The Endowment Diary

The Endowment Diary

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

Wednesday, March 08, 2006

The Danger of False Hope

The Danger of False Hope

Ivan Lewis, Treasury economic secretary, has warned that the thousands of Scots who were mis-sold endowment mortgages by solicitors should not hold out "false hope" of obtaining compensation.

Lewis admitted that it was a scandal that a legal loophole prevented those, who bought a policy through a lawyer before 2001, from seeking financial redress in the event of a shortfall

He is quoted as saying:

"One of the difficulties (with a new financial safety net) is it's not retrospective. I do have great sympathy for people who have been caught out by endowment mis-selling in Scotland but there is a genuine problem."

Scots who bought policies from solicitors before December 1 2001, when the Financial Services and Markets Act came into effect, do not qualify for a deal from the Financial Ombudsman Service.

The solution is for the life assurance companies, that manage these useless policies, to underwrite them.

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