Time Bar Challenge

Time Bar Challenge

BrunelFranklin.com and CPH Financial Service have launched a legal challenge against the practice of endowment providers using a timebar to prevent claims being made for underperforming endowment policies.

Brunel and CPH have made a request for a judicial review, to establish if setting a time frame in which a complaint must be registered is fair and legal.

At present, endowment providers can "time bar" a complaint if the consumer makes the claim more than three years after they first receive a letter warning them of a "high risk" of shortfall on their policy.

Firms must also send out a "red letter" six months before the deadline, informing the consumer of the impending date.

It is estimated that the number of people affected by time barring exceeds 2 million.

Ian Allison, corporate relations director at BrunelFranklin.com, said:

"This is a very exciting day for us all.

We have been aggressively lobbying against time bars for three years and we are now reaching a point where there is a serious chance of a positive outcome for all those people who have been time barred.

We have always believed the time bar process and the communications with consumers was wrong and fundamentally flawed.

Many customers never received shortfall letters. For those that did, the letters never mentioned the issue of a mis-sale.

The use of these letters therefore to legally start the time bar clock ticking is a disgrace. This was never fair and we believe a judicial review will find in favour of the consumer."

I wish them well with their challenge. The fact remains that the insurance companies will do whatever they can, to avoid taking responsibility for the endowment mortage scandal.

Friends Provident In The Wrong

Friends Provident In The Wrong

In a rare piece of good news, it seems that the thousands of endowment policy holders who have been told that they have run out of time to complain about their useless and underperforming mortgage endowment policies have been offered some hope of compensation.

The Financial Ombudsman Service (FOS) has ruled that Friends Provident was wrong to impose a time limit on an endowment misselling complaint bought by a Mr and Mrs Smith, and has ordered the insurer to reopen their case.

The Smiths are physically disabled, and that has impacted the decisions of the FOS. However, endowment claims and legal specialists reportedly believe that this judgement could impact on all policyholders who have been time barred.

Tim Moore, of EndowmentClaims.com, said:

"This ruling suggests that if policyholders can prove that they were too confused, for whatever reason, to make accurate financial choices that the time bar may be invalid."

Under FSA rules, endowment policyholders who want to complain must do so within three years of receiving a "red" warning letter.

The FOS ruled that the Smiths were too confused to make an accurate decision about their mortgage options, as such the time bar was invalid.

The ombudsman is quoted as saying:

"I take the fact that Mr and Mrs Smith are unable to work as a good indication they may find coping with day to day normal life a challenge, and consider their circumstances are exceptional for the purposes of the mortgage endowment time bar rules."

A "coalition" of endowment claims experts including; Donns Solicitors, Endowmentclaims.com, CPH Financial Advisory Services, Whitehall Randall, and Michael Booth QC is reportedly ready to test whether it can be applied to all policyholders, not just the disabled.

Andrew Hummersone, from Whitehall Randall, said:

"In light of this ruling, our next step will be to send another 10 time barred cases to the FOS.

The minute a claim is rejected we will immediately seek a High Court review, with the aim of confirming once and for all whether time bars have any validity."

As ever with the endowment scandal, the lawyers and claim firms will do very well out of it.

However, as I keep repeating, the best way for all of the parties involved in this disgrace would be for the life assurance companies to do the decent thing and bite the bullet of underwriting these useless underperforming policies.

A "Shabby Habit"?

It seems that Abbey National are allegedly not playing fair with endowment complaints, relating to policies sold before 1988.

According to reports, the Abbey National are automatically rejecting out of hand any complaints made about policies sold pre 1988.

This despite the fact that the Financial Ombudsman Service (FOS) has warned them that they must investigate each case.

According to mortgage complaint handlers, such as Endowment Justice and CPH Financial Advisory Services, 100% of complaints are being rejected by a pro forma letter; which claims that Abbey do not have to establish attitudes to risk, or keep records of what was discussed pre 1988.

Over a year ago the FOS warned banks and building societies that mis-selling still can have occurred pre 1988. Our chums in the life assurance industry, despite attempts to obfuscate over this issue, still owe us the hapless owners of these useless policies a duty of care.

Our chums may now find themselves in hot water over this, as the FOS has reported their names to the FSA.

Abbey denies the allegations.

Will anyone who was sold a policy by the Abbey, pre 1988, and who has managed to gain compensation from them please drop me a note.

I am more than happy to back up Abbey's claim!

The bottom line here is, that if you receive a rejection letter from the company that sold you a worthless policy; don't accept it.

Fight back!