Think It's Bad in England?
Those of you who think that you are having a tough time in England, trying to claim redress for an underperforming endowment policy; should spare a thought for those living in Scotland.
It seems that the only channel Scottish endowment holders can take, when claiming compensation, is to use a solicitor to make a case against the original solicitor who mis-sold the policy.
In Scotland it is solicitors who handle property sales.
The Financial Ombudsman Service (FOS) cannot help, as solicitors advising on investments only came under the Financial Services Authority in December 2001.
The Law Society of Scotland can only order a solicitor to pay compensation up to a mere £1000, so they are not much use.
I hold the view that it is not so much the IFA that should be blamed, but the life assurance company that created this underperforming worthless product.
In my view tha the Sale of Goods Act should be invoked, after all these endowments were sold like TV's and cars, noting that the product is "not fit for purpose".
Tuesday, October 05, 2004
Monday, October 04, 2004
What is The Worst Criminal Act? Car Theft, or Mis-selling an Endowment Policy?
An interesting report is due to be published later this month by the Crime and Society Foundation, a new criminal justice think-tank.
The report claims that official crime statistics are not a reliable indicator of the true level of offences.
One section of the report refers to the damage done to society as a whole, by the mis-selling of endowment mortgages. Quote:
"A prolific car thief might blight the lives of tens of hundreds of people. The mis-selling of endowment policies has blighted the lives of many thousands...".
As many of us have long suspected, despite what the FSA and life assurance companies pretend, the mis-selling of endowment policies was bordering on the criminal.
Are we likely to see any arrests?
An interesting report is due to be published later this month by the Crime and Society Foundation, a new criminal justice think-tank.
The report claims that official crime statistics are not a reliable indicator of the true level of offences.
One section of the report refers to the damage done to society as a whole, by the mis-selling of endowment mortgages. Quote:
"A prolific car thief might blight the lives of tens of hundreds of people. The mis-selling of endowment policies has blighted the lives of many thousands...".
As many of us have long suspected, despite what the FSA and life assurance companies pretend, the mis-selling of endowment policies was bordering on the criminal.
Are we likely to see any arrests?
Sunday, October 03, 2004
Saturday, October 02, 2004
Red Alert High Risk of Shortfall
That is the opening line of the letter that I received today, from the life assurance company that "manages" my two endowment policies.
This "red alert" is in respect of my second endowment policy taken out in 1991, and due to expire in 2012.
The policy was originally meant to cover a mortgage of £39700.
Today's "prediction" shows that it is likely to produce a shortfall of up to £14500, that is about 36% of the target amount.
How these people can call themselves professionals is beyond me.
The letter then helpfully suggests that I may need to take action, other than just suing the idiots who designed this worthless product.
To add insult to injury, one of their suggestions is that I may like to top up my endowment plan.
Who are they trying to kid?
Having been castigated by the press, the FSA and the Treasury Select Committee for mis-selling worthless products; our ever resourceful "professionals" now seek to make another quick buck, by trying to persuade people to put more money into these underperforming white elephants.
This strikes me as being another blatant example of mis-selling.
That is the opening line of the letter that I received today, from the life assurance company that "manages" my two endowment policies.
This "red alert" is in respect of my second endowment policy taken out in 1991, and due to expire in 2012.
The policy was originally meant to cover a mortgage of £39700.
Today's "prediction" shows that it is likely to produce a shortfall of up to £14500, that is about 36% of the target amount.
How these people can call themselves professionals is beyond me.
The letter then helpfully suggests that I may need to take action, other than just suing the idiots who designed this worthless product.
To add insult to injury, one of their suggestions is that I may like to top up my endowment plan.
Who are they trying to kid?
Having been castigated by the press, the FSA and the Treasury Select Committee for mis-selling worthless products; our ever resourceful "professionals" now seek to make another quick buck, by trying to persuade people to put more money into these underperforming white elephants.
This strikes me as being another blatant example of mis-selling.
Friday, October 01, 2004
Endowment Crisis Spreads
It seems that it is not only the hapless home owners in the UK, who are suffering from being mis-sold non performing endowment polices.
The cancer of this financial scandal has spread to the Republic of Ireland.
It is reported by RTE that the Irish Financial Services Regulatory Authority, has strongly urged anyone who believes that they were mis-sold an endowment mortgage to complain to the companies who sold them these white elephants.
It seems that out of the 90000 polices sold in Ireland, most endowment mortgage holders have been told that their policies will have shortfalls.
Well, I wish them luck.
Doubtless they will encounter the same instrasigence, and evasion, that the UK holders have encountered as they try to claim redress.
It seems that it is not only the hapless home owners in the UK, who are suffering from being mis-sold non performing endowment polices.
The cancer of this financial scandal has spread to the Republic of Ireland.
