What Goes Up, Goes Up Again
Interest rates went up again yesterday, they now stand at 4.75%. This rise will inevitably negatively impact mortgage rates.
City "experts" predict that the full 0.25% will be passed on to borrowers; with more rate rises likely, mortgage holders face an uncertain future.
This is of course exacerbated by the fact that the shortfalls on the non performing endowment policies are predicted to worsen.
All in all, it is not a very rosy picture.
Friday, August 06, 2004
Monday, August 02, 2004
Another "Little Problem" With Endowment Policies
Those of you who are fed up with holding on to your endowment policies, and are thinking of cashing them in, need to be aware of the latest problem coming to light in the savings industry.
It seems that providers of with profits savings products have thought up another ruse, by which they prevent the poor saps who bought these underperforming policies from collecting what is rightfully theirs.
They make use of Market Value Adjusters (MVA's), which are penalties applied to people who cash in their with profits savings plan early. It seems that the owners of these policies are only just becoming aware of the existence of these penalties; as the companies that operate these polices, and the IFA's that recommended them, failed to tell people of their existence when they bought them.
In the event that you are not happy with being charged a penalty to withdraw from an underperforming and useless endowment policy, then you are at liberty to complain to the Financial Ombudsman.
Good Luck!
Those of you who are fed up with holding on to your endowment policies, and are thinking of cashing them in, need to be aware of the latest problem coming to light in the savings industry.
It seems that providers of with profits savings products have thought up another ruse, by which they prevent the poor saps who bought these underperforming policies from collecting what is rightfully theirs.
They make use of Market Value Adjusters (MVA's), which are penalties applied to people who cash in their with profits savings plan early. It seems that the owners of these policies are only just becoming aware of the existence of these penalties; as the companies that operate these polices, and the IFA's that recommended them, failed to tell people of their existence when they bought them.
In the event that you are not happy with being charged a penalty to withdraw from an underperforming and useless endowment policy, then you are at liberty to complain to the Financial Ombudsman.
Good Luck!
Thursday, July 29, 2004
Petition Launched
The Treasury Select Committee have reported that Britain's financial services industry is failing the consumer; ie that it is "crap".
Those of us holding underperforming endowment policies didn't need the Committee to tell us that, we knew that already!
I have today launched an electronic petition; pointing out that endowments were sold like TV's and cars, not investments. In view of this, it is my belief that issues regarding the mis-selling and underperformance of these policies should come under the remit of consumer legislation not the FSA.
If you would like to view, and sign the petition, please visit Compensation for Endowment Mis-selling.
Spread the word!
Thanks.
The Treasury Select Committee have reported that Britain's financial services industry is failing the consumer; ie that it is "crap".
Those of us holding underperforming endowment policies didn't need the Committee to tell us that, we knew that already!
I have today launched an electronic petition; pointing out that endowments were sold like TV's and cars, not investments. In view of this, it is my belief that issues regarding the mis-selling and underperformance of these policies should come under the remit of consumer legislation not the FSA.
If you would like to view, and sign the petition, please visit Compensation for Endowment Mis-selling.
Spread the word!
Thanks.
Saturday, July 24, 2004
It seems that the Nationwide Building Society has a had a change of heart; regarding its treatment of people who have complained about mis-sold endowment polices, after the three year deadline.
The Treasury Select Committee, investigating the mis-selling of endowment policies, made it clear a month ago that the time bar rule should be discarded.
However, until recently the Nationwide had been disbarring late claimants. Now, following the Treasury Committee ruling and FSA rule changes in respect of warning letters, the Nationwide are reported to be writing to everyone they have time barred offering to investigate their complaints.
The Treasury Select Committee, investigating the mis-selling of endowment policies, made it clear a month ago that the time bar rule should be discarded.
However, until recently the Nationwide had been disbarring late claimants. Now, following the Treasury Committee ruling and FSA rule changes in respect of warning letters, the Nationwide are reported to be writing to everyone they have time barred offering to investigate their complaints.
Tuesday, July 20, 2004
In the unlikely event that the Tories win the next election, Oliver Letwin has said that they will seriously consider shutting down the FSA.
How will this help those of us seeking redress for the mis-selling of endowment policies?
Please feel free to use the "Fax Your MP" box on this site to ask him that question.
How will this help those of us seeking redress for the mis-selling of endowment policies?
Please feel free to use the "Fax Your MP" box on this site to ask him that question.
Friday, July 09, 2004
It is reported that Jeremy Goford, the outgoing president of the Institute of Actuaries, has noted that the present system of commission payments to independent financial advisers (IFA's) must be changed.
He feels that the current system encourages IFA's to sell products that are detrimental to the interests of the consumer.
One fine example of this, as we know, was the sale of endowment policies in the 1980's.
Goford is reported to have said, that it is the role of the actuarial profession to speak out when they see a flaw.
Now let me see, the "flaw" was in place some 20 years go. It has taken him 20 years to speak out.
How much confidence in the actuarial profession, and the financial services sector as a whole, does that give the poor consumer?
He feels that the current system encourages IFA's to sell products that are detrimental to the interests of the consumer.
One fine example of this, as we know, was the sale of endowment policies in the 1980's.
Goford is reported to have said, that it is the role of the actuarial profession to speak out when they see a flaw.
Now let me see, the "flaw" was in place some 20 years go. It has taken him 20 years to speak out.
How much confidence in the actuarial profession, and the financial services sector as a whole, does that give the poor consumer?
Thursday, July 08, 2004
Ever Decreasing Circles
The increased number of complaints about failing endowment policies is causing headaches for the FSA.
