Serious Fraud Office & FSA: fraud concealment?

It is my belief that the wife and I were defrauded, along with hundreds, if not thousands, of others - directly by the top management of the building society.

I contacted the Financial Services Authority and asked them if the analysis of fraud was correct.

They would not answer - so I made official complaint for unprofessional lack of integrity.

I guessed they would not answer of course - and knew why.

Needless to say, they found complaint in my favour - but still they would not answer.

As far as I knew the concealment of fraud is perverting the course of Justice.

So - I contacted the Serious Fraud Office and asked them the same question - were we defrauded.

Guess what - they also refused to answer - obviously for same reason.

So - I contacted Rosalind Wright (Head of SFO) directly and told her I believed they were covering up or ignoring major crime.

Despite protestation, they still refused to answer if my analysis of fraud was correct.

If it is fraud - then isn't concealment perverting the course of Justice?

Can anybody guess why they would want to hide it?

I believe that I know - but would like others opinion.

Endowment Policy is a gamble - therefore is not "fit for purpose" of repaying largest of loans (and proven so) - everybody was "mis-sold" (or defrauded to give proper name).

Please visit my complaint site -


  • dougk_2dougk_2 Forumite
    1.4K Posts
    Endowments are a gamble and that was explained to me....

    I do not believe it to be fraud.

    If you carry this sort of theory to other areas, every MP and prime minister would be locked up as they have comitted fraud by not delivering what they promised.

    Will your endowment pay out more than you paid in - yes?

    I understood the risks when I took out my endowment and even at a low rate I am getting back more than I paid in and had in effect free life cover for the duration.

    My projection is that I will be 7k short when my policy matures - but then in 10 years time that will be a month or twos salary so is it really that bad?
  • dougk> Endowments are a gamble and that was explained to me.... I do not believe it to be fraud.

    Sorry Doug - when I put the FACTS to the Serious Fraud Office - they couldn't deny that it was FRAUD.

    Had they admitted it - then they would be forced to take legal action.

    Which, of course, is why they had to refuse an answer.

    dougk> If you carry this sort of theory to other areas, every MP and prime minister would be locked up as they have comitted fraud by not delivering what they promised.

    As to the Prime Minister - the word is 'deception' - please don't get me started ;-)

    dougk> My projection is that I will be 7k short when my policy matures - but then in 10 years time that will be a month or twos salary so is it really that bad?

    7k for month or two salary - what a blinking well paid job you have got Dougy, me old mate :-)

    My projection is for the best part of a years pension short :-(

    People are losing money at a time when they should be saving for old age - not taking out a loan to make up for any shortfall.

    I am not "Risk Averse" - the derogatory sounding phrase the Financial Services use that makes people look a wuss.

    However - it is total stupidity to gamble your families home - not knowing if you will be in a position to afford to pay the loan at the end of term - true or false?

    DD> The website makes reference to churning but i cannot see any thing in the case highlighted that suggests churning has taken place.

    I had paid five and half years payments repayment scheme before being advised to change to Endowment - please tell us - what is that, if not 'churning'?

    I am so very glad that an IFA has answered DD.

    You will appreciate that nothing said is meant personally.

    Given that IFA's were advising people to buy a product "not fit for purpose" - it is not surprising they are somewhat defensive.

    Some were even silly enough to take their own advice ;-)

    DD> There are also a number of comments that have spin on them to suit the negative point of view. They could equally "spun" to change the point of view. It isnt really a balanced view.

    There has been thousands of visitors to - inc. government, Woolwich, Lawyers and IFA's - a few IFA's even emailed to give constructive criticism.

    I always welcome such criticism - please tell me - what exactly has been "spun"?

    Every single point you make will certainly be reviewed.
  • cloud_dogcloud_dog Forumite
    5.6K Posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic

    I've umm'd and arr'd about replying to this post as it is obvious that you have / will be hurt by endowments and financing the hit could be difficult for you, but........ (here we go).............

    Up and till a certain point a lot of people / organisations believed endowments would deliver. The problem stems from the actuarial calcualtions used for calculating returns on investment. I think in years gone by they may have used (as examples) 7%, 10%, and 13% annual resturns in their investments when in actuality the average was probably nearer the 3%, 4%, or 5% returns.

    The bottom line is that they were all guessing as to projected returns. Did you understand that the endowment was linked to investments in the open market (shares, bonds, etc). If you did then I'm not sure fraud is an angle I (personally) would consider. They may have been recless or finacially irresponsible.

    I assume you are putting as much energy into funding the shortfall as you are in progressing your grievance? Why not (if you haven't already) try to 'stooze' some money from CC companies and gain some extra income from their money.

    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • Thank you for contributing to discussion Cloud Dog :-)

    Yes - there certainly was financial irresponsible by reckless IFA's - but that is just a part of it.

