The Endowment Diary

The Endowment Diary


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

Thursday, August 24, 2006

Berkeley Independent Advisers Network in Default

Berkeley Independent Advisers Network in Default

The Financial Services Compensation Scheme (FSCS) has declared Berkeley Independent Advisers (BIA) network in default, five months after Tenet acquired it for £700K.

The FSCS said that the decision had been made after receiving 300 claims for compensation from individuals, and after being advised by administrators PricewaterhouseCoopers that it did not have sufficient assets to meet the cost of redress.

Consumers will now be able to receive compensation for alleged poor advice from BIA's advisers in relation to endowment mortgages, investment bonds and personal pensions.

All other regulated financial services firms, including other advisers, will cover the bill for compensating former BIA clients through their annual levy to the FSCS.

Questions are being raised as to the speed with which BIA has been declared in default.

As repeated time and time again on this site, if the life assurance companies just agreed to underwrite their useless underperforming endowment policies much of this pain and extra cost could be avoided.

Failing that people, and the life assurance industry, are going to be saddled with this problem for years to come.

Tuesday, August 22, 2006

2006 Statistics

2006 Statistics

According to the 2005/06 annual review from the Financial Ombudsman Service (FOS), mortgage endowment complaints have fallen very slightly. However, insurance-related disputes are on the increase.

The total number of new cases considered by the Ombudsman in the year ending 31 March 2006 across all financial products increased to 112,923 from 110,963.

New mortgage endowment cases, which accounted for 61% of the total, dropped very slightly from 69,737 at 31 March 2005 to 69,149 a year later. This is the first time the FOS has recorded a decrease in complaints about these useless products since 2003/04.

Hardly a dramatic fall though, and indicative of the sorry regard with which the British public hold the life assurance industry.

Monday, August 14, 2006

Shabby Abbey

Shabby Abbey

Abbey is reportedly still struggling to address and satisfy its endowments problems, some 15 months after Abbey was fined £800K by the Financial Services Authority (FSA) for its poor performance in handling endowment mortgage mis-selling complaints.

According to reports, endowment complaints companies say that paperwork frequently goes missing at Abbey and that their clients are waiting months for a decision from Abbey about their cases.

Keypoint Endowment Claims allege that it has 500 Abbey clients who have all been waiting over 8 weeks for a decision from Abbey. In fact the majority have waited over 3 months.

The FSA rules stipulate that endowment providers must decide whether to uphold or reject a mis-selling complaint within 8 weeks. In the event that they cannot stick to this deadline, they must send a holding letter to complainants. Failure to do this is a breach of the FSA rules, and risks disciplinary action.

John Gardiner, operations director at Keypoint, is quoted as saying:

"Abbey is by far the slowest, most disorganised and inflexible endowment company we deal with.

In more than half of the 500 outstanding cases I have with Abbey, the bank hasn't even sent a holding letter

Abbey is owned by Banco Santander, and was fined £800K last year and ordered to reopen 50,000 mis-selling cases that it had previously rejected.

I repeat, much of this pain and mess could all be stopped if the life assurance companies bit the bullet and underwrote these useless products that we have been lumbered with.