The Endowment Diary

The Endowment Diary


The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Wednesday, June 11, 2003

Extract of emails between myself and a site visitor who dropped me a note yesterday:

Note that this is his opinion:

"Dear Ken:

On the 'new letter' about your endowment, you say - This “product” has been
shown to be not “fit for purpose”

I came to the same conclusion a long time ago - about ALL endowments.

I have been in contact with the authorities about this so-called "mis-selling"
of endowments, both the Financial Services Authority
and Serious Fraud Office.

I honestly believe myself defrauded and I want those responsible to answer for
their crimes in court. But only pay with time in
jail - fines are passed on to innocent shareholders - most unjust.

I kept the documentation from my mortgage lender - shown on
(please visit). It very clear to me that I was

But it is equally clear that everybody else was conned - so I asked the FSA
three very basic questions, number 2 was:

With regard to the basic principle of endowment mortgages: Is it good or bad
financial advice to be told to gamble your house - your
major future fiscal well-being in old age - to bet all this on the stock market?

They would not answer that - instead they used spin to answer with their own
phrase "suitable product" rather than "good advice".

Could the FSA honestly say, under oath in a court of law, that a gamble is the
"suitable product" (in their words) to REPAY the
largest of loans you are ever likely to make in your life?

Fact: You get a mortgage to REPAY your loan. Repayment mortgage does this, it is
fit for this purpose. Endowment is a nothing but a
GAMBLE in the HOPE of repaying loan - you could lose big time - all your
payments and home.

That is reason why everybody was mis-sold endowments - it was NOT FIT FOR

I asked the FSA if I had been defrauded (knowing I was). They refused to answer
- so I made official complaint for their "lack of
integrity". Even though the case was decided in my favour - they still refused
to answer.

I asked the Serious Fraud Office if I had been defrauded. They would not answer
- so I got in touch with the Director of SFO and
accused them of covering up major fraud. Despite a couple of communications back
and to - they still refuse to tell me if I have
been defrauded.

It is my belief that if refuse to answer these simple questions and so actively
assist offenders to escape the law, then they are
perverting the course of justice. The authorities are covering up a major fraud
on the British public purely to protect market
confidence. They are corrupt.

This is my personal informed opinion – I believe it to be the truth. Please let
me know where this differs from your opinion.
Obviously fraud and perversion of justice has yet to be proved in a court of


Many thanks for your note.

The “fit for purpose” argument, to my view, is the heart of the matter.

These products were sold like a TV set or a car, with one main function; to repay the mortgage, and maybe provide a cash surplus as well.

When a car or TV fails (due to substandard workmanship) you get a free replacement or your money back. Consumer legislation, such as the sale of goods act, backs up the rights of the consumer.

In my opinion, since endowments were sold as “products” not “investments” consumer legislation should apply. The question “was the product fit for purpose?” (ie will it pay off the mortgage?) should be applied; the fact that many endowment policies are failing to pay off the mortgages clearly demonstrates that it was not fit for purpose.

In my opinion, as long as endowments are regarded by the regulatory authorities as investments, the endowment holders only course of action is to seek redress through the mis-selling route.

Therefore, the case needs to be made by all endowment holders that endowments were sold as products not investments; this is prima facie mis-selling.

With respect to your complaints to the SFO etc, have you tried taking it to the European Court?


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