    Given market uncertainties - the more intelligent financial experts knew that this product was "not fit for purpose" of large mortgage loan repayments.

    I fully admit to being stupid - trusting my mortgage company like I would my bank - confident that they would say what was best for me - not con me.

    Only a moron would claim that they can not be conned.

    I naively assumed that the investment was protected in some way - I did not dream that I could be left owing many thousands after very long twenty five years of mortgage payments.

    How could the authorities allow them to 'churn' people - or sell them something unfit for purpose?

    As to funding the shortfall (a position for which my Building Society are responsible for putting me in) - you will have to wait and see ;-)

    It is most important to note - the fraud (or 'mis-selling' as they like to call it) is ongoing - it did not just happen when you signed up.

    This time bar thing is bull.

    As to your sig - I do take personal responsibility of my actions - however, if I act wrongly - entirely because of my full reliance on somebodies deception or recklessness - they are the ones at fault.
  • serpicoserpico Forumite
    169 Posts
    Where not hundreds of thousands of people sold Endowment Mortgages on the assurance or promise that their mortgages would be paid in full and they would also received a cash bonus on top.

    Therefore it must be at best a fact, they were wrongly advised (a criminal offence under the 1986 financial services act 1986) at worst serious corporate fraud.

    THE LAW.

    Since at least 1766 insurers have had a duty to give full disclosure of the risks and disadvantages of the policy of insurance and to avoid misleading customers. The consequences of such non-disclosures and misrepresentations generally were  to allow the clients to avoid the contract and to receive a full refund of contributions without any deductions for the costs of life cover. (Judgements only refer regularly to interest after the 20th Century).

    Similarly since the 19th Century and probably before then, assurers could be held liable for causing someone to enter into a contract by a fraudulent statement. In the 1960s the Courts decided that anyone offering expertise to another person would have to pay damages if they acted negligently in providing that expertise. Section 2(1) of the Misrepresentation Act 1967 allowed a person who induced another to contract with him by a misleading statement to be liable for any resulting damages unless he could prove that the statement was not careless. Section 2(2) of the Act also allowed the Court in its discretion to award damages to a person who could otherwise avoid a contract for misrepresentation so as to keep the contract in force.

    It would appear that the law consider that mis-selling, misreprestation, breach of contract and fraud are one and the same.

    The fact that the self governing body overseen by the Financial Services Ombudsman (FINANCED BY THE ENDOWMENT MORTGAGE PROVIDERS Themselves) has seen fit to term the shortfalls, "mis -selling" is misleading to say the least.

    Courtesey of H.M Treasury

    No precise legal definition of fraud exists, many of the offences referred to as fraud are covered by the Theft Acts of 1968 and 1978. The term is used to describe such acts as deception, bribery, forgery, ectortion, corruption, theft, conspiracy, embezzlement, misappropriation, false representation, concealment of material facts and collusion.

    For practical purpose Fraud may be defined as the use of deception with the intention of obtaining an advantage, avoiding an obligation or causing a loss to another party (Government Internal Audit Manual (GIAM C5.4). The Auditing Practises Board's statement of auditing standards (SAS) 110 "Fraud and Error" gives more background information o the meaning of fraud and distinguishes between fraud (deliberate falsification) and errors (unintentional mistakes)

    There are primarily three times of irregularity which are of concern in this context:


    Dishonestly appropriating the property of another with the intention of permanently depriving them of it (Theft Act 1968) This may include the removal or misuse of funds, assets or cash.


    Dishonestly destroying defacing concealing or falsyfying any account record or document required for any accounting purpose, with aview to personal gain or gain for another, or with intent to cause loss to another or furnishing information which is or maybe misleading, false or deceptive (Theft Act 1968).


    Obtaining property or precunery avantage by deception (Sections 15 and 16 of the Theft Act 1968) and obtaining services or evading liability by deception (Sections 1 and 2 of the Theft Act 1968.

    The Consumers Association estimates that next to the Pensions fraud second biggest scam next to Pensions fraud is the Endowment Mortgage Fraud - might have involved anything up to six million cases. According to the so called 'super - regulator' the Financial Services Regulator (FSA) in 30% of the cases of Endowment Mortgage ( for much of the 1980s and 1990s the most widely sold type of mortgage) customers were wrongly advised (a crminal offence under 1986 Financial Services Act), leading to many losing their homes. Meanwhile the high street Building Societies pocketed untold millions in commission payments: In 1989 alone mor than £400 million. The real Scandal was that the government opened up new markets in private pensions and allowed the industry to self regulate. It was a hands - off policy that the current government has scandalousley followed.

