I understand the misselling scandal related to this, however you have no claim if advice was not incorrect or misleading. Not getting the return you believe was 'guaranteed' is neither of those.
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Discussion about mis-selling of endowment mortgages in the 80s and 90s
- Thread starter Rroff
- Start date
Commissario
Let's get things straight here.
1) I'm not your pal.
2) I've told you something that's fact and yet you're still insisting I'm wrong. Are you actually calling me a liar?
Soldato
I think it’s difficult for some people to accept they overlooked the risks.
No, that's you making stuff up. If what you were saying was facts, why was your claim denied?
Commissario
Making stuff up? You are so full of it. I told you something happened, you told me it didn't.
When we filled in the form, there's a row of numbers and the advisor ticks one. I can't recall the exact wording but it's something to do with how much are you prepared to take a risk.
I remember the conversation though because it all hangs on this and it was really glossed over during the application process. He said something along the lines of "I've got to tick one of these but it doesn't matter because it's guaranteed to pay off the balance and get a decent cash lump sum at the end, I'll go with a seven because that's what everyone puts" *tick*
And that was that, no discussion, nothing. The endowment mortgage was the one to go for at the time, it was generally accepted as being by far the best option. Literally millions of people were told that it would pay off the balance at the end of the term and also provide a good lump sum. I don't know how you can't accept that unless it's just you doing what you always do, sticking your nose in and deliberately posting to
Man of Honour
No we 100% didn't, if we had known our money was being put into stocks & shares and it could go down we wouldn't have done it.
We were told have this interest only mortgage and have this on the side which is a type of insurance, after 20 years you will get £30,000 - that was it.
Of course the important small print may say different but face to face we were told what we would get.
Has it happened we were lucky and got £12,800 which was £1,200 short of our mortgage and we just paid it off.
We hadn't thought about claiming because back in 2002 the internet wasn't as good for searching so we just bent over, now seeing the links I sent dlockers I might pursue it.
It's funny how both me and Feek are saying exactly the same thing because we were there but you young uns know better.
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Commissario
You probably can't. There were time limits, see here.
Soldato
The first of the 5 stages of grief is denial
Permabanned
All the best!
Man of Honour
Permabanned
Mortgage brokers and financial advisors first priority is themselves and their cut, IMHO, if you are fortunate enough to accept a deal that helps you both in some way, you may consider it either good advice or very fortuitous 
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....
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....
Permabanned
I can't get any Greyer.
Presumably you still have some then. BONUS
Have a few drinks for me.Ah, I see the photo now, the convict look covers a multitude of sins
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There will always be something that people get screwed over with.. usually any form of credit.
That's why I avoid it completely (except for my mortgage that I will have paid off in 5yrs), in addition.. leasehold or any other property that's not purely freehold, i.e. no annual maintenance charge.
Why take the risk - live within your means and none of this stuff can happen.
That's why I avoid it completely (except for my mortgage that I will have paid off in 5yrs), in addition.. leasehold or any other property that's not purely freehold, i.e. no annual maintenance charge.
Why take the risk - live within your means and none of this stuff can happen.
Commissario
Because the insurance companies and brokers were quite good at covering themselves.
Feek's thing about the "risk scale" is probably a great example of that, it let the company off by using some fuzzy nonsense scale of risk presented to the buyer (quite likely without explaining any of the risks) as a way of "showing" the buyer was happy to take a risk.
IIRC it was a very large part of the reason every single advert for any product that relies on the stock market now has a prominent "the value may go down..." and why brokers tied to a specific company for consumer products were done away with, or at least now have to make it very clear.
I was probably 15 or so when the scandal broke, and I can remember it and the massive issues of blatant miss selling of the products under false pretences by people who had a very good reason to push unsuitable products, and who often got a nice cut of the money made.
I remember some of the people that were selling these products, one of our neighbours who was not very good with figures (and no background in finance or banking), but did have a great talk was selling them and tried to get my parents to move to the one he was selling at one point.
My parents were told the same and somewhat surprised when the endowment matured and they didnt have a cleared mortgage balance. Fortunately it wasnt too far off but they had never even considered that it wouldnt completely clear the balance until it happened.
Soldato
- Joined
- 21 Jan 2010
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I was told exactly the same as a callow youth in 1993, and ignored my dad's advice to go repayment. I got told it would pay the mortgage and we'd get a big chunk of cash.
Luckily, I was so furious with natwest for some reason that I switched lenders a few years later and went repayment from then on.
I was living a fairly chaotic life back then and have no idea what happened to the endowment. Ah well, easy come, easy go...
Soldato
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I can't remember, but projecting a 25 year maturity amount is close to impossible for the first 20 years, I would guess.
Commissario
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.
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Soldato
I think part of the problem is that a lot of people never want to take personal responsibility, which is why it's been so easily historically to mis-sell things, and why so many checks are put into place now. It's a bit annoying for those of us who are prepared to put in the graft, read the small print and live within our means. We're the ones who eventually end up paying for bailing others out.