Endowment Misery Continues
Quite unbelievably, even though endowment mortgages have been shown to be the worst fanancial product ever foisted on the unsuspecting British public in living memory, around 40,000 of these useless underperforming products were sold in the first six months of this year. Even worse, around 100,000 were sold last year.
It beggars belief that, despite the lousy performance and negative publicity surrounding these useless products, people are still prepare to fall for the salesman's patter.
It also beggars belief that life assurance companies have the balls to continue to sell them. Clearly money and profits come before reputation and integrity.
A smooth talking salesman can earn a commission equivalent to the first 18 months' premiums, just for selling the policy. He can then continue to get paid annual commission, as long as the hapless endowment owner continues to keep the plan going.
It is little wonder that many people in Britain have lost confidence in the life assurance industry, and the financial services sector as a whole.
Thursday, October 19, 2006
Monday, October 16, 2006
Secret Payments
Secret Payments
It appears that some major financial institutions, that sold the hapless British home owners their useless and underperforming endowment policies, are conducting a secret "payoff" exercise.
Fearful that their already tarnished reputations will be further dragged through the muck and mire, some of Britain's leading financial institutions are paying off endowment holders, so as to avoid fines from the FSA and further reputational damage.
Included on the list of shame are; Barclays, Halifax, Friends Provident and Legal & General. They are reportedly secretly contacting customers, and offering to "review" the way business has been handled.
Pretty pathetic isn't it?
Hardly surprising that people long ago lost faith in the financial services industry in Britain.
It appears that some major financial institutions, that sold the hapless British home owners their useless and underperforming endowment policies, are conducting a secret "payoff" exercise.
Fearful that their already tarnished reputations will be further dragged through the muck and mire, some of Britain's leading financial institutions are paying off endowment holders, so as to avoid fines from the FSA and further reputational damage.
Included on the list of shame are; Barclays, Halifax, Friends Provident and Legal & General. They are reportedly secretly contacting customers, and offering to "review" the way business has been handled.
Pretty pathetic isn't it?
Hardly surprising that people long ago lost faith in the financial services industry in Britain.
Tuesday, October 10, 2006
The Dangers of Interest Only Mortgages
The Dangers of Interest Only Mortgages
As if the endowment selling scandal was not enough for the British housing market and financial system to bear, it seems that we may be heading for another mi-selling scandal of equal proportions.
The FT has published a good article covering the concerns about the latest financial product to be foisted on the unwary first time home buyes, namely interest only mortgages.
Quote:
"First time buyers and cash strapped home owners are scrambling to take out interest only mortgages that could leave them facing financial ruin or forced to trade down the property ladder to pay off their mortgage.
Mortgage lenders' willingness to market interest only home loans has prompted fears that these mortgages could be the cause of the next misselling scandal."
Read the full article here FT.
As if the endowment selling scandal was not enough for the British housing market and financial system to bear, it seems that we may be heading for another mi-selling scandal of equal proportions.
The FT has published a good article covering the concerns about the latest financial product to be foisted on the unwary first time home buyes, namely interest only mortgages.
Quote:
"First time buyers and cash strapped home owners are scrambling to take out interest only mortgages that could leave them facing financial ruin or forced to trade down the property ladder to pay off their mortgage.
Mortgage lenders' willingness to market interest only home loans has prompted fears that these mortgages could be the cause of the next misselling scandal."
Read the full article here FT.
Monday, October 02, 2006
Financial Ombudsman Service Under Pressure
Financial Ombudsman Service Under Pressure
The Financial Ombudsman Service (FOS) is under sever pressure, as it struggles to cope with the 250 endowment complaints that it receives every day.
In theory, according to the FOS, it will deliver a decision on an endowment case within a mind numbingly slow nine months, though complex cases and appealed decisions take longer.
The FOS also claims that an appeal on an FOS decision, should be reviewed in between six to 12 months.
The FOS have recruited 120 more adjudicators and support staff, they now employ 400 people to work on endowment complaints.
As I keep repeating, this whole situation is ridiculous; it could be solved at the stroke of a pen, if the life assurance companies agreed to underwrite these useless underperforming endowment policies.
The Financial Ombudsman Service (FOS) is under sever pressure, as it struggles to cope with the 250 endowment complaints that it receives every day.
In theory, according to the FOS, it will deliver a decision on an endowment case within a mind numbingly slow nine months, though complex cases and appealed decisions take longer.
The FOS also claims that an appeal on an FOS decision, should be reviewed in between six to 12 months.
The FOS have recruited 120 more adjudicators and support staff, they now employ 400 people to work on endowment complaints.
As I keep repeating, this whole situation is ridiculous; it could be solved at the stroke of a pen, if the life assurance companies agreed to underwrite these useless underperforming endowment policies.
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