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.
Thursday, July 29, 2004
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!
Monday, June 21, 2004
There is a particularly good article on "This is Money", about the endowment policy mis-selling scandal.
It covers the activities of the Prudential during the 80's and 90's. It seems that in 1993, internal investigations carried out by Prudential uncovered "evidence of widespread activity intended to deceive customers".
To my view it makes damming reading; not just in terms of the activities of the Prudential, but also in terms of highlighting the aggressive selling policy adopted by the life assurance industry at that time.
The article can be read in full at "This is Money".
It covers the activities of the Prudential during the 80's and 90's. It seems that in 1993, internal investigations carried out by Prudential uncovered "evidence of widespread activity intended to deceive customers".
To my view it makes damming reading; not just in terms of the activities of the Prudential, but also in terms of highlighting the aggressive selling policy adopted by the life assurance industry at that time.
The article can be read in full at "This is Money".
Thursday, June 17, 2004
There's a Storm Coming
Those of you holding endowment mortgages, who think that things are bad now, are going to have to steel yourselves for matters to get worse.
It is reported that about 50% of all endowments maturing this year will fail to pay off mortgage debts; this appears to be the straw in the wind of a very unpleasant storm coming our way.
It seems that, according to experts, matters will get worse.
The current estimate is that there will be a shortfall on mis-sold endowment policies of around £40BN.
However, it is reported that Ned Cazalet an insurance analyst at Cazalet Consulting, is predicting that nearly all all mortgage endowment policies that mature after 2008 will miss their targets.
Here are some stats (source Life Insurance Association):
Is it any wonder that people have lost confidence in the financial system in this country?
Those of you holding endowment mortgages, who think that things are bad now, are going to have to steel yourselves for matters to get worse.
It is reported that about 50% of all endowments maturing this year will fail to pay off mortgage debts; this appears to be the straw in the wind of a very unpleasant storm coming our way.
It seems that, according to experts, matters will get worse.
The current estimate is that there will be a shortfall on mis-sold endowment policies of around £40BN.
However, it is reported that Ned Cazalet an insurance analyst at Cazalet Consulting, is predicting that nearly all all mortgage endowment policies that mature after 2008 will miss their targets.
Here are some stats (source Life Insurance Association):
- Norwich Union expects 45% of its 38000 policies maturing this year will not meet target.
- Standard Life expects 47% of its 57000 policies not to meet target this year.
- Scottish Amicable expects 22% of its 18000 policies maturing this year not to meet target.
- Legal and General expects that 25% of its 25000 policies maturing this year not to meet target.
- Scottish Widows expects 67% of its 9000 policies maturing this year not to meet target.
- Abbey Life expects 98% of its 1500 policies maturing this year not to meet target.
Is it any wonder that people have lost confidence in the financial system in this country?
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