Mortgage endowment shortfalls
 

Anyone complained successfully on their own - or used a legal firm ?
Currently a company called Vickers Anderson are chasing me to act on my behalf - sounds good apart from the £500 up front (refundable in the event of failure apparently).
Tempted to let them deal with it - they boast a 90% success record and will obviously word it all better than I could.

Any similar experiences ?

You don't need someone to act on your behalf. The FSA are already doing that very sucessfully. What company is your endowment with?

FB, Why do you ask which company policy is with - just curious? I have been stuffed with big shortfalls with Norwich U and Standard L. Standard wrote to me in Feb 02 say plan was "on target" but less than a year later wrote saying worst scenario was £20k shortfall - pretty professional eh!!! DL They don't seem to actually reply to letters - is this common?

I have 2 underperforming - Std Life & Scottish Provident.
It just looks like for a 10% fee maybe they'll have more chance of success & it shouldn't be thrown out on a technicality - that's what they say anyway.

Most of the big insurers have already been given a slap by the FSA for misselling. If this is the case, complaining is very straight forward. You send a letter saying 'I want to make a complaint about my endowment. No-one ever told me my endowment might not pay off my mortgage.'
If they don't respond within 1 week, send another letter telling them that they have 1 week to respond or you will be referring the complaint to the Financial Ombudsman.
They are suposed to settle the claim in 8 weeks. This is currently standing at about 1 year, but after May 2004 the FSA are threatening to start imposing fines on anything that takes longer than 8 weeks.

Once you make a complaint, the company will contact the person who sold it to you to ask for a copy of the fact find they used to make their decision. Unless this states very clearly that you have a high risk profile and that you are aware of the negatives of endowments then you will most likely be offered compensation.

A 90% sucess rate would be about average. The only cases I have been involved that were refused compensation have been when the client should have known better - EG - If they already have a large investment portfolio then they should be aware of the risks of invesment backed plans.

We got our solicitor to get the ball rolling..........(we were actually moving at the time so he put the cost on his final bill).

After many months of tooing and froing letters etc.......we got out settlement figure of £30K.
Needless to say we took the money and RUN.

Good luck and hurry up.....

Joan.

If it gets thrown out on a technicality appeal it to the Financial Ombudsman. They are there to give both sides a fair hearing.

The main reason for getting turned down at the first hurdle is that people complain that their endowment if performing badly. This is not a valid resaon for complaint. You must complain that no-one ever explained that it was possible that it may not pay off your mortgage

Ok thanks - sounds like this co is telemarketing itself into a real boom mkt at the moment.

FB, the impression I got when speaking to Standard and Norwich was that it was up to me to take it up with the company/individual who flogged me the endowment all those years ago. You are saying that it is for them (Standard and Norwich) to contact the seller rather than me. Have I understood you correctly and, if so, I presume I am justified in going back to Standard and Norwich and telling them not to pass the buck back to me? TIA. Sorry sounds semantic but an important distinction, at least for me :D David

I too have one thats expected to fall well short of the amount i should have received at the end of the term.

Speaking to them last week the surrender value is less than half the amout i have paid into already, needless to say im not impressed.

The finacial advisor that set the policy up for me did write to me and explain the risks, to what extent i cant remember.... i'll have to dig back through the paperwork.

Not knowing anything about mortgages and endowments i agreed to go with what i was been told... at the end of the term you will have more than enough to pay off the mortgage and a lump sum of cash spare. Sounds appealing to anyone i would have thought.

Sorry to take this slightly off topic, but should i now simply surrender the policy or try to get some sort of compensation?

CEL I would try to get compensation definitely, but also you must make provision for the shortfall eg take out a repayment mortgage the sooner the better.
DL I don't think it matters who flogged it to you - they shouldn't pass the buck.

DL - It is up to them to ensure that people who are selling their products comply with regulations. They may try to wriggle out of it if it was an IFA, but if you stick to your guns you might have some luck.

(If it was an IFA try making the complaint directly to them as well)

Thanks FB, it was Leeds Perm BS (now Halifax) and I am having a go at them as well. Aim is to try and get Halifax to cough up for additional repayments which will meet target. Interestingly I came across a 1989 Standard Life brochure which said "Our plans.... represent good value for cautious investors" Maybe I'll remind them of that sometime.... DL

Standard Life got back to us very quickly when my GF complained. They have sent us a screed of forms to fill in asking for all the details. We were first time buyers and were told we would have a considerable sum left over after paying off the mortgage and were never told it might under perform so I'm feeling quite hopeful.

Whats this fact find thingy, and can it be doctored to make it look like the lender/advisor told you of the potential pit falls?

I have also been approached by Vickers Andersen and am deeply suspicous of this £500 upfront fee. My daytime job involves appealing peoples business rates and the number of people who have been caught by cowboy firms saying "Instruct us, no saving - no fee, we'll refund your initial fee" is no odds to anyone. Companies pay the upfront fee, the agent then does a runner!

Isn't there a time limit for applying for compensation or complaining about mis-selling?

Jye, who sold you the policy, Standard Life or someone else e.g. an independent guy? 'Cos Standard Life haven't sent me any such forms! DL

I think it's 3 years from when you rec'd the "red letter" or when you should reasonably have been aware.
The other suspicious bit about Vickers Anderson is the credit card payment form - says it will duduct money in Euros.
Not going to sign up with them but I am definitely going to complain.

