The Endowment Diary

The Endowment Diary


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

Friday, March 19, 2004

I received a call from the complaints company handling my claim for the mis-selling of my second endowment policy.

In short, they cannot handle a claim that has already been rejected by the Financial Ombudsman Service.

In view of this, I would therefore question the rationale of anyone using these claims companies.

Presenting a claim to the companies that sold these polices, and then to the Ombudsman is free. However, if you use a claims company they will charge 20-30% of your compensation if they succeed.

To my view, the only reason to use these claims companies is if you have exhausted all other “zero cost” avenues of complaint. However, they do not seem to wish to pursue cases that have already been rejected.

Therefore, in my opinion, they add no value.

That being said, I did discuss the general situation regarding compensation with them. It seems that, in their view, the companies that sold these under performing products are becoming increasingly rigid in their interpretation of what constitutes a justifiable claim.

The claim company was of the opinion that the endowment providers are doing everything possible to avoid paying compensation. My own experiences, and the letters that I have received from fellow policy holders, seem to endorse this view.

I do not regard this as the end of the line in respect of my claim for the mis-selling of my second endowment. I have some other avenues that I intend to explore.

One being, and this no doubt sounds “barking mad”, is to consider the possibility of pursuing a class action via the USA.

No I have not gone mad; the European creditors of Parmalat (the Italian diary company that is Europe’s Enron - please see my article in “In Your Face” entitled “Parmalat Europe’s Enron”) are pursuing a class action against Parmalat Italy, using Milberg Weiss an American legal firm.

My view is that if the creditors of Parmalat can do this; then the 6 million policyholders, who face a £40BN shortfall, ought to be able to do it as well.

My research into the viability of pursuing this may take some time, I am of course happy to hear from anyone who has already taken this route.

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