Financial advisors misselling products
You are only able to complain about the advice you received when you bought your endowment policy.
You are not allowed to complain about the performance of the policy or the fact that you may have a shortfall.
Reasons why you can make a claim:
You will be able to make a complain if your advisors did not make sure that an endowment was the best way of repaying your mortgage, depending on your financial circumstances at the time of your attitude to risk.
Areas for complaint include:
- Other options for repaying the mortgage were not fully discussed.
- The advisor didn’t explain how your policy would be invested and explain the risks.
- The advisor didn’t explain that the policy was a long-term commitment.
- The advisor said the policy was guaranteed to pay off the mortgage.
- The advisor didn’t check to see if you were comfortable with the risks of the stock market investment. They should have explained that the amount you would receive would depend on the performance of the policy.
The sale did not follow endowment regulations
Financial regulators set out what should happen when an endowment policy is sold, but if some advisors do not follow these rules, there is room for complaints. The following are some of the reasons why the mortgage sale may not have followed these measurements:
- The advisor didn’t complete a factfind during the sale process.
- The advisor didn’t explain any fees and charges and how they affect the return you get on your savings.
Retirement payments were not discussed:
If your mortgage and endowment were set up to continue past your expected retirement age, your advisor should have checked that you would have enough income in retirement to continue to pay the mortgage and endowment premiums.
If this wasn't discussed, or you were told not to worry because the endowment would pay off the mortgage before retirement, you have grounds to complain.
Making a complaint
You first step is to complain to the firm that employed the advisor who sold you your policy. Companies must have a proper complaints system. Complaints must be made as soon as possible, as any delays could lose the right to
compensation.
It is important to find as much paperwork and request a copy of your endowment file to support any claims you have.
The company will then respond after your complaint is made. After the firm has investigated the matter, you should receive a final response letter within eight weeks. If the firm upholds your issue, it will offer compensation. This will be worked out using Financial Services Authority guidelines.
If you are still not happy with your response, you are entitled to take matters to the Financial Ombudsman Service. This is a free service and will work out if you are owed compensation.
Payment Protection Insurance
A claim for compensation within this field depends on when you purchased the insurance. PPI sales only came under jurisdiction of the FSA in January 2005. Any sales prior to the date are not covered by the latest rules. However, it may be worth complaining to your lender if you feel you have been mis-sold.
Who can re-claim:
The clearest cases of mis-selling are those where clients were sold insurance when they had no chance of claiming it:
- If you were not employed at the time you took the insurance – whether you were unemployed, self-employed or retired – it will be impossible for you to make a valid insurance claim.
- If you were told the insurance was unavoidable it is likely you can claim. Lenders can insist that a borrower has PPI, but any company that signs up to the banking code must not insist you take out the insurance with them.
- If the entire cost of the PPI was not explained to you, or if the firm only quoted the cost of the loan with the PPI attached, then you can claim.
- If, when you took the insurance, you had a medical problem that could have kept you from working, you should have been warned that the insurance was unlikely to be suitable for you. If it wasn't explained, you can claim.
- If other important features of the loan were not explained – for example, the terms for cancelling the cover or significant exclusions such as stress and back problems – then you can claim.
Claiming:
To make a claim, you first need to complain to the firm that sold you the insurance. You should state the reasons why you feel you were mis-sold the policy. If you are not offered a fair refund from your first letter, write again and demand a 14 days resolution period.
Mis-sold Life Insurance:
Whole of life insurance and investment linked policies can be costly, and many customers are unaware that premiums increase over the life of the policy.
However, if you were not made aware of the scale of such an increase or were not informed by any future ‘reviews’, then you may be able to make a claim.
It normally takes 2 to 3 months to make a claim and you are entitled to another life insurance cover or an alternative after you have made a compliant.
At Accidents Direct we strive to make sure that a policy is right for you. If such insurance does not meet your needs, then please contact us and we will resolve any problems.
Updated on 29/06/2009