We complained to Standard Life and they replied that as the Bank of Scotland (now Halifax) sold us the policy we should fill out and return the forms with details such as the name of the advisor, what he told us etc. I never really looked at the forms as we are going to sit down together at the weekend and get them all filled in. I can have a look tonight if you want more info.

We saw a 'supposidly' independant mortgage adviser at the estate agents who were handling the sale and he advised us to go with the Bank of Scotland endowment. I guess technically the bank mis-sold the mortgage.

I'm in the same boat with mortgage shortfalls on two Scottish Provident policies. Unfortunately the higher value one was taken out before the 1988 cut-off date so the financial advisor effectively told me to F.Off.

Can I appeal directly to Scottish Provident?

Gary - The 1988 cut off excuse is bull. I have two clients who have sucessfully claimed against policies sold in 1984. It is just harder to make the claim as it isn't covered by the FSA.

Fact find - It could be doctored, but the penalty for an advisor who missells is a 10 minute chewing (the insurance co or the PI company usually pay up. The penalty for doctoring fact finds in order to defraud an investor is anything up to 14 years not picking up the soap.

Time limit - As far as I know you can complain at any stage during the lifetime of the endowment. Most things mortgage related have a complaint time limit of 6 years from arrangement, but this doesn't apply to endowments

What about if you cant remember any of the details?
I too am looking at a loss, am now with Royal London after the original company has been bought out, it was started over 15 years ago the only thing I remember about the advisor is that he told me it would make over double the amount I am likley to see !
I have kept some info and example complaint letter from the Telegraph but not sure if there is any point

Don't you have to be a bit retarded to *not* realise that a stock market based investment *might not* perform in a defined way??

Burger King don't warn me, as they hand over my bacon double cheeseburger, that it might not be a very healthy thing to eat. Can I sue them for making me fat?

Mooncat - I couldn't remember any details of mine other then the guy telling me I would get the mortgage paid and have enough left for a new car and a nice holiday. Complained last year (Allied Dunbar) After 10 months they offered to top the fund up to what it should have been if it had performed as forecast (this would still lead to a shortfall), or to stop the endowment, refund me the total amount paid and pay for life cover for the remainder of the mortgage.

I can tell you on pretty good authority (Hey FB ;) ) that you dont need to go through a third party company to make your complaint, or to get things looked into. Also if you use one of these companies, you are not likely to get any more than if you complained directly. When they do the calculations, to work out what compensation (if any) is due should they uphold your complaint, a piece of software called Mortgage Fundamentals is used, and this is the same software that is used by the Financial Ombudsman Service.

The FSA guidelines at the moment state that a complaint should be dealt with within 8 weeks of receipt, although a few companies have a dispensation for slightly longer, they are REALLY coming down hard on them to get the times down to this level.

I would listen to Ian - mainly cos he is the guy who throws you letters in the bin unless they mention a complaint against me :rolleyes:

that's a fair point, but endowments were seriously over pushed. also, the *illustrations* that were used were based on very optomistic forecasts as to how the investment might perform. as recently as 7 years ago they were still doing it - i had the full treatment when trying to buy my first flat, despite the fact that i opened the conversation with the words "i want a simple repayment mortgage and death cover only". 4 hours later i had been sold an endowment and a whole raft of over priced insurance. happily, i went back the next day and cancelled the whole lot.

:)

Seriously though, I am currently at one of the larger companies who sold endowments (only for another 2 weeks you will be pleased to know FB) .

Anyhow when a complaint is recieved in our department, we will 99.9% of the time have a response set to you within 5 working days to acknowledge the recipt of the complaint, however before we send this letter out we do some checks before hand, if the policy was sold by an Independant Financial Advisor/Broker then they are the ones liable for the advice that was given to you, and we will not normally take the complaint on in those circumstances.

After the inital acknowedgement the complaint gets a case file made up, and goes through an information gathering stage, where items such as copies of policies, fact finds/PFR's are all collected, as well as reports from the representative who sold the policy (if they are contactable, via letter), and also possibly information from your mortgage lender. Once all the information is gathered together the case file will be passed through to a team who look at each case file and make a decision as to if the specific complaint is to be upheld or not.

If the complaint is upheld then the case file is passed through to another team who deal with all the calculations, with regards to any redress that may be required. After that and if everything is OK, then you would recieve an offer letter.

After that it is just a case of going through the settlement process.

Gareth - I am currently arranging a mortgage for two 20 year old who have basically just finished school and got jobs between 9 and 18 months ago. Both are intelligent and have good jobs. Neither knows anything about mortgages, interest rates, stock markets etc etc - they think ftse is something you do before a shag

Question is - Should I sell them a £180.00 a month endowment and get paid 3 grand for an evenings work, or should I explain that there are alternatives that may look more expensive initially but that at the end of 25 years their mortgage will be paid off?

In your burger king story - would you be best pleased if you had never bought food before and then some BK gimp told you that a whopper was the only food that existed, that you would never be hungry after eating one and that it was a bargin at 50 quid?

Thanks for the info

Will have to sort it out this weekend

Good for you :) This story should be called "Commission based salesmen in talking bullsh!t shock".

They're just salesmen and all they need to do is find people who know even less than they do about investing. And then BS them :) Odd how they never have the chart that shows what 1.5% pa 'fees' do to your money over time...