Tying a mortgage - one of the most important financial commitments any of us can make - to a product that was at the mercy of the stock market now seems the height of recklessness.
If you bought an endowment mortgage, you actually acquired an interest-only mortgage linked to an investment product. You were probably told at the time that the endowment mortgage would eventually not only pay off the mortgage at the end of its term, but also provide an additional lump sum. Unfortunately, millions of customers have realised that the advice they received was very poor - and they've ended up with a shortfall. Not only was the promise of a lump sum frequently broken but also, more critically, in the majority of instances, the endowment return wasn't enough to pay off the mortgage it was intended for.
Here's what Martin Lewis has to say about endowment mortgages: ‘Endowments paid large commissions to advisers. They weren't transparent. Worse still, to make them look cheaper than repayment mortgages, the payment amounts were often set up at a low level, hoping for unrealistically big investment returns.'
It's fair to say that the majority of policies are unlikely to pay off the mortgages they were taken out to cover. This is scandalous enough. But what's also shocking is that many customers have been given the impression - by those who've got most to lose - that they can no longer appeal.
If you took out an endowment mortgage, but thought you could no longer get compensation, we recommend you read our myth-busting statements below. If any sound familiar, it's not too late - you could well have a case. Even if your policy has been sold, replaced or surrendered, you still could be eligible for help - and receive the financial justice you deserve.
Endowment mortgage myths
Myth 1. Everything is time-barred
Generally speaking, endowment mortgage holders have to complain within three years of receiving their first warning letter, or within 6 months of receiving a second warning ‘red' or ‘amber' letter - whichever comes last. If you have not received such a letter (for whatever reason), your claim is unlikely to be time-barred.
Myth 2. You can't complain if your policy has matured or you've surrendered it.
Regardless of this, you have a right to complain if the policy was originally improperly sold to you and you suffered losses as a result.
Myth 3. You can't complain if the firm that sold you the policy is no longer in business.
There is an industry-funded safety net for savers and investors called the Financial Services Compensation Scheme (FSCS) that was set up to provide compensation for customers of firms who can no longer pay. If your policy was taken out after 29th August 1988, then you may be covered by this scheme.
Having read our 3 myth-busters, you may feel you have cause for complaint. But perhaps you're unsure about what this might mean for you. If so, read the case study below, about what happens when we pursue a complaint.
In 1994, Mrs F, a widow with three dependent children, had very limited financial resources available for the repayment of her mortgage - as well as no savings or investment experience. Despite not being able to take any risks with her mortgage, Mrs F was advised to take out a £25,000 endowment policy which depended on the performance of the stock market.
When EMCAS initially made the complaint on Mrs F's behalf, the firm rejected it, claiming that their advice was suitable and Mrs F was fully aware of the risk she was taking. However, our financial experts did not agree and appealed the case to the Financial Ombudsman Service. The Ombudsman agreed and instructed the firm to uphold the complaint. Eventually, Mrs F received an offer for over £5,000. For Mrs F, it was financial justice - and redress for the appalling advice she'd received.
So what does all this mean to you?
Having read everything so far, you may now think that you've been mis-sold an endowment mortgage. If that's the case, we believe you've been the victim of financial injustice. That's as wrong as being short-changed in a shop - and you have the right to complain.
What can you do to seek compensation?
There are two main options open to you when trying to restore financial justice. You can claim on your own, or use an expert. Now we feel it's important to stress that we can't guarantee you a payout, more money or a faster service than you would get on your own. And if anyone else claims this, then we'd advise you to avoid them at all costs.
However, we do offer an honest, expert, hassle-free service with no upfront costs. What's more, we're regulated by the Claims Management regulator in respect of regulated claims management activities and guided by our own stringent Code of Conduct.
Understandably, you may want to know a little more about us - and whether we're right for you. If so, we'd love to tell you a bit more about ourselves - and why over 700,000 people have trusted EMCAS with their claims.
If, on the other hand, you'd like us to work alongside you to win your compensation, we'd be delighted to help. Find out more.
Request a call back from one of our down-to-earth, expert advisers by clicking here. We'll call you back at a time convenient to you and get the process started. You can then relax. We'll be doing everything in our power to secure you the financial justice you deserve.