It is reported by RTE that the Irish Financial Services Regulatory Authority, has strongly urged anyone who believes that they were mis-sold an endowment mortgage to complain to the companies who sold them these white elephants.
It seems that out of the 90000 polices sold in Ireland, most endowment mortgage holders have been told that their policies will have shortfalls.
Well, I wish them luck.
Doubtless they will encounter the same instrasigence, and evasion, that the UK holders have encountered as they try to claim redress.
Wednesday, September 29, 2004
Heads You Lose, Tails You Lose
It seems that those of us who are trying to get compensation for mis-sold endowment policies, are having even more obstacles placed in our way.
The Herald reports the case of one of their readers who managed to obtain a judgement in his favour from the Ombudsman service. However, there was a small problem, the company against which the judgement was made no longer was in business; as it had wound itself up.
The Ombudsman can only enforce orders against companies that are in existence, and the Financial Services Compensation Scheme (FSCS) can only help where the firm has gone out of business; not where the firm has voluntarily ceased trading.
The result being that the hapless policy holder is no nearer gaining compensation.
This is just one of many stories, in the progressively worsening endowment policy scandal, that shows how the system is weighted against the individual who tries to claim redress.
To use a technical term here, it "Sucks, big time!"
It seems that those of us who are trying to get compensation for mis-sold endowment policies, are having even more obstacles placed in our way.
The Herald reports the case of one of their readers who managed to obtain a judgement in his favour from the Ombudsman service. However, there was a small problem, the company against which the judgement was made no longer was in business; as it had wound itself up.
The Ombudsman can only enforce orders against companies that are in existence, and the Financial Services Compensation Scheme (FSCS) can only help where the firm has gone out of business; not where the firm has voluntarily ceased trading.
The result being that the hapless policy holder is no nearer gaining compensation.
This is just one of many stories, in the progressively worsening endowment policy scandal, that shows how the system is weighted against the individual who tries to claim redress.
To use a technical term here, it "Sucks, big time!"
Monday, September 27, 2004
What the Life Assurance Firms Don't Want to Tell You
The real reason that the endowment polices have failed, in my view, is that when they were designed by the bright boys in the life assurance industry they had a number of fatal flaws built into them.
Life assurance firms are "experts", so they would have us believe, in risk management. They try to ensure that risks are accounted for, minimised and spread.
What the "bright boys" did when they designed these non performing endowment white elephants, was to spread the risk around the hapless purchasers. They were safe in the knowledge that with 8 million sales, they could spread the risk with little collateral damage to themselves.
They assumed that, in the "unlikely event" that the polices did not perform as well as expected, no one individual would be so out of pocket that they could afford to, or be bothered to complain.
The trouble is, they never bothered telling the hapless endowment policy holder that they were spreading the risk in this manner; nor indeed will they admit to it today.
The other problem is that the polices were very poorly designed; and that the extortionate commission payments extracted from them at the begining, effectively killed the product at birth.
Again, something that they will not admit to.
The final flaw in their great design was the fact that, having spread the risk, with a £40BN shortfall being faced by 8 million people; they know that there is now a massive incentive to complain, yet there is no way that they can ever admit to 8 million people that they were sold "a pup".
Now it is up to the 8 million of us to make them face the consequences.
The real reason that the endowment polices have failed, in my view, is that when they were designed by the bright boys in the life assurance industry they had a number of fatal flaws built into them.
Life assurance firms are "experts", so they would have us believe, in risk management. They try to ensure that risks are accounted for, minimised and spread.
What the "bright boys" did when they designed these non performing endowment white elephants, was to spread the risk around the hapless purchasers. They were safe in the knowledge that with 8 million sales, they could spread the risk with little collateral damage to themselves.
They assumed that, in the "unlikely event" that the polices did not perform as well as expected, no one individual would be so out of pocket that they could afford to, or be bothered to complain.
The trouble is, they never bothered telling the hapless endowment policy holder that they were spreading the risk in this manner; nor indeed will they admit to it today.
The other problem is that the polices were very poorly designed; and that the extortionate commission payments extracted from them at the begining, effectively killed the product at birth.
Again, something that they will not admit to.
The final flaw in their great design was the fact that, having spread the risk, with a £40BN shortfall being faced by 8 million people; they know that there is now a massive incentive to complain, yet there is no way that they can ever admit to 8 million people that they were sold "a pup".
Now it is up to the 8 million of us to make them face the consequences.
Friday, September 24, 2004
On The Ropes?
Legal and General (L&G) continue to be kicked around the courtroom, in their appeal against the FSA £1.1M fine for endowment mis-selling.
In the latest spat it is reported that Ian Malcolmson, an L&G customer, told the hearing it was never explained to him that the endowment policy might not pay off the mortgage in full.
