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I bought a Mortgage Endowment Plan from xxx xxxx on 1st October 1994 with a maturity date of 1st October 2019. I paid a premium of £140.67 per month. The plan was forecast to have a maturity value of £50,000. The plan included a joint life policy for myself and my wife in the sum of £50,000. I acknowledge that I was sent annual statements from xxx xxxx showing the performance of the Plan over the years and although not happy with the performance of the Plan I was told by xxx xxxx that the plan was a long term investment and could still improve. After the financial crash I was advised to increase my monthly premiums because of a likely shortfall in the plan, but at the time I could not afford to increase the premiums. In 2012 after I retired and had more time I took a greater interest in the Plan's performance I queried the returns being produced with xxx xxxx and although by then very unhappy with the Plan, I found that it would have been impossible to find alternative life cover of £50,000 for my wife and myself and so I continued with the Plan. When my annual Statement arrived in 2012, I calculated that that if I continued to pay the premium of £140.67per month, I would be paying a lot more over the next seven year that the Plan had left to run than I would get in return at maturity. I wrote to xxx xxxx (xxx by then) on two occasions and complained, but was advised that as I had not formally complained in writing by a cut off date imposed by the Bank, that my complain would not be able to be considered. I therefore decided to terminate the plan in June 2012 and received £13,223.89 as a surrender value. I received this from xxxx who by then had taken over the administration of the Plan. Having been reading in the financial press during recents weeks about the compensation that banks are now having to pay out to customers who bought financial products that were obviously wrongly sold, I wondered if there is any avenue for me to still complain about the obviously extremely poor performance of the Plan, which I did make clear to RBS, even though they were not prepared to accept it. I would very much welcome your guidance. Yours sincerely ***** *****
Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
May I ask, aside from the regular statements the banks sent you for the endowment, did the bank write to you informing you that the endowment was underperforming or advising you that it may have been missold at any time?
No. The only thing they advised me was to increase the premiums if I wanted the Plan to proc=duce the return they had initially predicted. The suggested increase was not one I could afford.
Thanks. In order the complaint that an endowment was missold you need to be able to show not just that it under performed, but crucially that you weren't told it may under perform or were otherwise incorrectly advised by the bank. There are two time limits that apply to claims:
The time limits are the longer of six years from the date you purchase the endowment (clearly long expired here) or three years from the date you realised or ought to have realised that the endowment was missold.
Banks have been told by their regulators to write to customers who the bank believes may have been missold some years ago and banks have been calculating timelimits for claims based on the date of these letters. From what you say you may not or did not receive such a letter and if this is the case the banks attempt to impose the time limit they propose may not be successful as their ability to do so will be based on they showing that they did in deed write to you as above three years prior to the date they seek to impose.
Accordingly to make a successful complaint you will need to be able to argue that you only realised that the endowment was missold less than three years prior to the date you make your complaint. Even if you are past the time limit, organisations such as "Endowment Action" are recommending you consider making a complaint if you can for example argue that you did not understand advice a bank claims to have given you which would have enabled you to realise the endowment may have been missold.
Accordingly if you can form an argument that you only realised that endowment was missold less than three years ago or failing which you did not understand information allegedly given to you prior to that period which would have allowed you to determine that you could have made a complaint you may consider making a complaint and claim for compensation. May I outline how to make a complaint or are you already familiar with the process?
Certainly. The first step is to write to your banks complaints department. You will need to collate such paperwork as you have for the endowment. If you are missing any you feel you need, you can ask the bank to forward you copies if necessary under the Data Protection Act. You can consider the following letter template to adapt:
[YOUR NAME AND ADDRESS]
[Name and address of the company who employed the advisor who sold you the policy]
RE: Complaint concerning advice received on endowment mortgage
Endowment policy number [enter number]
Mortgage reference number [enter number]
I am writing to you to make a complaint about the way I was sold my mortgage endowment policy. I believe, for the reasons set out below, that I was mis-sold this policy and am requesting you to investigate the sale. I am also requesting that you send me a copy of my endowment file so that I can see all the documentation you have relating to my case.
An adviser in your company sold me an endowment policy in [enter month and year]. The target amount was [enter amount].
The reasons I am complaining are as follows:
[Here is a list of reasons why the advice you received when you were sold your endowment mortgage may have been bad advice. THINK CAREFULLY about which ones apply to you and delete the ones that don’t. One or more of these may apply to you]
• The endowment was not suitable for me.• The adviser did not properly establish my attitude to risk.• No fact finding was completed during the sales process and therefore the adviser did not have full knowledge of my/our financial situation.• Other options for repaying the mortgage, such as a repayment mortgage, were not discussed with me.• The adviser said the policy would definitely pay off the mortgage and didn’t explain that the amount I would get back was dependant on the performance of the policy.• The adviser said there would be a lump sum payable in addition at the end of the term and did not explain there was a risk the endowment would not meet the target amount.• The adviser did not discuss in full the funds my endowment was to be invested in or the risks involved.• The adviser didn't fully explain the fees and charges or how these would affect the returns on my policy.• The adviser did not explain the endowment was a long-term policy and that I would need to be able to keep up payments over the whole term.• The endowment policy will not mature until after I retire and the adviser didn't check that this would be affordable. The adviser told me not to worry because the endowment would pay off the mortgage before retirement.• I already had an endowment and the adviser told me to cash it in and sold me a new policy.
[Please add here if there is anything else you wish to include to support your complaint]
Please reply to this letter within 14 days and investigate my complaint within the eight weeks allowed to you.
If you are not able to reach a resolution with the bank you are satisfied with which is from what you say likely to be the case here, you can refer your complaint to the Financial Ombudsman without charge. Remembering that if you do consider yourself to be over the three year time frame above that you will need to explain the reasons why you may be late in applying - for example you did not receive any letters from the banks advising you the endowment may have been missold or if you did that you didn't understand them or something of that nature whatever the case may be.
You can complain to the Financial Ombudsman using the following link. Their decision is binding on the bank though not on you and there is no cost associated with referring your complaint so there is in a sense little to lose other than some time in preparing your letter and the complaint.
Have I been able to help you with all your questions on the above?
Do you have any questions on any of the above or does the above give you everything you need for now?
you have been very helpful. Thank you.
I'm glad I could help.
I have been trying to print off your answers to use in my letter to the ombudsman, but can't access anyof it other than your final response. It there a way for me to be able to do it?