    The damage caused by this corporate crime was compounded by the governments review which allowed the companies to organise and pay out the compensation for the victims of these crimes themselves. Of course most of them did'nt - and in just one year (1997/98) the regulator, the Personal Investment Authority, was forced to fine 150 firms a total of almost £5million for failing to ompensate their customers. Countless hundreds of thousands remain uncompensated, many left without their life savings, and nobody - not one single company or company director - has been taken to Court for Fraud.

    Anyone know why a smiley came up every time I typed 8 and I can't modify it?
  • Serpico - people are obviously afraid to face facts.

    The IFA's certainly do not want to be seen as part of the whole scam - most smaller ones were likely too stupid to see that repaying a massive loan is totally different to gambling ('investing') your spare cash on the stock market.

    Any so-called 'Financial Expert' that says they did not know about market downfalls or crashes before this, is either a liar or an incompetent clearly not fit for the job.

    Endowment Policy is a gamble - therefore is not "fit for purpose" of repaying largest of loans (and proven so) - everybody was "mis-sold" (or defrauded to give proper name).

    Ask any one of these financial experts on the witness stand, "EVEN IF a couple might think it is good idea to take out an endowment, a VERY LARGE LOAN (years of their joint salary), though they know it a gamble - when is it ever GOOD FINANCIAL ADVICE to say they should go ahead with a GAMBLE TO REPAY THE LARGEST OF LOAN?"

    I believe these firms can certainly be proven guilty of serious corporate fraud in a Court of Law.

    Even top people in the Serious Fraud Office could not deny fraud.
  • ReaperReaper Forumite
    7.2K Posts
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    I understand you are upset at losing out on your endowment but if anything I think the compensation has been over generous (I'm bracing myself to be flamed now!)

    Some people may have been tempted to take out an endowment on advice without understand what it was. It seems to be incredibly foolish to go into the biggest financial transaction of your life without understanding it, but nevertheless I accept they should be entitled to compensation.

    Others understood what they were getting into and accepted the risk. They understood that the endowment was not guarenteed to pay it off but took the risk in the hope of getting an extra sum back at the end. Now many of these people have been claiming and getting compensation too. That is not right. Anybody who understood returns were dependant on the stock market only has themselves to blame for their greed - and I include myself in this category. I took the risk and it didn't work. I'm not attempting to claim because it failed.

    As to whether there was deliberate fraud in the mis-selling - no I don't think so. There had been periods of boom and periods of high inflation. Both of these favour endowments. Unfortunately a couple of crashes and a long period of low inflation have made them underperform. Maybe in the future this will change and they will look attractive again. You would say they shouldn't have expected the prevailing economic situation to remain unchanged, I'd say exactly the same about today's economy. Maybe in a few years people will complain they were mis-sold a repayment mortgage! (no, I don't really think that!)
  • serpicoserpico Forumite
    169 Posts

    Extracts from. "Corporate crime at the Tip of the Iceberg by David Whyte, Centre for Criminal Justice, University of Leeds".

    "The costs of clearing up the Endowments scandal may cost the industry a paltry £100 Million, despite estimates that the cost of proper compensation would be more close to £5 Billion, Last month the chief of the FSA, Howard Davies - who just also happens to be the former head of the Confederation of British Industry - refused to launch an enquiry because he thinks it would cost the Government and the Companies to much! Now thanks to Davies and the Blair Governments sympathy for this crooked industry, we have no chance of finding out exactly how many people were DEFRAUDED, or how much of our savings were THIEVED as the building societies who LIED and CHEATED their way to huge profits. It seems now that this particular gang of corporate villains will get of the hook and continue to police their own nefarious activities.

    In the meantime our prisons continue to be filled up by people whose CRIMES fade into insignificance by comparison (for one, television licence convictions rose by 75% last year). So the next time Blunkett and Blair start jumping up and down demanding jail sentences for irresponsible parents, shoplifters and playground mobile phone thieves and new CCTV systems to protect high street retailers, remember we have a much bigger chance of being victimised by New Labours closest mates. Instead of handing out corporate dinners and international junkets at our expense, its time to start dealing out some proper justice to corporate villians, before our whole social fabric is ripped apart by those most violent, parasitical, and dangerous criminals".

    It was fraud, H.M Treasury is precise and clear on their definition. Obtaining money by deception, trickery and lies, false and misleading promises, embezzlement, obtaining pecuniary advantage, thieving or whatever else you like to call it by corrupt and dishonest corporations and its directors, who probably have politicians and government ministers who are also directors sitting alongside them on their boards with their snouts in the trough ensuring the protection of the £millions of loot and plunder they obtained by criminal dishonesty from millions of the trusting victims they knowingly falsely advised and are continuing to do so.
  • Reaper> It seems to be incredibly foolish to go into the biggest financial transaction of your life without understanding it, but nevertheless I accept they should be entitled to compensation.

