Endowment mortgage compensation.

[Kathyan]

We have been trying to claim compensation for a mis sold endowment policy. We tried going through the insurance company and we got nowhere. After going through the Financial Ombudsman and going round in circles we have now filed with the FSCS. Has anyone had dealings with FSCS for an endowment claim and if so how much are we likely to get? The policy should  realised �40,000, but it looks like it will be about �16,000 short.

[Loosehead]

A shortfall alone does not mean you where mis sold, you have to show that you where not properly informed about how the policy works and of the possibility that the return may not cover the the amount intended. When did you take out the policy? do you have the original paper work? Is the agent still about ? what advice where you given? Where you given the impression that the return would definately be enough? all questions that will need to be resolved to determine whether you where in fact mis sold. The life company concerned will have a dept dealing with this, they presumably have said that they do not think you where mis sold, did they say why? A lot of questions I know but the case for compensation is far from clear.

[Kathyan]

We contacted a financial adviser who told us that we had a case and he did all the letters for us, but we got nowhere with the original company as they had changed hands. We tried the company who had taken over and got nowhere with them either, they just wouldn't reply. He recommended that we go through the Financial Ombudsman, and they put us on to the FSCS. We haven't heard back from them yet. We were just wondering what level of compensation we could possibly get.

[Loosehead]

Assuming you are mis-sold and compensation is offerred it is based on the position you are in now based on the position you would have been in had you taken a repayment mortgage. It is a complex calculation but essentially it compares your actual financial postion with the financial position you would have had, had you been whittling the capital down month by month. It is not simply the amount of the short fall. 

But before any of that you need to establish that miss selling took place and also who is responsible. Are you saying your policy, ie the policy itself is now managed by a different company?, forget brokers agents etc. If so it will be very difficult to get them to take responsibility for another company.