Mis-Selling Claims - Frequently Asked Questions
- How would I know if I was mis-sold my endowment policy?
- How long does a mis-selling case take to resolve?
- Should I wait to see if my situation improves or is there a deadline for complaining?
- Does it make a difference if the policy was cashed in\surrendered, sold, or the policy term as now ended?
- If my complaint was turned down do I get a second chance?
- Can I not make my own complaint?
- How much will I get?
- Am I guaranteed to get compensation?
- Can I go straight to the Ombudsman?
- What if my endowment is now used just for savings and not linked to a mortgage?
- Am I unable to claim because I bought the policy before 1988?
How would I know if I was mis-sold my endowment policy? back to top
Up to 60% of endowment policies may have been mis-sold, according to a Treasury Select Committee Report. There are strict time limits within which complaints must be lodged. The FSA (Financial Services Authority) says policyholders have three years from their first warning letter to lodge a complaint.
In general the questions below usually give you some idea whether you were mis-sold your endowment policy, there are more complicated calculations to estimate the size of you claim. If you answer No to questions 1 to 4 and/or Yes to 5 below, you could well be eligible to make a claim. The questions are:When you purchased your mortgage-linked endowment policy:
1) Did the sales person inform you of other mortgage options such as capital repayment mortgages?
2) Were you made aware that there was no guarantee that the policy would pay-off your mortgage at maturity?
3) Did the sales person complete a full investigation into your financial and personal circumstances to establish your attitude to risk?
4) Were you told that if you cashed the endowment mortgage policy in early, the value of the policy would be greatly reduced?
5) Did the sales person tell you that your policy would produce a lump sum surplus to the target amount at maturity?
There could be other issues
which may be worth discussing, the questions above are not entirely conclusive.
How long does a mis-selling case take to resolve?
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The financial regulator (the Financial Services Authority) has told endowment issuers that they should assess claims within eight weeks. Life Offices presently have so many complaints to deal with that they are finding it difficult to meet this target. They are employing extra staff in an effort to clear as much back log as possible.
The claims specialist will monitor the process closely and will nudge the Life Office where they find they are lagging unnecessarily. For more information please read
The Claims Process
Should I wait to see if my situation improves or is there a deadline for complaining?
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You should act now. The financial services regulator, the FSA, has laid down rules that allow endowment companies to time bar complaints. Life Offices under guidance from the FSA have generally allowed a three year claims period from when you should have realised there was a problem (which is usually taken to be when you receive a letter from your endowment company projecting a severe or possible
shortfall at your endowment's maturity - called a 'Red
or Amber Letter') or within six years of when your endowment was sold to you.
Does it make a difference if the policy was cashed in\surrendered, sold, or finished?
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No. So long as you can provide evidence that you were the policyholder and that you were mis-sold the policy you can claim compensation.
A time limit of three years from the sale date may apply.
If my complaint was turned down do I get a second chance?
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You generally have one chance to complain. However if your complaint was not upheld
claims handlers have had cases where they have appealed successfully to the ombudsman.
They will need to see copies of all communication.
How much will it cost me?
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Our recommended claims partner operates a "No-Win, No-Fee" service, they will
undertake to do all the work to review,
calculate, present your case, manage feedback, appeal if necessary and chase-up
your claim. You only pay a fee when they have successfully secured compensation
for you - and then 25% (plus VAT where applicable)
of the claim settlement amount will be their fee.
Can I not make my own complaint?
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You can make your own complaint. As with all complaints, a professional can
come in handy. A claims handler will take all the worry and doubt out of making
a complaint. They will ensure that the amount calculated in compensation is
correct, and that your case is properly represented. The claims industry says
that complaint handlers have a higher success rate than self-handled complaints and can
often claim a higher and more accurate amount for compensation for the policy
sometimes even offsetting their commission. It is your choice, being in a
position where only one appeal can be made to the Ombudsmen, you have to
consider carefully whether you believe you have a good chance making a
successful claim yourself or leaving it to a professional, with a good track
record. If you do the claim yourself we advise to research the subject very
well, to ensure you get your full entitlement. Lastly if doing it yourself means
that you will keep putting off the claim because your too busy, then perhaps
consider giving it to a claims handler even if you have the knowledge, since
there is a time limit in which you can make a claim, so don't put it off too
long, otherwise you will loose your entitlement.
How much will I get? back to top
The method of calculation is complex, but essentially it looks to put you back into the financial position you would now be in if you had selected a repayment mortgage rather than an endowment. Whilst the current endowment policy value does form part of the calculation, it is important to realise that any compensation figure is likely to bear little resemblance to a "shortfall projection" you might have been quoted.
Am I guaranteed to get compensation? back to top
There can be no absolute guarantee that you'll get compensation, or how much you might get. The claims professionals will qualify your claim first and only present cases where there is a strong likelihood of success. Remember too, the claims handlers only get paid if they successfully secure compensation for you so it is in everyone's interest to fight for the compensation you are entitled to.
Can I go straight to the Ombudsman? back to top
No - there are very clear rules laid down by the Regulators about how complaints and claims must be handled. The Company who is responsible for the advice must be given the opportunity to settle the case first. But you do of course retain the right to go to the Ombudsman subsequently if the claims company or you are not happy, or don't agree, with the Company's decision.
What if my endowment is now used just for savings and not linked to a mortgage? back to top
You have the same rights to complain, although the compensation calculation may be different.
Am I unable to claim because I bought the policy before 1988? back to top
It is true that the claims process is a lot less straightforward on policies bought before the introduction of the Financial Services Act in 1988. However, some Companies have voluntarily agreed to review such cases so it is certainly worth submitting your enquiry.
