Has anyone complained about mis-selling of an endowment policy?

[gingerbear]

I have sent a letter off to Life Assurance company. Anyone know what happens next?

I complained about mine gingerbear (sold to me through my bank)......the bank had lost my file so they couldn't prove that I had or hadn't been mis-sold and they upheld my complaint.

It was surprising actually as I used to work for the aformentioned bank.

They have to respond within 5 working days.

They then have 8 weeks to deal with your complaint.

What they will do is look at what happened when you were sold the policy - were alternatives discussed (ie were you aware that you could have repayment mortgage instead of endowment?). What was your attitude to investment risk, and was the fund that your money was invested in suitable for your assessed attitude to risk? Did they make you aware that the policy might not pay off the mortgage - or did they state or imply that it would not only pay it off in full, but would also give you a lump sum.

They should also look at other more "administrative" issues - does the policy run into your (or your partner's) retirement, does the sum assured match the mortgage amount, was the policy written on the correct lives, did you have any other policies that you were encouraged to cancel that could have been used to support a mortgage?

They will look at evidence from the time of the sale (fact find document, application form, illustration), and also should ask you what your recollection is of the sale, as well as the adviser who sold the policy.

If they decide that you were mis-sold the policy, they will redress you so that you are in the position you would have been in if you had not bought the endowment. It's a bit complicated (ie I don't really understand it all myself), but the most common way is they look at how much of a repayment mortgage you would have paid off by now, against the surrender value of the policy, and give you the difference.

Hope that makes some sort of sense - if you've got any other questions, I'll do my best to answer.

thanks emsiewill, it does sound complicated. When we took out the policy, we were not offered the repayment mortgage option. The illustration was based on 8% and 12% growths, but no where in the paperwork can I find anything about risk, nor did the advisor inform us that the mortgage might not be paid off.

We complained about ours and were given quite a wedge. The system is just as emsiewill described and ours was a funny situation too in that paperwork had been lost and not all information was at hand. Our endowment had run for 10 years and we came out with about £3500 compensation. Good luck with your claim .

Does the illustration show that there could be a shortfall at x% growth? It sounds like it was a long time ago that you took it out if the growth rates on the illustration were 8/12%.

Does the paperwork not say things like "bonus rates are not guaranteed" or maturity values "depend on investment returns"? Were you first-time buyers at the time? Had you previously had an endowment mortgage?

For sales that were long ago, the rules about "know your customer" and things like "reasons why" letters were not legally required, but what the people looking at all the evidence should do is look at all of it and weigh it up - but they will give more weight to evidence from the time of the sale, rather than what you recall now (x years later).

Not sure if I'm helping.

It was 12 years ago that we took out the endowment. All the illustration says is, based on x% growth, the target figure will be met.

I had an endowment mortgage with my ex DP, and the endowment was cashed in when we sold the house and split up, but with that one the bank never offered us a repayment mortgage instead of an endowment (this was late 1980's)

DH also had an endowment mortgage on the house he had before we got married - he has complained about misselling on that one too. DH said that everyone he knew in the village who took out a mortgage in the mid to late 1980's had an endowment mortgage - he didn't even know about repayment mortgages.

Well, I think all you can do now is wait and see what they come up with. Hopefully, if you understand the process a bit better, it will help you understand when they reply. If you are not happy with their reply, you can go to the FOS (Financial Ombudsman Service) - they will tell you about that in their letter when they have made a decision.

I'm happy to try and help more once you have your reply (if I can). Just give me a shout.