Mr Malcolmson felt that, despite being given a booklet outlining some of the risks, he would have expected the sales adviser to give him a verbal explanation of the risk of a shortfall; rather than putting the warning in "small print".
This seems to have been the normal practice with the sales of these underperforming white elephants, the salesmen never could quite bring themselves to speak of the risks involved; or indeed the sizable chunk being taken out of the profits by the commission payments.
Legal and General (L&G) continue to be kicked around the courtroom, in their appeal against the FSA £1.1M fine for endowment mis-selling.
In the latest spat it is reported that Ian Malcolmson, an L&G customer, told the hearing it was never explained to him that the endowment policy might not pay off the mortgage in full.
Mr Malcolmson felt that, despite being given a booklet outlining some of the risks, he would have expected the sales adviser to give him a verbal explanation of the risk of a shortfall; rather than putting the warning in "small print".
This seems to have been the normal practice with the sales of these underperforming white elephants, the salesmen never could quite bring themselves to speak of the risks involved; or indeed the sizable chunk being taken out of the profits by the commission payments.
Tuesday, September 21, 2004
About Time!
It is reported that the Financial Services Authority (FSA) has been asked to investigate the reward schemes of financial advisers; apparently there are concerns that the commissions and bonuses could affect the advice given, and encourage the mis-selling of financial products.
Now it seems to me that the hapless holders of the splendidly underperforming, and useless, endowment products sold some 10 or more years ago could have told them that.
The Consumers Association has asked the FSA to investigate how products are sold, and the level of commissions paid.
It has also requested that senior directors of financial firms be held accountable for the actions of their employees, and lose their own annual bonus if the firm is fined by the FSA for malpractice.
Now that is a good idea!
In other news, it is reported that a few hundred advisers at Bradford & Bingley are about to quit; as a protest against their new commission policy, which requires them to sell a set number of policies every year.
If they don't hit the target, they don't get a commission.
Bradford & Bingley (B&B) claim that B&B would never encourage staff to give misleading information.
It is certainly long overdue, that the FSA investigates the commission structure of the life assurance companies.
It is reported that the Financial Services Authority (FSA) has been asked to investigate the reward schemes of financial advisers; apparently there are concerns that the commissions and bonuses could affect the advice given, and encourage the mis-selling of financial products.
Now it seems to me that the hapless holders of the splendidly underperforming, and useless, endowment products sold some 10 or more years ago could have told them that.
The Consumers Association has asked the FSA to investigate how products are sold, and the level of commissions paid.
It has also requested that senior directors of financial firms be held accountable for the actions of their employees, and lose their own annual bonus if the firm is fined by the FSA for malpractice.
Now that is a good idea!
In other news, it is reported that a few hundred advisers at Bradford & Bingley are about to quit; as a protest against their new commission policy, which requires them to sell a set number of policies every year.
If they don't hit the target, they don't get a commission.
Bradford & Bingley (B&B) claim that B&B would never encourage staff to give misleading information.
It is certainly long overdue, that the FSA investigates the commission structure of the life assurance companies.
Sunday, September 19, 2004
More Misery
The 350,000 of you who hold endowment policies with Scottish Life, will be feeling even worse about your underperforming policies.
Scottish Life have cut their payouts on their "with profits" polices, for the second time this year.
The polices are now so, I will use an accounting term here, "crappy" that they are not even keeping pace with inflation.
The returns on the Scottish Life polices are a "staggering" 1.1% (inflation is around 2.5%), the FTSE has grown by 6% since January 2004.
Well done lads, are you proud of your product?
Now, Scottish Life (and indeed all the other "professional" life assurance companies) claim that the cuts are to "smooth" the returns on the policies; as a result of the falls in the FTSE between 2000 and 2001.
I would like to ask the following:
Aside from those two years, the FTSE has performed quite well over the past decade (allegedly the longest "bull run" in living memory); where the hell has the money gone?????
The 350,000 of you who hold endowment policies with Scottish Life, will be feeling even worse about your underperforming policies.
Scottish Life have cut their payouts on their "with profits" polices, for the second time this year.
The polices are now so, I will use an accounting term here, "crappy" that they are not even keeping pace with inflation.
The returns on the Scottish Life polices are a "staggering" 1.1% (inflation is around 2.5%), the FTSE has grown by 6% since January 2004.
Well done lads, are you proud of your product?
Now, Scottish Life (and indeed all the other "professional" life assurance companies) claim that the cuts are to "smooth" the returns on the policies; as a result of the falls in the FTSE between 2000 and 2001.
I would like to ask the following:
Aside from those two years, the FTSE has performed quite well over the past decade (allegedly the longest "bull run" in living memory); where the hell has the money gone?????
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