Should I make an official complaint about endowment?

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

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

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

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

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

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

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

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 __________________________

"tim (moved to sweden)" wrote

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.

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

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

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

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

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.

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.

Can't hurt to check.

FoFP

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