I have sent the following email to Angela Eagle MP, who is on the Treasury Select Committee; they have lambasted the insurance industry this week, as it is estimated that there will be a £100M shortfall on endowment policies.

"..Dear Ms Eagle,

I read with interest your views on endowment policies, expressed in the Treasury Select Committee.

I agree; to my view there are two issues that the FSA, and the insurance industry, seem to be neglecting wrt compensation claims:

1 The policies were sold like TV's and cars; ie as products with a defined purpose, to pay off the mortgage debt, not as investments.

When a car or TV breaks down, and is shown not to be "fit for purpose", the consumer is entitled to a replacemnt or money back.

The endowment policies, whose sole purpose was to pay off a mortgage debt, have been shown to be "not fit for purpose".

2 Why would any rational individual buy an endowment if it were not going to pay off the mortgage?

Taking the above into account, I believe that the industry should compensate the 5 million of us who face a shortfall.

You may be interested to know that I have been keeping a web diary for the last year charting my progress, or lack of it, in claiming redress.

This can be viewed by going to my website http://www.kenfrost.com and going to the "Endowment Diary" section.

Additionally, you may be interested to know that I have registered with the BBC iCan site to express an interest in starting a campaign to claim compensation; it will be interesting to see if others join in.

Please feel free to contact me if you have any queries..."

I have placed my complaint, re my second policy, in the hands of the company who are handling my 1987 policy; nothing ventured, nothing gained!

I have also registered my interest in starting a web campaign for compensation, for the 5 million people who are estimated to be at risk of a shortfall; on the BBC iCan site .

It will be interesting to see if people join in.

I received a reply today from the Ombudsman, in response to my letter dated 28 September (see post 29 September).

In brief, the key points are:

 They apologise for taking so long to respond, and assure me that everything that I have told them has been considered.

 The six week gap, in 1991, between enquiring about the policy and completing the paperwork could have been used for considering the policy (rather than, as it was, being used to negotiate a purchase price reduction for my new apartment).

 The fact that the investment attitude section of A’s application form was not completed does not constitute a mis-sale.

 The fixed mortgage I took out precluded me from using a repayment mortgage; therefore I had to have an endowment.

 They acknowledge that I did indeed make a complaint to them about the first endowment policy I took out. However, as this was before April 1988 there is nothing they can do. Note, their original argument was that they had no record of me complaining to them about the first policy; and so they questioned why I was complaining about the second policy. They have ignored their error, and hidden behind the fact that they do not handle claims pre April 1988.

 They note that, in their mortgage questionnaire, I have assessed my attitude to risk (on a scale of 1-10) as 2-cautious. They consider this to be not “entirely risk averse”; therefore the sale of an endowment is justified (in other words only those who score 1 can complain; a bizarre method of rating, why offer such a wide range of 1-10? Tip to all of you filling these in, score yourselves as 1).

 They repeat the fact that my current modest portfolio of shares, is indicative of my risk attitude in 1991; when I didn’t hold these shares. They also note that in 1991 I held the princely sum of £900 of shares, this indicates that I am prepared to risk my money. To compare my current investment and risk attitude, with my investment and risk attitude of 12 or more years ago is akin to comparing apples to bananas; it is not a valid line of reasoning.

 They have carefully considered the wording of A’s brochure, and note that it is positively worded (the word “assured” appears in the brochure, I would say that is more than just “positive”). They do not consider that it constitutes a guarantee.

 They will not uphold my complaint.

 I will need to provide new evidence/arguments for their opinion to change.

I note that the following paragraphs from my letter of September have been entirely ignored:

“..In conclusion, there would be little point (for any rational individual) in taking out an endowment policy if it were not going to pay off the mortgage.

L&G marketed these polices like cars and TV’s; ie a product with a defined function, namely, to pay off the mortgage. L&G by selling them as a product with a defined function, not as an investment, have by definition mis-sold them. The policy has been shown to be not “fit for purpose” as it will not cover the mortgage; and as with any product, not “fit for purpose”, the supplier should compensate the consumer for defects in manufacture….”

As entertaining as it may be to exchange a further series of letters rebutting their points, akin to a protracted game of tennis, it is clear to me that I can go no further with the Ombudsman service. Therefore having exhausted all routes that I can take by myself, it is time (as Mr Burns of Simpsons fame would say) to “release the hounds”.

I will place this case in the hands of the agency who are handling my other complaint; let’s see if they can get further.

I received an interesting letter today from the company that pursues claims for mis-selling, on a no win no fee basis, as mentioned in my post of 12 September. Their link appears in the advert box on the left.

They initially said that they could not handle a complaint for polcies sold pre April 1998. However, they now believe that "in the light of the change in regulatory attitude" they may now be able to pursue cases pre April 1988.

They have enclosed a form for me to sign to agree to them pursuing this. Since I have nothing to lose, I will fill it in.

I will keep you posted.

In case you are worried that I, or the Ombudsman, have dozed off; fear not.

The Ombudsman has been away on a brief holiday; given the number of people complaining, I am not surprised!

Whilst waiting, I have added some useful links to the menu bar on the left.

Please let me know if there are any other organisations that you would like me to add.

Extract of an email received from the Ombudsman today:

"...Thank you for you letter of 28 September 2003.

I am in the process of reviewing your comments and I have been unable to trace your file relating to your complaint about the policy taken out in 1987. I would be grateful if you could let me have our file reference for this complaint if you have a record of this. Was this complaint actually against A or an Independent Advisor?...."

I dropped them a note with the relevant info.

