Endowment Complaints Explained
If you are one of the millions of homeowners caught up in the endowments debacle, you could be facing a shortfall in your policy. This means that although you thought your endowment policy would pay off your mortgage at the end of the term, you may have to face the fact that the policy won't have sufficient funds to do this. You could be left with a sizeable sum still owing on your mortgage.
The size of the shortfall will vary from case to case, but the average figure you'll have to find after your 25 years are up is £5,500 - with some people having to pay substantially more.
Mis-sold Endowments
It is thought that up to 60% of endowment mortgages may have been 'mis-sold', meaning that your mortgage advisor did not give you the full facts about your policy, leaving you unable to make an informed decision about whether an endowment mortgage was the right choice for you.
If you believe you've been a victim of mis-selling, you can make an official complaint which could result in compensation if mis-selling is proven.
Do I have a Valid Complaint?
Generally, to have a valid complaint you must have been mis-sold an endowment and you must have lost out financially as a result.
The most common reasons for a mis-sale are:
- Your financial adviser didn't tell you how your money would be invested and explain the risks
- Your adviser didn't check that you accepted the risk involved with investing your money on the stockmarket or elsewhere
- It wasn't explained to you that an endowment policy is a long term investment, and if you cash it in early you probably won't see a good return
- Your adviser didn't make sure that you could reasonably keep up payments until the end of the policy
- Fees and/or charges and their effect on your return weren't properly explained
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