Endowment Compensation - Grounds for Complaint

In order to make a claim for endowment compensation you must normally fall into one of four categories for complaint. The basis of a complaint is not in respect of how badly the endowment policy actually performed but whether or not proper advice was given on such financial arrangements and in particular whether you were warned that these policies of insurance may not perform as anticipated in the event of the overall financial climate changing thereby reducing initially anticipated returns based on projected profitability of investments made, effectively on your behalf, by the company concerned. The grounds for complaint, that may lead to a financial settlement, but which are not exclusive include:

• Suitability of the endowment
  A financial adviser who acts properly should have ensured that an endowment was suitable based on your financial circumstances at the time and your attitude to risk. Items which may indicate unsuitability include:
  • failure to discuss other repayment options
  • failure to explain about the stock market, investments and risks involved
  • non disclosure that an endowment policy gives a poor return if cashed in before maturity
  • inappropriate promises or absolute guarantees of mortgage repayment on maturity
• The policy sale failed to comply with the regulations resulting in endowment mortgage misselling
  Financial advisers are legally obliged to follow the rules set out by government financial regulators and failure in this regard may lead to a verifiable claim for compensation. These failures may include:
  • failure by the adviser to outline fees and charges and their effect over the term of the policy
  • the adviser did not complete a fact-find during the sales process.
• Policy Churning
  Any adviser who suggested that you cash in an existing policy and then sold you another policy is guilty of “churning” which is against the Financial Authority rules and may give rise to a claim for endowment mortgage misselling compensation. Any existing policy should have been used to part pay off the mortgage loan.
• Financial difficulties in retirement
  Some mortgage policies continue after the normal or anticipated retirement age and a claim can be made if the adviser failed to properly check that you would have enough funds in retirement to continue to pay the premiums or if there was an indication given that the policy would pay off the mortgage before retirement which failed to materialise.

It is important to establish when the policy was sold as different rules apply to those sold before 28 August 1988. Financial Services legislation effectively introduced the Financial Ombudsman Service in 1988 and if the bank or insurance company is now bankrupt a complaint can be made to the Financial Services Compensation Scheme for policies sold after the introduction of the legislation. Policies sold before the legislation do not have the protection of the Financial Ombudsman or Compensation Scheme however many insurance companies have agreed to allow complaints about policies sold before 1988 to be dealt with by the Ombudsman.

Complete our Online Endowment Compensation Enquiry Form and we will tell you if you have an eligible claim.

What do you do next...
To receive your No Hassle claim pack and to begin the process of redress for the shortfall situation that you have with your endowment policy, simply:

•  Fill in our Endowment Mortgage Problem Enquiry form , our consultants will work on your behalf to get the best quotes. (Recommended)

•  Call us on 08432 897 822 For more information or finance Help (8.30am-7pm - 5 days per week – Out of Hours Answer phone)