is kind of no longer in business as it was in 1989. When I say kind of, the firm in 1989 was called (eg.) AB & C IFA's, and now are called A & C IFA's.

We were referred to the Law Society, as the financial ombudsman said that since they were an IFA, we had to pursue it with the Law Society.

So we got in touch with the Law Society, who in turn said that they only started regulating IFA's since 1991, so in effect they have no control over what they mis-sold in 1989. In the letter, it also mentions that unless there is a 'successor practise', there probably isnt any grounds for compensation, though we could try and pursue it as a negligence claim.

Does anyone have any info on what classes as a successor practise? If a guy is running his business with only One partner, rather than 2 (as he was in 1989) surely thats a successor practise. Also they are still operating out of the same address. Anyway we got someone to go to the place and get a business card, and we sent this in the letter of reply to Law Society, to demonstrate that the IFA is still operating out of the same address. We havent had a reply from the Law Society (its been months..!) but we arent hopeful because even if they are a successor practise, the endowment was sold before the 1991 regulations.

We also tried to pursue the negligent aspect of this. The endowment came tied with home insurance and our premium included legal expenses. We are now trying to make a compensation claim using the legal team of the home insurance team, although, not holding our breath.

All said & done, my dad has now paid off the endowment but it was a big struggle for him to pay off an extra 6,000 along with bringing 5 of us up, so if there is any advice anyone has, I'd be very interested.

Thanks for reading

dunstonh

so if there is any advice anyone has, I'd be very interested.

Your post is a bit hard to follow as it contains information that conflicts with other bits.

So we got in touch with the Law Society, who in turn said that they only started regulating IFA's since 1991

The Law Society have never regulated IFAs and still do not. They only regulated SIFAs. This may seem like nit picking but its very important to find out what class of advisor that you saw. The complaints proceedure you follow would depend on that.

We were referred to the Law Society, as the financial ombudsman said that since they were an IFA, we had to pursue it with the Law Society.

Slight contradication there. The FOS wouldn't refer you to the Law Society if they were an IFA firm. Only if they were an SIFA firm. We have to assume the latter then.

Also they are still operating out of the same address. Anyway we got someone to go to the place and get a business card, and we sent this in the letter of reply to Law Society, to demonstrate that the IFA is still operating out of the same address. We havent had a reply from the Law Society (its been months..!) but we arent hopeful because even if they are a successor practise, the endowment was sold before the 1991 regulations.

Is he now operating as an IFA or an SIFA? If IFA, he could just be getting referrals from the solicitors firms. Many IFAs, including myself, get referrals from accountants and solicitors and see clients in their premises. There is no liability for the solicitor/accountant though. He may have gone from a SIFA to an IFA? If you have his current business card it would have who he is currently regulated by. SIFAs are regulated by the law society and the FSA. IFAs are regulated by the FSA only.

If he has gone from a SIFA to an IFA then the link is likely to be gone. If he is still an SIFA, then you could go down the successor route.

The endowment came tied with home insurance and our premium included legal expenses.

There were some endowment only mortgage deals back then. I don't know how they are viewed upon from a complaints point of view. On the one hand, the only option was endowment so no comparison could be presented as repayment wasnt available. On the other, you would still expect risk issues to be documented.

In summary, I am going to assume it was an SIFA, as that looks most likely. I would also say at a guess, you and your father shouldn't hold too much hope for any compensation. Still pursue it, but just dont rely on it.

Even if you do get some, it will capped and assuming the projected shortfall was £6000, the amount of the compensation to put that right by switching to repayment mortgage may not be that great. Its the difference between the endowment mortgage and repayment mortgage balances (and surrender of endowment) at that point which matters. Not the shortfall.

Geoffrey_Coan

EdInvestor wrote:

On the other hand if you surrendered it now and put the money in the bank@4% also paying in the premiums, you'd be in line for 37.4k, which is an addtional 15k compared with the 12k you've calculated with no risk.If you used it to pay off a mortgage on 6% interest (say) you'd stand to make an equivalent return of an additional 21k.

Can't see much of an argument for keeping it if you don't need the life cover.

Ed, sorry it's taken so long to actually reply to your posting of 20/11 r/e my question of whether I should take the surrender value or not, I've churned the calculations myself and defintely agree I should take the compensation.

My calculations came out even higher than yours; I'm offered £26,035.80 in compensation by Friends Provident so if I just bank this for 9 years (the remaining endowment term) @ 4% it compounds to £37,057.80. If I bank it and pay in the £79.93 per month premium as well for 9 years then it compounds to a massive £47,613.68.
Projecting the endowment policy value forward at current guarantee rates I get a paltry £31,246.25 so they've got to do something out of this world with a final bonus to get anywhere near the "surrender value + premiums + compound interest" figure which as you say is risk free.

Thanks, I'm off to fill in my acceptance form (which expires in a week's time !)

Geoffrey

IML

Hi all,

Can anyone tell me if there is any extra compensation available for the different types of mis - selling? I was sold an endowment by a standard life employee under their "family and friends" package - he was my mates dad, and I think he was on the management side of things rather than the insurance sales. Anyway, I went into his office and was not shown any literature other than the usual "this will pay off your mortgage and leave you loaded" type of illustration (this was in the late 80's). I have taken this through the procedure and SL have offered me £391 compensation.....they say that I was mis sold the endowment for reasons like the life assurance wasn't suitable for me, that my attitude to risk wasn't established and such like - then they say they haven't upheld the part where I was told the endowment would pay off the mortgage with plenty to spare for the dubious reason that they weren't there!!!! - even though they also weren't there to see if my attitude to risk was established!!!! I am wondering if they are trying to weasle out of paying compensation for being lied to? Does anyone know how these things are weighted? I'm at work just now and don't have all the details available, but can provide more info if needed.

Great site by the way.

MSE_Jenny

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gobbledegooch

Hi,

I hope someone can help. I have been paying into a 25 year endowment and have only 6 years to go. It is currently worth 18,000 but needs to make £43,000 - I don't think it will! I have opted for the 'secure' funds but am worried as the endowment has lost £5,000 since September when it was £23,000. Would anyone like to suggest what I can do now, I am so worried.