My new letter as promised:
I wish to make a claim for financial redress in respect of a ***(edited out) endowment policy sold to me, in August 1987, by ***(edited out) the estate agents.
The basis of my claim is as follows:
The Mortgage Services Partner of *** advised me that the endowment would produce a surplus in excess of the mortgage which would be tax free.
The Partner did not explain that there was a risk.
There was no mention of the funds that my endowment would be invested in.
The Partner did not enquire as to my attitude to risk.
The Partner did not discuss the fees and charges on the policy.
There was no fact find completed during the sales process.
Other options for paying off the mortgage were not discussed.
Please be advised that I have already written to *** along these lines. They reject the claim citing, amongst others, the fact that the Financial Services Act had not yet come into force at this stage. I reject their reasoning on a number of grounds; including, but not limited to, the following:
Whether the FSA has jurisdiction, or not, over policies purchased before April 1988 is irrelevant. I was told that there would be a tax free surplus over and above the mortgage sum borrowed. There is now a projected shortfall, as advised by ***, of £10500 assuming a 4% growth rate.
I draw your attention to the case summarised in The Times (26 October 2002); whereby David Barker cited a 1965 Court of Appeal judgement by Lord Denning which ruled that a verbal statement which induced someone to take out a contract could be considered to be a warranty. Mr Barker was successful in obtaining compensation from the Halifax for the shortfall in his policy.
The fact that the Financial Services Act came into force eight months after **** sold me the endowment does not alter the key question as to whether best practice, from both an ethical and industry-wide perspective, was followed when the policy was sold.
A well regulated ethical company would have been aware of the forthcoming legislation, and would have ensured best practice procedures were in place prior to its implementation; to ensure that the key issues raised by the legislation were addressed.
As to whether the under-performance of the endowment policy could have been foreseen, or not, is irrelevant. The issue is whether the policy was mis-sold, or not, it is my contention that it was mis-sold.
I believe that the Sale of Goods act also applies, namely that the policy was sold as a “product” that would cover my mortgage debt, not as an investment. This “product” has been shown to be not “fit for purpose”; and as such the shortfall should be compensated by the agent (****) or the product “manufacturer” ****.
I completed the Financial Ombudsman Endowment Mortgage Questionnaire, which I despatched in November. They have advised me that I should raise this matter with the product provider; ie yourselves. To this end please be advised that I have enclosed the following:
The Endowment Questionnaire.
My letter to **** raising the complaint (dated 11 October 2002).
**** acknowledgement of receipt (dated 21 October 2002).
The rejection from **** Compliance and Quality Control Director (dated 28 October 2002).
My response to their rejection (dated 4 November 2002).
***** acknowledgement of this (dated 7 November 2002).
Please feel free to contact me if you require further information.
Please be advised that since September I have maintained a public diary of my efforts to obtain redress, on my website http://www.kenfrost.com. Additionally, I have copied this letter to The Times.
Thank you in advance for your time and assistance in this matter.
Isn't this fun!