Not only has its workload increased massively, but the funds sets aside to compensate people claiming under the financial services compensation scheme seem to be running out.
The scheme is used to compensate people who have lost money from firms that have gone bust.
The FSA is asking for a further £15M, on top of the £33M it acquired a few months ago.
The catch is, and there always is a catch, that the money will be derived from higher subscriptions charged to financial services firms; they, no doubt, will pass these charges on to the long suffering holders of endowment policies.
The increased number of complaints about failing endowment policies is causing headaches for the FSA.
Not only has its workload increased massively, but the funds sets aside to compensate people claiming under the financial services compensation scheme seem to be running out.
The scheme is used to compensate people who have lost money from firms that have gone bust.
The FSA is asking for a further £15M, on top of the £33M it acquired a few months ago.
The catch is, and there always is a catch, that the money will be derived from higher subscriptions charged to financial services firms; they, no doubt, will pass these charges on to the long suffering holders of endowment policies.
Monday, July 05, 2004
The Sunday Times had a good article yesterday, about how some life assurance companies may use questionnaires to invalidate claims by endowment policy holders for mis-selling.
If this is true, then it further undermines what little confidence people may have in the savings industry as a whole; and specifically the life assurance companies handling of endowment complaints.
Maybe the FSA should investigate this issue?
To read the article visit Sunday Times.
I wonder quite how low some organisations are prepared to sink, in order to avoid compensating the hapless holders of endowment policies for the mis-selling scandal of the 1980's?
If this is true, then it further undermines what little confidence people may have in the savings industry as a whole; and specifically the life assurance companies handling of endowment complaints.
Maybe the FSA should investigate this issue?
To read the article visit Sunday Times.
I wonder quite how low some organisations are prepared to sink, in order to avoid compensating the hapless holders of endowment policies for the mis-selling scandal of the 1980's?
Wednesday, June 30, 2004
The latest statistics from the Financial Ombudsman, in respect of complaints about mis-sold endowment polices, make unpleasant reading.
It seems that the number of complaints that the Financial Ombudsman Service (FOS) has received has risen dramatically, from 13570 in 2002/03 to 57917 in 2003/04.
That is more than 1000 complaints per week!
In fact, the number of complaints relating to endowment policies is now so great; that the FOS finds that over half of its workload is now devoted to this single issue.
I recall warning well over a year ago, that the system could well be deluged with complaints; as more people realised that their endowment policies were not going to pay off their mortgages.
It is, of course, expected that the number of complaints will continue to rise.
You can view the full Financial Ombudsman Service report by visiting FOS Report.
It seems that the number of complaints that the Financial Ombudsman Service (FOS) has received has risen dramatically, from 13570 in 2002/03 to 57917 in 2003/04.
That is more than 1000 complaints per week!
In fact, the number of complaints relating to endowment policies is now so great; that the FOS finds that over half of its workload is now devoted to this single issue.
I recall warning well over a year ago, that the system could well be deluged with complaints; as more people realised that their endowment policies were not going to pay off their mortgages.
It is, of course, expected that the number of complaints will continue to rise.
You can view the full Financial Ombudsman Service report by visiting FOS Report.
Wednesday, June 23, 2004
Beware The Compensation Offer
It seems that holders of mis-sold endowment polices have yet another issue to worry about.
Having successfully got through the complaints procedure, and been offered compensation by a "reputable" life assurance company, one would have thought that the policy holder could rest easy.
Unfortunately this does not seem to be the case.
It is reported that some well known life assurance companies are doing everything they can to minimise their compensation payments. They are reportedly making "mistakes" in the awards that they offer successful claimants.
One trick that has been used, is to calculate the compensation up to the date that they sent the first warning letter. Allowing for the lengthy time it takes for the complaint to be made and compensation to be agreed, coupled with compound interest rates, this can make a significant difference to the award amount.
However, the FSA take a different view on this; their rules state that the compensation must be calculated up to the point when the policy holder actually took action to deal with the problem.
In my view, the actions of those life assurance companies who seek to "bend" the FSA rules in this manner are reprehensible to say the least. They are undermining what little credibility the life assurance industry has left, and are leaving people with the impression that life assurance firms are little better than sleazy and underhand con artists.
The lesson here is, as with any financial decision, always take independent financial advice from a properly qualified and reputable adviser before making any financial decision (eg accepting a compensation payment).
Do not assume that the life assurance company have got their sums right!
It seems that holders of mis-sold endowment polices have yet another issue to worry about.
Having successfully got through the complaints procedure, and been offered compensation by a "reputable" life assurance company, one would have thought that the policy holder could rest easy.
Unfortunately this does not seem to be the case.
It is reported that some well known life assurance companies are doing everything they can to minimise their compensation payments. They are reportedly making "mistakes" in the awards that they offer successful claimants.
One trick that has been used, is to calculate the compensation up to the date that they sent the first warning letter. Allowing for the lengthy time it takes for the complaint to be made and compensation to be agreed, coupled with compound interest rates, this can make a significant difference to the award amount.
However, the FSA take a different view on this; their rules state that the compensation must be calculated up to the point when the policy holder actually took action to deal with the problem.
In my view, the actions of those life assurance companies who seek to "bend" the FSA rules in this manner are reprehensible to say the least. They are undermining what little credibility the life assurance industry has left, and are leaving people with the impression that life assurance firms are little better than sleazy and underhand con artists.
The lesson here is, as with any financial decision, always take independent financial advice from a properly qualified and reputable adviser before making any financial decision (eg accepting a compensation payment).
Do not assume that the life assurance company have got their sums right!
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