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Mis-sold loan & endowment

My sister took out a 10 year interest only loan for £12000 in February

1993 with an endowment which she was told would pay off her loan. She paid 16% over the base rate (£120 per month)for the 10 years of the loan, with a endowment payment of £72 per month. At the end of the term the endowment paid out £10400 leaving a shortfall of £1600 which she took out another loan to pay off over a year.

She did complain about the shortfall to the insurance company and was offered £1500 which she accepted.

What i would like to know is does she have grounds for complaint regarding being missold an endowment and does she have grounds for being missold the extortionate loan.

She did not understand the risks involved in the endowment and she was not advised on other options of paying off the loan.

Thanks in advance Alex

Reply to
end user
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In message , end user writes

This doesnt sound right. £120 per month indicates a rate of 12%, not '16% over the base'.

This sounds like a 'non status' loan or something similar, or even a second mortgage. Who was the lender?

Reply to
john boyle

Originally the lender was the bank of scotland, the accounts (personal & business) were then switched to the clydesdale bank in november 1994, because the bank of scotland would'nt give her a mortgage to buy a house and the clydesdale would! The loan repayments were reduced by the clydesdale bank to £102.50 per month

BTW the original loan was to buy the hairdressers shop which she had been renting.

Reply to
end user

In message , end user writes

OK, so this is a different scenario to that originally suggested, though I know this wasnt intentional on your part

A business loan is charged on a completely different basis to a domestic house purchase loan. You havent clarified the arithmetical inconsistency on the interest rate, can you make this clear?

Also, who advised that an endowment should be used? The Bank? The INsCo or an intermediary?

I am sorry to keep asking questions, but this does not appear to be straightforward house purchase mortgage endowment mis sale, but something quite different indeed.

Reply to
john boyle

Sorry about the inconsistencies but i am relaying the information through my sister to the newsgroup.

She did not know what interest rate she was paying when she took out the loan, she just made sure the money was in the bank when the payment was due.

It was'nt until the loan period ended(10 years) and the endowment had a shortfall that she was told by the bank manager of the clydesdale that she had been paying an interest rate of 16% over base 7%. She is adamant that this was the case.

She was advised by an independant advisor employed by the bank of scotland to use an endowment to pay off the loan.

I hope this helps.

Reply to
end user

My sister found her original loan agreement and it turns out that the interest rate originally was 8.5%!

sorry for the mis-information. But question is does she still have a claim for being miss-sold the endowment? Thanks

Reply to
end user

She seems to have "lost" only 100? If so, what are the grounds for her further claim?

Reply to
Doug Ramage

In message , end user writes

Are you the same 'end user' who wants to lie on the endowment claim form?

Your sister was only £100 short!

You seem like a money grabbing liar.

Reply to
john boyle

Now John, what I have told you about "sugar-coating" your posts. :)

Reply to
Doug Ramage

In message , Doug Ramage writes

Sorry. Sometimes I can t help it.

Reply to
john boyle

Don't you mean "sexing-up"?

Reply to
Ronald Raygun

IIRC, the poster in question simply asked a reasonable question.

Don't tempt me

Reply to
Fergus O'Rourke

To which question are you referring?

I think my question was also reasonable, or do you disagree?

:-)

Reply to
john boyle

IIRC he asked if he had to disclose everything that he had.

Provisionally yes

Reply to
Fergus O'Rourke

In message , Fergus O'Rourke writes

Ok. As far as I can see my question to the OP is relevant to the question, but I cant see how your contribution to the thread is.

Reply to
john boyle

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