Discussion about mis-selling of endowment mortgages in the 80s and 90s

Rroff said:
I think a good number of people who were "fooled" by it willingly ignored the danger signs.
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I got a red warning letter every year from Aviva after the initial few years, as I imagine everyone else would have who had a shortfall.

I'd converted to 100% repayment and kept the endowment going based on that, got my payout this year, was 3.5k short of the target but as it was effectively a savings account then it was nice to the get amount to do the house up a bit.
 
dLockers said:
It is not a personal attack, it is just VERY hard to understand where this magic money was intended to come from, and risk/reward wasn't just an obvious conclusion.
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A combination of lies and the information advantage the banks / building societies had over normal people - even those well educated. They were used to being trusted back then and took advantage.

Once they were found out they knew they were caught with no way out for being sleazy scumbags. They didn't attempt to fight the recompense scheme at all ... which speaks volumes. Reassuringly expensive lawyers could have delayed putting things right for years. They would have lost eventually regardless: This hit the property owning middle classes who are key swing voters. Punishing evil bankers would be labour's wet dream under Kinnock and Foot and the tories lack of spine post maggie would have them running for cover.

What's depressing is they thought they got off lightly and got greedy in other markets, which lead to the 2009 financial crash. A bunch of dead wood got cleared out, only for their replacements to stuff up in a new and exciting way :(
 
GaryTheSnail said:
That normally doesn't end well and results in the house been taken from them or handed back anyway.
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But how does interest only still compare to renting overall even if they end up loosing it? I'm not saying it's a good thing at all, and those loans should never have existed, but might have still worked out better than them renting?
 
Feek said:
For goodness sake. How many times do we need to say it? There were no danger signs.



I’m getting to the stage where I wish I’d just left all the posts deleted and not moved them to a new thread.
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Quite frankly not my memory of it - but my grandad was very switched on with that kind of stuff and his sister, my great aunt, worked in that industry (finance and insurance) so might be harder for me to see it from a different perspective.

Though strangely enough for someone so switched on in that regard, he was a sucker for any cold caller offering to save him money - we had to talk him out of a few scams with solar, etc.
 
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Rroff said:
I think a good number of people who were "fooled" by it willingly ignored the danger signs.
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dLockers said:
It is not a personal attack, it is just VERY hard to understand where this magic money was intended to come from, and risk/reward wasn't just an obvious conclusion.
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When professional Financial Advisers working for a bank tell you that you will receive so much at the end of 20 years there were no danger signs. I really don't know how many times we can say this.
If these words had come from R Jones & Son Loan Company I'd understand your comments but it came from the very people you should have been able to trust with your money.
I'm glad that because of us and those involved in Pension Scams etc you now live in a World where everything has to be laid out in front of you and they aren't allowed to tell you lies and take you for a ride.
 
Feek said:
For goodness sake. How many times do we need to say it? There were no danger signs.



I’m getting to the stage where I wish I’d just left all the posts deleted and not moved them to a new thread.
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Erm!
The reason I didn't take out an endowment was that it was obvious that basing your mortgage on the stock market was risky.

Everyone was doing it, and everyone was going on about it being far better than a repayment mortgage. Its the equivalent of combi boilers being the best thing since sliced bread.

Now I know I had a bit more chance of spotting the errors than Joe public but your the first person I know of who wasn't aware of what an endowment was!

peterwalkley said:
A combination of lies and the information advantage the banks / building societies had over normal people - even those well educated. They were used to being trusted back then and took advantage.

Once they were found out they knew they were caught with no way out for being sleazy scumbags. They didn't attempt to fight the recompense scheme at all ... which speaks volumes. Reassuringly expensive lawyers could have delayed putting things right for years. They would have lost eventually regardless: This hit the property owning middle classes who are key swing voters. Punishing evil bankers would be labour's wet dream under Kinnock and Foot and the tories lack of spine post maggie would have them running for cover.

What's depressing is they thought they got off lightly and got greedy in other markets, which lead to the 2009 financial crash. A bunch of dead wood got cleared out, only for their replacements to stuff up in a new and exciting way :(
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Again, there was nothing wrong per se with endowments its just that as the market returns changed with significantly lower inflation people didn't like the bad news that their investments would likely not meet the expectations.
Which became more and more obvious and more and more deficit as time went by and inflation was lowered and kept well down and hence returns fell.
 
