Should I make an official complaint about endowment?


M

MM

Although I have paid off the mortgage, I kept the endowment policy
with Standard Life active in the belief that it would pay out a tidy
little nest egg when it matures in six years' time.

Over the past couple of years or so, I have received letters from SL,
which were increasingly dire in their predictions of what the maturity
value will be. Since I had long since already paid off the mortgage I
thought, thank God I don't need the endowment to cover the sum
borrowed! But I didn't really think beyond that.

Most recently I received a 'red warning'. Yet again, the amount now
guaranteed at maturity is well below what it would have needed to be
to pay off the sum borrowed.

The question is, does one just accept the old mantra "markets can go
down as well as up" or is there a case for complaint here? If it was
"only" a grand or so less, I'd be miffed, but could sigh and say, oh
well, the shysters nailed me. But the 'missing' amount is now around
£6,500 and rising. That's £6,500 that I won't be getting in that nest
egg I have been looking forward to.

MM
 
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M

M Holmes

MM said:
The question is, does one just accept the old mantra "markets can go
down as well as up" or is there a case for complaint here? If it was
"only" a grand or so less, I'd be miffed, but could sigh and say, oh
well, the shysters nailed me. But the 'missing' amount is now around
L6,500 and rising. That's L6,500 that I won't be getting in that nest
egg I have been looking forward to.
You could try. Note though that "It's not enough" won't get you far.
There are specific grounds for Endowment Misselling Claims and you
should check up on these before making a claim, if you really want it to
have a chance of compensation.

Handily, you should also get a little something when they privatise.

FoFP
 
T

tim \(moved to sweden\)

M Holmes said:
You could try. Note though that "It's not enough" won't get you far.
It will get him nowhere at all.

The fact that he has paid off his mortgage and that the endownment
is now a stand alone item will be fatal to any claim.
The amount of compensation that you get is based upon how
much you need to pay off the remaining mortgage and as that is
nil he will get nil.

tim
 
M

M Holmes

It will get him nowhere at all.
The fact that he has paid off his mortgage and that the endownment
is now a stand alone item will be fatal to any claim.
The amount of compensation that you get is based upon how
much you need to pay off the remaining mortgage and as that is
nil he will get nil.
That can't be entirely correct. My partner had an endowment (obviously
taken out before she met me). On discovering this I had a look over her
records and found that it was worth in total, less than the amount she
had paid into it (it was risibly called "Capital Builder").

I made a complaint and she got 2400 quid. No house or mortgage
necessary. In fact the major emphasis of my complaint was that since she
had no mortgage, she shouldn't have been sold the endowment.

FoFP
 
D

Doug Ramage

tim (moved to sweden) said:
It will get him nowhere at all.

The fact that he has paid off his mortgage and that the endownment
is now a stand alone item will be fatal to any claim.
The amount of compensation that you get is based upon how
much you need to pay off the remaining mortgage and as that is
nil he will get nil.

tim
I would disagree. Just because someone finds himself/herself in a position
to redeem the mortgage does not preclude, IMHO, a claim for mis-selling of
the associated Endowment policy.
 
I

Ian

Doug Ramage said:
I would disagree. Just because someone finds himself/herself in a
position to redeem the mortgage does not preclude, IMHO, a claim for
mis-selling of the associated Endowment policy.
Agreed. I moved house three years ago and swapped to a repayment
mortgage but continued to pay into the endowment. Just made a claim for
mis-selling and got over £5k. You need to be able to show that you were
not made aware of the risks at the time the endowment was taken out.

Regards,
Ian
 
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T

tim \(moved to sweden\)

Doug Ramage said:
I would disagree. Just because someone finds himself/herself in a position
to redeem the mortgage does not preclude, IMHO, a claim for mis-selling of
the associated Endowment policy.
There have been several reports in the papers of people who
have paid off some of the shortfall having their compensation
reduced by the amount that they have paid off.

There was story last week telling people with a mis-selling
claim that they shouldn't make any effort to pay any extra
on the mortgage lest their claim be reduced (I looked for this
but I can't find it now.) I exrapolated up to the "if you've paid
it all off there will be no compensation" which seemed a
reasonable thing to do (the extrapolation that is).

It isn't the ability to pay it that matters, it's the fact that you
have. I agree it isn't fair, but it's what is reported as happening
in the real world.

tim
 
M

MM

I would disagree. Just because someone finds himself/herself in a position
to redeem the mortgage does not preclude, IMHO, a claim for mis-selling of
the associated Endowment policy.
Indeed. The shortfall is a shortfall, no matter how you cut it. It
would have really been a problem to make up the difference if I had
not paid off the mortgage. But equally it won't be much fun having to
accept a much lower payout. If there is a claim for compensation to
meet some/all of the shortfall if I still had the mortgage, how is
that claim negated by paying off the latter?

MM
 
M

MM

Agreed. I moved house three years ago and swapped to a repayment
mortgage but continued to pay into the endowment. Just made a claim for
mis-selling and got over £5k. You need to be able to show that you were
not made aware of the risks at the time the endowment was taken out.
Ah, but how do I do that? I converted from repayment to endowment in
1986, and at the time EVERYone was jumpting on the endowment
bandwagon. Anyone one spoke to in the finance industry simply said how
the endowment route was the bee's knees and it was just plain common
sense yada yada yada. Well, we all know that finance people, like
politicians, can talk the hind leg off a donkey.

So, how would I remember back almost 20 years and come up with a
plausible argument? I put my trust in the financial gurus at the time
and just listened to all their warm words.

