Legal Loophole Helps Scots
An estimated 100,000 Scots homeowners, who missed the deadline for lodging endowment mis-selling claims, may still be eligible for compensation.
That at least is the view of Gerry Diamond, of the Endowment Compensation Centre, who has discovered a possible legal loophole which may help those who bought policies from Scottish providers including; Standard Life, Scottish Widows and Scottish Amicable.
Mr Diamond believes that the tree year time limit imposed by the Financial services Authority (FSA) is illegal in Scotland, because Scots law allows five years to challenge unfair contracts.
Quote:
"This means that people should have two more years to claim than the three-year FSA rule that is currently applied by many sellers of endowment policies."
It is estimated that over 400,000 Scots have been mis-sold endowment policies.
As I keep saying, all of this trouble could be stopped here and now if the life assurance companies "stepped up to the plate" and underwrote these useless underperforming products.
Saturday, December 02, 2006
Monday, November 20, 2006
Compensation Payments Stalled
Compensation Payments Stalled
It seems that, according to endowment claims company Brunel Franklin, consumers who were mis-sold underperforming and useless endowment policies are being kept waiting weeks/months for their compensation cheques to arrive.
Why?
Seemingly the financial institutions are struggling to cope with a flood of complaints, and some are stalling payouts to successful claimants.
Ian Allison, claims director for Brunel Franklin, said:
"It is wholly unreasonable to wait two months or more for your compensation payout when the figures have already been agreed and the offer accepted by the client. At this point there is no reason why the claim can't be settled within a few days."
It is hardly surprising that the financial services industry in Britain has such a lousy reputation, and that the ordinary man in the street no longer has any trust in it.
It is also worth noting that many in the financial services industry in the City will enjoy massive six figure bonuses this year end. Maybe they would like to use some of their windfalls to help out those who will be suffering shortfalls on their endowment polices?
Yes, that will happen!
It seems that, according to endowment claims company Brunel Franklin, consumers who were mis-sold underperforming and useless endowment policies are being kept waiting weeks/months for their compensation cheques to arrive.
Why?
Seemingly the financial institutions are struggling to cope with a flood of complaints, and some are stalling payouts to successful claimants.
Ian Allison, claims director for Brunel Franklin, said:
"It is wholly unreasonable to wait two months or more for your compensation payout when the figures have already been agreed and the offer accepted by the client. At this point there is no reason why the claim can't be settled within a few days."
It is hardly surprising that the financial services industry in Britain has such a lousy reputation, and that the ordinary man in the street no longer has any trust in it.
It is also worth noting that many in the financial services industry in the City will enjoy massive six figure bonuses this year end. Maybe they would like to use some of their windfalls to help out those who will be suffering shortfalls on their endowment polices?
Yes, that will happen!
Monday, November 13, 2006
The Endowment Mortgage Crisis
The Endowment Mortgage Crisis
It is not with any exaggeration that the mis-selling of mortgage endowment policies is being described by many as the worst financial scandal in Britain of the last 30 years.
However, quite disgustingly the life assurance industry has done its best to wipe it hands of the matter; by trying to apportion blame on those who took out these useless underperforming products.
It is estimated that around 2.2 million people are facing shortfalls averaging £7,000.
The average payout on a £50 monthly 25-year policy has halved from £98,000 in 1992 to just £48,000 today.
Companies guilty of mis-selling have already paid out 2.3BN in compensation to over 1.5 million people.
The House of Commons Treasury Select Committee conducted an investigation into mortgage endowment mis-selling and issued a damning indictment of the industry.
The Chairman, John McFall, said:
"The effects of mortgage endowment mis-selling will be felt for at least another 10 years as these policies fall due for repayment.
It is absolutely vital that homebuyers who were mis-sold lodge a claim for compensation before the time bars come down.
Otherwise they will have even greater difficulty coping with payment shortfalls.
The lesson for the financial services industry is to be always simple and straightforward in its future dealings with the public.
I hope that going forward they have learned from this cathartic experience."
The lesson has clearly not been learned, as the life assurance industry is refusing to do the one thing that would restore people's faith in it, and eliminate the crisis that is causing misery to millions, namely underwrite these useless products.
It is not with any exaggeration that the mis-selling of mortgage endowment policies is being described by many as the worst financial scandal in Britain of the last 30 years.
However, quite disgustingly the life assurance industry has done its best to wipe it hands of the matter; by trying to apportion blame on those who took out these useless underperforming products.
It is estimated that around 2.2 million people are facing shortfalls averaging £7,000.
The average payout on a £50 monthly 25-year policy has halved from £98,000 in 1992 to just £48,000 today.
Companies guilty of mis-selling have already paid out 2.3BN in compensation to over 1.5 million people.
The House of Commons Treasury Select Committee conducted an investigation into mortgage endowment mis-selling and issued a damning indictment of the industry.