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SexyGreyFox said:
WE WEREN'T TOLD IT WAS BASED ON THE STOCK MARKET.
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I DONT BELIEVE YOU, BECAUSE EVERYONE KNEW THEY WERE INVESTMENT BACKED*
I WAS THERE AND I KNEW IT.
I GUESS ITS BACK TO THE SAME ISSUE AGAIN WITH PEOPLE UNABLE TO ABSORB FINANCIAL PRODUCTS.

*I guess some people living under rocks may have missed that.
 
Prototype321 said:
But how does interest only still compare to renting overall even if they end up loosing it? I'm not saying it's a good thing at all, and those loans should never have existed, but might have still worked out better than them renting?
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Of course it will. People throw shade on interest only all time, because they don't understand the concept.
 
This is what I hate about finances, peoples egos mean they can't admit when they didn't understand something or misinterpreted.

Its also the problem since many of these things are complicated compared to the ability of many people to understand them.

I don't know what is worse TBH, to have to admit your easily fooled, or you couldn't take in detail to understand something.
 
SexyGreyFox said:
We weren't told it was investment backed.
Call me a liar, you and others are now getting on my nerves because you think you know it all.
I'm out.
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I genuinely can't recall what the advisor said about how the endowment worked, I do remember him telling me it was what he had and it would produce more than the estimated value which was clearly untrue a few years later.
SexyGreyFox said:
We got our first warning letter 1 year before the 20 years was up.
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That's terrible. How long ago was that?
 
Mercenary Keyboard Warrior said:
This is what I hate about finances, peoples egos mean they can't admit when they didn't understand something or misinterpreted.

Its also the problem since many of these things are complicated compared to the ability of many people to understand them.

I don't know what is worse TBH, to have to admit your easily fooled, or you couldn't take in detail to understand something.
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It isn't just finance - personally I have a motivation to at least generally understand the world in a wide variety of areas so I can better weigh the potential for pitfalls, etc. but it makes it hard sometimes to see it from other people's perspectives. I often feel like people are willingly closing their eyes to the potential negatives in a lot of things.

When I bought my pickup the salesman (this was a VW authorised commercial dealer as well not some backstreet place) blatantly lied over several aspects to get the sale, more so even than I'd seen through - but in that instance I knew what I was getting into so it didn't affect my decision making - but for someone else they could have easily been misled. (Ultimately I probably did someone else a favour LOL buying it).
 
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Mercenary Keyboard Warrior said:
This is what I hate about finances, peoples egos mean they can't admit when they didn't understand something or misinterpreted.

Its also the problem since many of these things are complicated compared to the ability of many people to understand them.

I don't know what is worse TBH, to have to admit your easily fooled, or you couldn't take in detail to understand something.
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Its not as clear cut as that tbh. You are viewing it from a position of "well I had all the info available online, cant believe these noobs bought an endowment" People are so lucky these days to able to call on the internet for advice, 100% I would have made different decisions(yup I would have invested in crypto and been billionaire right?).
 
gingergundog said:
Its not as clear cut as that tbh. You are viewing it from a position of "well I had all the info available online, cant believe these noobs bought an endowment" People are so lucky these days to able to call on the internet for advice, 100% I would have made different decisions(yup I would have invested in crypto and been billionaire right?).
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MKW is an old dude too. Read his posts further up.
 
OldKitMan said:
I genuinely can't recall what the advisor said about how the endowment worked, I do remember him telling me it was what he had and it would produce more than the estimated value which was clearly untrue a few years later.
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We are all liars according to the 'experts' in here.
Apparently they 100% know that we were definitely told it was based on the stock market and investments by the bank.

OldKitMan said:
That's terrible. How long ago was that?
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2002, we were told we'd be £1,200 short at the end of the 20 years which at the time wasn't a problem for us.


peterwalkley said:
A combination of lies and the information advantage the banks / building societies had over normal people - even those well educated. They were used to being trusted back then and took advantage.
Once they were found out they knew they were caught with no way out for being sleazy scumbags. They didn't attempt to fight the recompense scheme at all ... which speaks volumes.
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This sums it up.
 
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