All I know is, I feel I have been ripped off by someone, and if that
warrants compensation no matter how small, then I feel it is worth
making the claim.

MM
 
R

Richard Buttrey

Ah, but how do I do that? I converted from repayment to endowment in
1986, and at the time EVERYone was jumpting on the endowment
bandwagon. Anyone one spoke to in the finance industry simply said how
the endowment route was the bee's knees and it was just plain common
sense yada yada yada. Well, we all know that finance people, like
politicians, can talk the hind leg off a donkey.

So, how would I remember back almost 20 years and come up with a
plausible argument? I put my trust in the financial gurus at the time
and just listened to all their warm words.

All I know is, I feel I have been ripped off by someone, and if that
warrants compensation no matter how small, then I feel it is worth
making the claim.

Why? What ever happend to the dictum caveat emptor? And failing that,
just plain common sense.

Yes, you're right, back in the 80s endowment mortgages were in
fashion, but so what? That shouldn't have meant a suspension of all
critical faculties. In this life you never get owt for nowt, as my old
dad was constantly telling me. It's not being wise with hindsight
because even then I could see through the sales techniques, and
decided that endownment mortgages were for the gullible.

Why should I, indirectly through whichever financial institution holds
my savings, now be asked to compensate those who were either too
greedy or too stupid to think these things through?

Rgds


__
Richard Buttrey
Grappenhall, Cheshire, UK
__________________________
 
T

Tim

There have been several reports in the papers of people
who have paid off some of the shortfall having their
compensation reduced by the amount that they have paid off.

There was story last week telling people with a mis-selling
claim that they shouldn't make any effort to pay any
extra on the mortgage lest their claim be reduced ...
From personal experience, I know of someone who had to prove to the
endowment provider that :-
(1) the mortgage was still in force;
(2) it was still "interest-only"; and
(3) provide evidence of the remaining balance outstanding
... before the compensation payment was made.
 
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M

M Holmes

MM said:
So, how would I remember back almost 20 years and come up with a
plausible argument? I put my trust in the financial gurus at the time
and just listened to all their warm words.
You have to try to get copies of the paperwork from the company if you
don't still have them yourself. What you're trying to prove is either
that you were sold the wrong product for the job (unlikely if you did
have a mortgage) or that you were not made aware of the risks of the
product.

FoFP
 
M

M Holmes

Richard Buttrey said:
Yes, you're right, back in the 80s endowment mortgages were in
fashion, but so what? That shouldn't have meant a suspension of all
critical faculties.
Yeah. Back then I was telling anyone who'd pay atention not to go for
endowments. I have no evidence that anyone did in fact pay attention
except inasmuch as it cemented my reputation for being a financial
doomster.

FoFP
 
M

M Holmes

Tim said:
From personal experience, I know of someone who had to prove to the
endowment provider that :-
(1) the mortgage was still in force;
(2) it was still "interest-only"; and
(3) provide evidence of the remaining balance outstanding
... before the compensation payment was made.
True, but many providers are what they call "At It". They're refusing
claims for spurious reasons and hoping that claimants won't persist. The
FSA has already passed out wrist slaps for this sort of thing. If a
product was missold, then that's down to the circumstances pertaining at
the time of selling, not at the current time.

FoFP
 
M

MM

You have to try to get copies of the paperwork from the company if you
don't still have them yourself. What you're trying to prove is either
that you were sold the wrong product for the job (unlikely if you did
have a mortgage) or that you were not made aware of the risks of the
product.
Oh, I will have copies. I have all my paperwork going back to 1969,
and the house in question had its mortgage changed to endowment-based
in 1986 (after two years of a repayment mortgage). It just means going
through 15 or so lever arch files. Not too onerous if it means a
couple of grand or so. As for warnings, there were none whatsoever
that I can recall. At the time, no matter which financial institution
you spoke to, these 'new' endowments were made out to be like manna
from heaven. Maybe the small print says different. I'll just have to
read it and see. But compared to today, where EVERY financial
statement is always accompanied by a load of caveats, in 1986 it was a
lot more lax. I think a lot of sellers got away with murder, but this
being Standard Life and thus a cut above the rest, that may not the
case with them.

MM
 
M

M Holmes

MM said:
On Mon, 16 May 2005 13:45:05 +0000 (UTC), M Holmes
Oh, I will have copies. I have all my paperwork going back to 1969
Excellent. You need as quickly as you can to get a claim in. You should
send copies of these documents and point out all references made to
risk.

To succeed, you'll need to establish that you were not made sufficiently
aware, at the time, of the risks involved in an endowment policy. If the
other option of a repayment mortgage was never offered to you then
point that out too.
Maybe the small print says different.
Well if you've signed something that says "I understand that this is a
stockmarket investment and that stocks can go down as well as up" then
it probably won't help.
I'll just have to
read it and see. But compared to today, where EVERY financial
statement is always accompanied by a load of caveats, in 1986 it was a
lot more lax. I think a lot of sellers got away with murder, but this
being Standard Life and thus a cut above the rest, that may not the
case with them.
Can't hurt to check.

FoFP
 
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M

MM

Excellent. You need as quickly as you can to get a claim in. You should
send copies of these documents and point out all references made to
risk.

To succeed, you'll need to establish that you were not made sufficiently
aware, at the time, of the risks involved in an endowment policy. If the
other option of a repayment mortgage was never offered to you then
point that out too.
I already had a 25-year repayment mortgage which had been going for 2
years, but I was strongly advised to switch to an endowment mortgage.
The advice from all quarters (and, I believe, in the media generally
at the time, 1986) was very positive in favour of endowments.

MM
 

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