Did the banks not send statements, report progress etc?
I just can't fathom being blind to the risk of a product that (maybe with the benefit of hindsight) is so clearly risky.
Because it was with hindsight.
At the time they were sold as pretty safe with any downsides played down massively, and the likes of the statements that got sent out were usually quite optimistic "we performed worse than expected, but you've still got 10 years with us and next year should be much better", IIRC it required a change in the regulator's approach for the risks to be explained as clearly as they are now.
Remember back in the early 2000's when everyone and their aunt was able to get a mortgage pretty much regardless of their rating, and it was common to get mortgages for more than the value of the property?
That was basically the same way the endowment mortgages were being sold back in the 70's and 80's, the assumption was that the value of the shares etc would always go up...then we had a couple of market crashes and some insanely high interest rates.
Most financial "common sense" regulations are there because at some point the banking sector, or elements within in decided to take risks without informing the customers properly, and the customers or government were left holding the can when the bankers messed up and cost their customers a huge amount of money (whilst the finance people got to keep their bonuses). We're not quite as bad as the US, mainly because outright fraud from the bank is dealt with far more harshly here*, but that doesn't mean the likes of brokers and banks in the 70's and 80's didn't get a nice reward for selling you a product that wasn't the best for you, but was the best for them. It's one of the main reasons these days they have to explicitly inform you of any link they have to the products they offer you and any potential conflict of interest.
It's the reason people who have an understanding of the history of the banks etc (and who have lived through it in the past), get so loud when the government starts to talk about "deregulating" them in order to "open up opportunities", as people with longer memories know what happened before and the reason we have those regulations.
*IIRC one of the big US banks was fraudulently opening paid for accounts in the names of account holders and it cost customers billions and many lost houses because of it, when the US regulator finally stepped in they gave a relatively small fine (less than had been made by the fraud), as it was blamed on "over eager staff" or something.
The worst and most naive words I hear are "He's / she's really nice and has got me a great deal" <lol> Fingers crossed you ain't just paid their next big bill....
All the best!