The Chairman, John McFall, said:
"The effects of mortgage endowment mis-selling will be felt for at least another 10 years as these policies fall due for repayment.
It is absolutely vital that homebuyers who were mis-sold lodge a claim for compensation before the time bars come down.
Otherwise they will have even greater difficulty coping with payment shortfalls.
The lesson for the financial services industry is to be always simple and straightforward in its future dealings with the public.
I hope that going forward they have learned from this cathartic experience."
The lesson has clearly not been learned, as the life assurance industry is refusing to do the one thing that would restore people's faith in it, and eliminate the crisis that is causing misery to millions, namely underwrite these useless products.
Tuesday, November 07, 2006
Another Scandal In The Making
Another Scandal In The Making
The FT reports that first-time buyers and others are taking out interest-only mortgages, with no identified means of capital repayment.
This leaves them dangerously exposed to financial calamity, or being forced to trade down the property ladder to pay off their mortgage.
The increase in interest-only home loans has led to fears of another endowment style mis-selling scandal.
The Financial Services Authority (FSA) has noted that interest-only mortgages are one of the top "emerging retail risks" and drew attention to "an increasing number of mortgages.. with the lender not recording that there was a linked repayment vehicle in place".
People are in danger of mortgaging their future, without any hope of paying off the debt. A very foolish thing to do.
The FT reports that first-time buyers and others are taking out interest-only mortgages, with no identified means of capital repayment.
This leaves them dangerously exposed to financial calamity, or being forced to trade down the property ladder to pay off their mortgage.
The increase in interest-only home loans has led to fears of another endowment style mis-selling scandal.
The Financial Services Authority (FSA) has noted that interest-only mortgages are one of the top "emerging retail risks" and drew attention to "an increasing number of mortgages.. with the lender not recording that there was a linked repayment vehicle in place".
People are in danger of mortgaging their future, without any hope of paying off the debt. A very foolish thing to do.
Thursday, October 19, 2006
Endowment Misery Continues
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.
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.
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.
Friday, September 29, 2006
Negligence Claims Rise
Negligence Claims Rise
A survey carried out by Alexander Forbes International, notes that claims and notifications against professionals rose sharply, climbing to 603 in 2005-06, from 452 a year earlier.
The largest factor in that rise can be accounted for by claims for incorrect endowment advice, which rose to 20% from 12%.
Executive director Mark Bracher said:
"An increasing number of home owners are finding that their endowment policies will fail to pay off their mortgages and they are seeking recompense from their accountants for negligent advice.
This has been compounded by a number of specialised claims farmers who have made a business of encouraging home owners to seek compensation from their advisers."
This problem would be solved at the stroke of a pen, if the life assurance companies agreed to underwrite these useless underperforming products.
A survey carried out by Alexander Forbes International, notes that claims and notifications against professionals rose sharply, climbing to 603 in 2005-06, from 452 a year earlier.
The largest factor in that rise can be accounted for by claims for incorrect endowment advice, which rose to 20% from 12%.
Executive director Mark Bracher said:
"An increasing number of home owners are finding that their endowment policies will fail to pay off their mortgages and they are seeking recompense from their accountants for negligent advice.
This has been compounded by a number of specialised claims farmers who have made a business of encouraging home owners to seek compensation from their advisers."
This problem would be solved at the stroke of a pen, if the life assurance companies agreed to underwrite these useless underperforming products.
Thursday, September 14, 2006
Nationwide and Portman To Merge
Nationwide and Portman To Merge
Nationwide and Portman building societies announced on Tuesday that they plan to merge. They claim that they intend to provide a "compelling alternative to the big retail banks".
Portman members will receive a booklet explaining the planned merger, before the building society's Spring 2007 AGM. They will be asked to vote on the proposals. Nationwide members do not have anything to do.
If the vote goes in favour of the merger, it is planned to be finalised by September 2007.
Qualifying members of Portman will receive a pre-tax windfall worth a minimum £200, if the merger goes ahead. Only members who had a minimum of £100 in savings, or a balance of £100 on a mortgage, at the close of business on 11 September will qualify.
Nationwide members will not receive a windfall.
Nationwide and Portman building societies announced on Tuesday that they plan to merge. They claim that they intend to provide a "compelling alternative to the big retail banks".
Portman members will receive a booklet explaining the planned merger, before the building society's Spring 2007 AGM. They will be asked to vote on the proposals. Nationwide members do not have anything to do.
If the vote goes in favour of the merger, it is planned to be finalised by September 2007.
Qualifying members of Portman will receive a pre-tax windfall worth a minimum £200, if the merger goes ahead. Only members who had a minimum of £100 in savings, or a balance of £100 on a mortgage, at the close of business on 11 September will qualify.
Nationwide members will not receive a windfall.
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