I received an e mail today from a visitor, who has spent almost two years pursuing a claim for redress.

By all accounts the complaint was turned down a number of times before being upheld.

It then took half a year to receive an offer of compensation.

Those of you who are pursuing your own cases, and feel that it is taking forever, should take heart from the fact that you are not alone. However, it does seem to be a lengthy process; and you need exceptional patience.

Here is an extract of the letter I have sent to the Ombudsman today, in response to their letter received on Saturday:

"Thank you for your letter (dated 26 September) in respect of my complaint against A (Ref ****).

I note the contents, and have the following observations; which I will make in the same order as the points raised in your letter:

 You note that there was a 6 week gap between my enquiry about the policy and completing the paperwork. The inference being, that this delay was due to me taking time to consider the arrangement. The delay was in fact due to a number of problems arising with the sale of my apartment, and the purchase of a new apartment. My time and effort was being devoted to resolving these problems.

 A proceeding with the sale of the endowment despite the non completion of part of the fact find, whether legally mandatory or not, was a breach of their own internal procedures. They have admitted this; as such it constitutes a mis-sale by their own rules and procedures.

 You note that I was already in the process of setting up an interest only mortgage, and that section 19 of the *** form shows that methods of repayment were discussed. I would draw your attention to the fact that I already held an endowment mortgage, which was set up in 1987. The endowment policy taken out in 1991 was to increase the size of my mortgage to finance my apartment move. Section 19 shows that I was offering my existing endowment policy as part of the financing of the increased mortgage, I was not discussing alternatives with a ***.

 You note that I had already held an A policy taken out in 1987. However, A have stated to you that I have not complained about this; and that, based on this statement you question why I am complaining about the 1991 policy. A’s statement to you is incorrect. I have complained to both A and your own organisation about the 1987 policy; the complaint was rejected because the policy was taken out pre 1988. I am at a loss understand why A have “forgotten” this, and have told you that I have not complained. I have copies of all correspondence with both A and yourselves; I am happy to provide you with these should you require them.

 You note that I currently hold shares, and that this indicates that I am an investor who is prepared to take some risk. I would note that when I took out the endowment polices in 1987 and 1991 I did not hold shares. To compare my current investment and risk attitude, with my investment and risk attitude of 12 or more years ago is akin to comparing apples to bananas; it is not a valid line of reasoning.

 You note that there is no guarantee in the A sales brochure that the mortgage will be paid off, and as such the “Denning judgement” is not applicable. I draw your attention to the following paragraph in the brochure:

“By taking out an A Build Up Mortgage plan you can be assured that you are making the right decision…investment into an endowment life assurance policy offers you the prospect of a substantial surplus cash sum after the mortgage has been repaid”.

The use of the word “assured” and phrase “after the mortgage has been repaid” makes it clear that the mortgage will be repaid. I contend that this constitutes a warranty, and that the “Denning judgement” applies.

In conclusion, there would be little point (for any rational individual) in taking out an endowment policy if it were not going to pay off the mortgage.

A marketed these polices like cars and TV’s; ie a product with a defined function, namely, to pay off the mortgage. A by selling them as a product with a defined function, not as an investment, have by definition mis-sold them. The policy has been shown to be not “fit for purpose” as it will not cover the mortgage; and as with any product, not “fit for purpose”, the supplier should compensate the consumer for defects in manufacture.

In view of the above points, I would like to ask you to re-evaluate your conclusion. Please feel free to contact me should you require further information.

Thank you in advance for your time and assistance in this matter...."

I received a 3 page letter from the Financial Ombudsman Adjudicator today, regarding my complaint about the mis-selling of my second endowment.

It states that they will not uphold my complaint, and lays out the reasons why.

Their reasoning, I have to say, is somewhat lacking in intellectual rigour (indeed one point they make could not be more factually incorrect). Their reasons include the following:

 The fact that I took 6 weeks from first starting to arrange the mortgage to actually completing it (the house purchase took longer than expected).

 The incomplete fact find performed by A is not evidence of mis-selling (it does represent a breach of A’s procedures).

 As I now hold shares I am an individual who takes risks (to compare my investment and risk position now with my investment and risk position 12 years ago, when I took the policy out, is absurd).

One particular paragraph of the letter made my jaw drop in amazement:

“I have noted that in 1992, you already held an A endowment policy for a target of ** which had been taken out in 1987. I understand that this was also a “With Profits, Build Up” policy and yet I have been informed by A that you have not complained about this policy. In particular you don’t appear to have questioned the suitability of this product. In view of this, I would question why you have complained that the endowment taken out in 1991 was not suitable for you.”

As those of you who regularly read this diary know, nothing could be further form the truth. I have complained:

 to B who sold me the policy

 to A with whom the policy resides

 and to the Ombudsman.

All 3 stated that, as it was sold in 1987, the current law does not apply; and I have no grounds for redress.

I am at a loss to understand how both A and the Ombudsman could forget this lengthy, and detailed, correspondence.

I will compose a detailed point by point rebuttal over the next few days; and post it to the Ombudsman, and to this site.

Evidently the Ombudsman is so overwhelmed by complaints, that fatigue is setting in; and serious errors are being made.

According to the recent survey carried out by the Consumers' Association; less than half of those people, who complained to the companies who sold them an endowment, bothered to raise the matter further with the FSA if their original claim was rejected.

Come on guys!

If you don't complain you won't get compensation; the companies who sold you the policies, more often than not, need a little "push" from a third party.

It costs nothing, other than a little of your time, to raise the matter with the FSA.

The clock is ticking!