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Time is
running out for many of the 700,000 homeowners in the UK that have yet to lodge
complaints against the life insurance companies that mis-sold millions of
endowment plans - in what is called the biggest scandal in UK financial
history. Thousands of Endowment plans were Mis-Sold creating a serious Mortgage
Shortfall for thousans of Homeowners.
The insurers
decided to introduce time-barring on endowment complaints last year in an
attempt to draw a line under the mis-selling scandal.
Some
policyholders with Scottish Widows will be barred from claiming as soon as next
month. For Standard Life and Norwich Union customers, time-barring will start
to take effect in June. Prudential and Legal & General are the only life
companies that have not imposed time-bars. Some policyholders with Guardian
Assurance and Guardian Linked Life, both part of the Guardian group owned by
Aegon UK, have gained a reprieve, however.
This week the
Financial Services Authority (FSA) fined Guardian £750,000 for flaws in
the way it handles mis-selling complaints. The company will review thousands of
complaints it rejected from January 2003 and December 2004.
Which?, the
consumer group, says that as many as five million homeowners were mis-sold
endowment plans to pay off their mortgages. An estimated 700,000 have already
missed their deadlines to complain. Policyholders have three years to complain
about mis-selling from the time that they are first told that they face a
shortfall on their mortgage.
700,000
policyholders in the UK that have yet to stake their Endowment claim!
Highly
Recommended website
The FSA
decided in June 2004 that firms must let customers know that the three-year
limit is coming up six months before the date bites. Many insurers were caught
out by the ruling and were forced to extend the time limit for complaining on
some policies to ensure that customers had enough time to complain. Most of the
insurers then introduced the arbitrary cut-off dates in an attempt to put a
time limit on their own financial liability for mis-selling. But the Financial
Ombudsman Service says that some of the time limits are being incorrectly
imposed and some time-barred complaints may still be valid.
A complaint
may also be upheld if a policyholder can prove that exceptional circumstances
prevented him or her from complaining before the deadline. Some claims-handling
companies and independent organisations are accusing firms of deliberately
flouting the FSA guidelines to avoid paying out. A group of disgruntled
policyholders has launched an online petition against time-barring with more
than 4,000 signatories. Merryn Myatt, who runs the www.timebar.org site, says:
“Innocent people are not being given the chance to prove the guilt of
companies involved because they are time-barring them summarily.”
Policyholders
who took out an endowment on the advice of an independent financial adviser
before the Financial Services Act came into force in April 1988 are not
eligible for compensation through the ombudsman. Their only course of action is
to complain directly to the firm that sold them the policy, if it still exists.
As a result,
Robert and Patricia Birt, of Woodley, Berkshire, are losing hope of being able
to claim compensation for the £4,000 shortfall on their Norwich Union
policy. The couple took out the policy in November 1986 and have been unable to
trace the financial adviser that sold them the endowment. Mrs Birt says:
“It seems unfair that just because we took out the policy before 1988, our
complaint will go nowhere.”
700,000
policyholders in the UK that have yet to stake their Endowment claim!
Highly
Recommended website |
