Issue with payment of endowment policy on mortgage

[MrsExpo]

This is a situation a family friend (Ben) finds himself in and has no idea how to proceed and whether he's entitled to any sort of payment.

A number of years ago Ben was in a relationship with a lady (Sue) to whom he was engaged. They purchased a house together with an endowment mortgage. He paid the mortgage payments and she paid the endowment premiums. The mortgage payments were significantly more per month than the premiums. They never married and eventually split up. Sue moved out taking cars, furniture and other items with her, most of which had been paid for by Ben. Ben remained in the house for around a year paying the mortgage, before selling it, paying off the mortgage and moving away. After the mortgage and costs had been paid, there's was a nominal sum remaining. Sue continued to pay the endowment even though Ben told her the mortgage was paid off.

Fast forward 15 years and the endowment company was taken over. They contacted Ben to inform him he was a shareholder (news to him) and gave him details of how to cash in the shares. As part of the consequent correspondence Ben discovered that the endowment had been paid up in full some years earlier and provided him with copies of the documentation. He then saw that Sue had claimed the whole of the sum and had forged his signature on the documents in order to do so. He had no knowledge of this and was not contacted by the insurance company at this time.

He now wants to know if a) this constitutes an illegal act on Sue's part and b) whether he ought to be entitled to any of the payout or share in the proceeds.

The policy was in both names, he paid the mortgage payments in full. He now lives in somewhat difficult personal circumstances and if he were entitled to any of the money it would make a significant difference to him.

Any thoughts, advice or ideas on how to proceed would be much appreciated. Sorry this is a bit ling and thanks for reading.

(a) yes, fraud / obtaining a pecuniary advantage by deception and a number of others
(b) that depends on the original agreement between him and Sue

pursue criminal charges then (depending on the time scale since the endowment was cashed in and when Ben became aware of it - 6 year statute of limitations) use the result of the criminal action to base a civil claim upon.

Thanks Katy. It was cashed in around 8 years ago, but Ben only became aware of the issue in February of this year. Does the 6 years run from the date of the deed - when the forms were signed - or from the date Ben became aware of the issue?

Really appreciate your response as he's pretty upset about it. Just trying to help.

if it goes to court, other side will say it runs from date endowment was cashed, and since that was (presumably???) a fixed date from when the policy was originally taken out, Ben should / could have been aware of it so they do have a fighting chance on that even though he only just became aware of it - it was well within his ability to engage with the provider at teh time he paid off the mortgage. He's not been particularly proactive on this. In reality tha tmeans that while criminal charges might stick against Sue IF the provider still has all the copy paperwork with allegedly forged signatures (they may chuck them after the 6 year limitation period expires), Ben might not succeed on a civil claim to get his money back because he failed to do anything about the endowment policy he knew he'd taken out at the time he paid off the mortgage and could / should have done.

He needs to see a solicitor and I'm afraid that whole "free one hour" touted about on MN is a bit of a myth. If he's strapped financially, there are many who will do it on a no win / no fee basis if they think his case is good but they'll take a large share of any winnings.

Oh dear, that doesn't sound great. I'll pass all of that on to him. Thank you again for your comprehensive response.

Whilst it does seem like fraud as far as the signature is concerned, what agreement did they have about the endowment? It seems more likely that Sue stopped paying in to it and just claimed what she'd put in (she has made all the payments).

Did they split the profit from the house evenly? If so, he may have more of a case for the endowment proceeds (if any) as it may not have grown by much more than was paid in depending on when it was started!

It is still fraud, whether or not he can recover what she took by civil action. there is no limitation AFAIK on prosecution for fraud.

It is 6 years from the date when the cause of action arose (the fraud) or 3 years from the date of knowledge, subject to an overall limit of 15 years. Taken from here

It's likely that the endowment was a joint policy with Ben as the first named policyholder, hence he got the shares and not her.

What did he think would happen with the endowment on maturity if Sue was paying into it and he took on the mortgage and house?

How much are the shares worth?

Thanks for all the replies. I've had another chat with Ben and relayed all that f the above to him.

When the house was sold, he wrote to Sue to tell and they agreed that, as she had taken most of the stuff out of it (including two cars, furniture etc) Ben would retain the proceeds of the sale. They agreed at the time that Sue would "deal with" the endowment and Ben assumed she'd cashed it in at that time, but didn't sign anything to that effect.

The shares are worth about £800, so not a huge amount on the scale of things.

The company does still have all the paperwork and have supplied Ben with copies: this is how he knows about the forged signature.

He feels his next action will be an approach to the company explaining the issue and asking for their advice. He also knows Sue's current address so is going to write to her to point out that he is aware of the issue and suggest they "discuss" it. He doesn't seem hopeful that he will benefit in any way from all of this but is angry about the forgery when it was so unnecessary. (Sue knows where he is and could have contacted him at the time, but he feels she didn't do so in case he made some sort of claim on the payout).

A bit of a mess really. I'm just trying to help but have no real idea about the legalities, so am providing tea and sympathy and moral support.

Thank you again to everyone who has replied.

If they agreed to cash it in and he had the proceeds of house sale then I dont really see the problem.