31 July 2006

Property Post International article written By Safaraz Ali

Have you claimed your endowment compensation?

TIME is running out to claim compensation if you were mis-sold a mortgage, states Sajid Hussain, of Birmingham based Endowment Claims UK in an exclusive interview with the Property Post International.

Millions of mortgage borrowers face shortfalls on their home loans at maturity if they miss the looming deadlines for seeking redress. Mostly all the endowment companies have introduced deadlines after which mis-selling complaints will be outlawed.

Nationwide Building Society became the latest major institution to come clean over endowments when it recently admitted that policyholders who bought contracts via their branches are being timebarred.
Along with Legal & General and the Prudential it had consistently pledged not to impose timebars. Recently L&G reconsidered its position and has decided to begin outlawing complaints from September.

Elsewhere, Friends Provident and the companies acquired by Resolution Life, including Britannic Assurance, Royal & Sun Alliance, Alba Life and Swiss Life began timebarring as long ago as 2003. Guardian began to introduce timebars in 2004.

However, the big tidal wave of timebars, which is expected to trigger an enormous surge of complaints via endowment specialist companies such as Endowment Complaints UK begins this May, when the first Standard Life deadlines loom, followed rapidly by timebars at Norwich Union and Legal & General.

Some 155,000 Norwich Union customers, 13% of mortgage endowment holders, will lose the right to claim compensation this year, with 55,000 (just over half) of CIS similarly outlawed by the end of the year.

But the biggest group of time-barred customers will be the 428,000 Standard Life policyholders who will lose the right to complain by December 31.

Almost all companies give six months notice of their intention to timebar complaints three years after the customer is sent a so-called red letter, notifying them of the possibility of a serious shortfall.

Companies facing the largest number of customers with shortfalls include Standard Life, Friends Provident, Abbey National Life, and Alba Life where nine out of 10 contracts are facing big shortfalls.

The clock's ticking: there is a deadline on endowment mis-selling complaints

The issue of time-barring is controversial. Endowment Complaints UK argue the time limits are "grossly unfair" on policyholders and that widespread consumer ignorance could leave millions missing out.

Sajid Hussain is concerned that homebuyers will not understand the implications of warning letters, and will miss the chance for ever to make good their mortgage shortfalls. "Companies are not being fair to customers and in many cases are giving very misleading information."
"Consumers are losing valuable rights to claim compensation on the basis of letters which are legally unsafe," Sajid says. "In any other situation, if someone is losing a legal right to claim compensation then that notice must be served on them in person. All these institutions have to be able to prove is that the letters were posted."

The Financial Services Authority has laid down rigid guidelines which require firms to ensure that policyholders must receive a warning at least six months before the date of the time-bar, and that the warnings are clear and prominent. A number of firms have already been fined following their mishandling of endowment customers.

Sajid Hussain of Endowment Complaints UK, says: "The FSA wants companies to resolve any disputes as quickly as possible. This is where Endowment Complaints can make the whole process of complaining easy, stress free and in the best interest of the customers."

Endowment complaints UK can assist in cases where even the endowmnt has been surrendered or is no longer being used for mortgage purposes. They can in many cases assist in obtaining up to 35% more than the surrender value offered by the endowment provider.

How to complain Endowment Compensation UK are a based specialist Financial Services Claims Company who have claimed more than £650,000 worth of compensation for their clients on an No Win No Fee Basis and they can be contacted on 0121 523 9699 7 days a week 9.00am to 9.00pm.
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