    Dear Reaper - how can I explain?

    Like millions of others, we thought that we understood - we thought it was safe - else why would they offer it to us?

    I completely accept that we were really stupid to believe them - that we would have thousands left over when the loan was paid.

    But let us pretend I am a liar - and instead, like you, completly understood what we were getting into and accepted the risk. Even though - nobody has a clue in what financial position they will be in twenty five years time - therefore, they really only think they understand.

    How exactly does that make Endowments "fit for purpose" of a massive loan repayment?

    Why isn't it deliberate fraud - selling a major financial product that is UNFIT FOR PURPOSE and passing it off for something that is?

    The Serious Fraud Squad could not deny it was fraud - are you any more qualified?

    As to Endowments looking attractive: even if there is another boom - they could still crash before you cash them in - they are UNFIT FOR PURPOSE of massive loan repayment.
  • serpicoserpico Forumite
    169 Posts
    Reaper, I appreciate and understand your thinking. however you are obviously reasonably well if not fully conversant with how Endowment Mortgages work and that  the ultimate payout can be far less than the mortgage debt.

    However I believe that things are a bit different today to 15 or 20 years ago. More people, but not all by a large margin have become more educated and conversant with the financial workings of the economy with the privatisation and free share offerings, many did not know what a company share, the FTSE or DJI was some years ago are now shareholders and know that the markets fluctuate affecting everything.

    During the 80s and 90s millions were encouraged to buy their first home, those same millions who were totally ignorant of "how to" sought the professional advice of the so called expert IFAs, Banks and Building Societies.

    What was more disastrous, if not with hindsight absolute stupidity is the fact that they placed their absolute trust in the integrity and honesty of these so called professionals who were bound by a duty of care to look after and protect the safe interests of their clients.

    Untold millions were told that Endowment Mortgages were the best way to purchase their homes. The bin man, the plumber, the tyre fitter and the window cleaner, with no disrespect to those among us who are engaged in manual labour and make a vital contribution to our society, indeed I know a highly educated fully qualified member of the medical profession who in 1986  did not know what the FTSE 100 was, who got suckered into an endowment that ran after retirement age with the false promise that. "This will pay of your mortgage probably before you retire and there will be a nice few thousand pounds bonus as well".

    The reality was that most people were to busy in their everyday lives working, looking after their children and the many miriad of things that occupy their lives 24/7 to spend time going into great depth in respect of these matters and that is why they sought the advice and placed their trust in the so called expert professional advisors to look after their best interests.

    Let us take a hypothetical situation of a grave digger, (Rod Stewart was one once), he is employed by a Council in a secure virtually guaranteed for life job, honest very hard working and an asset to society providing a vital service to the community. He does this this job because he came from a poor and not well educated background and only does this job because of his limited education.

    This vital member of our society wants to better himself and provide a better more secure life for his family by buying his own home, he then places his trust in and seeks the advice those he believes to be experts in advising him the best and safest way to secure his dream.

    Does anyone really be believe that this ordinary man poorly educated though he is, would have been stupid enough to take out an Endowment Mortgage had he been properly and honestly advised and told the truth.

    "This Endownt method is very risky it is based on gambling on the stock market the value of which can go down more rapidly than up and there could be a large shortfall of thousands of pounds which will not clear your Mortgage".

    This means that if you cannot find the money to pay that shortfall, your wife, your children and yourself will have your home repossesed and you will all be homeless and on the streets and all of your mortgage payments will have been for nothing ".

    I dont think so.

    During the 80s and 90s Endowment Mortgages far outsold repayment mortgages. These were recklessly sold by a high pressure sales force, hell bent on the sole purpose of making huge commissions for themslves and millions in profits for the banks and building societies with their deceptively hidden commission and management charges soaking up their clients money regardless of the consequences to their trusting clients and the misery and poverty they have criminally inflicted on a trusting people.

    If a person enters into an agreement and is specifically told that the agreement is, "that in 25 years providing you keep up these monthly payments you own your own home", and it does not happen.

    In my humble opinion common sense dictates that this is at least one of the following laws legislated to protect the consumer has been broken.

    Breach of Contract.


    Obtaining Money by Deception.

    Obtaining Pecuniary Advantage.

    Dushonesty and Theft.

    Product sold. Unsuitable for intended purpose.

    False misrepresentation.

    Lack of Due Dilligence and Care.

    What the Endowment Mortgage providers told their clients would get is what they should get not one penny less.

    The FSA has admitted to the Commons Treasury Committee that there was widespread mis-selling of Endowment Mortgages during the 1980s and 1990s.

    What a convenient addition to our Dictionary that word mis-selling has become.

    I do not and never have had an Endowment Mortgage

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