MONEY: So if you're not well endowed.. act now

Sunday Mirror, Mar 6, 2005 by MELANIE WRIGHT on handling your finances

MILLIONS of victims of endowment mortgage mis-selling must act quickly or miss out on compensation. Customers of Norwich Union and Standard Life have 12 months left to make a claim (6 months for Barclays Life and Woolwich Life). Here's our guide to help you...

HOW DO I KNOW IF I'M ELIGIBLE TO MAKE A CLAIM?

YOU have grounds to complain if the product was unsuitable at the time it was sold, or you did not understand what you were buying or the risks involved. You should also complain if other options for repaying the mortgage were not discussed with you, if the sale was not appropriate for your financial circumstances at the time, or if the adviser said that the policy was guaranteed or would definitely pay off the mortgage. This can often be a case of your word against the adviser's unless you have written evidence. Include all information you can remember as it may strengthen your case.

HOW CAN I SHOW THE SALE WAS INAPPROPRIATE?

YOUR adviser should have made sure an endowment was the best way of repaying your mortgage depending on your finances at the time and your attitude to risk. You need to show that the mortgage may not have been suitable for you - for example, if the adviser didn't explain how your endowment would be invested, explain the risks involved and tell you that an endowment policy is a long-term commitment which results in a poor return if cashed in early.

Other grounds include the adviser failing to check that you were comfortable with the risks of a stock market investment. He or she should have explained that the amount you would get back depended on the performance of the policy.

WHO DO I COMPLAIN TO?

FIRST port of call should be the company who sold you the endowment. The box above shows the info you need when you are drafting your complaint. If you need further help, visit the Which? website at www.which.net and click on Campaigns and then Endowments. The site even has an online complaint letter generator to help you.

WHAT IF THEY REFUSE TO HELP?

IF the company can't resolve your complaint or refuses to offer compensation, approach the Financial Ombudsman Service. You must be able to show that you have lost out financially as a result of the endowment. Compensation will be based on comparing the performance with a repayment mortgage over the same period. By the end of this month, the Ombudsman will have dealt with around 70,000 complaints since March last year alone. Between 40 and 50 per cent have been found in favour of the consumer. Write to: Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall,London E14 9SR, or call the helpline on 0845 080 1800, or see www.financial- ombudsman.org.uk.

WHAT IF MY ENDOWMENT'S VERY OLD?

IF it was sold before April 29, 1988, you have no automatic right to complain to the Ombudsman but some insurers have agreed to allow complaints. Contact the Ombudsman for details.

WHAT IF I CAN'T FIND THE COMPANY?

IF it has gone out of business you should take your complaint to the Financial Services Compensation Scheme rather than the Ombudsman. The scheme can't investigate claims relating to policies sold before August 28, 1988. More details at www.fscs.org.uk where there's an online questionnaire that will tell you if you're eligible. Or ring the scheme's helpline on 020 7892 7300.

I'VE BEEN REFUSED COMPENSATION..

DON'T pay more into your endowment in the hope that you'll be able to make up the shortfall. David Hollingworth, of London & Country Mortgages said: "It's throwing good money after bad. Switching to a repayment mortgage is the safest, no-risk way to ensure that your mortgage will be paid off."

SHOULD I SURRENDER MY POLICY?

LOTS of people just stop paying rather than surrendering. If you do want to get rid of your policy, don't surrender it without checking to see if you could do better selling it. Endowment policyholders missed out on more than pounds 90m that way last year. Brian Goldstein of the Association of Policy Market Makers said: "Many people can get at least 10 per cent more if they sell. Call the APMM on 0845 011 9400 for a quote, or see www.apmm.org/ valuation and fill in a valuation application form online.

JASON and Suzanne Cottey took out an endowment with Guardian in 1992 and were told it would pay off their pounds 55,000 capital with a lump sum left over.

Jason, 37, a project engineer, from Bath, says: "Then, a couple of years ago, we got a letter warning there could be a big shortfall. We had paid in around pounds 9,000 but the policy was worth only pounds 5,000."

The firm claimed they had no grounds for complaint, but the Financial Ombudsman Service ruled in their favour.

"It took about six months but in the end Guardian sent me a cheque for around pounds 15,000. It was a big relief to get compensation and all it took was the cost of a stamp."

CHECKLIST FOR MAKING A COMPLAINT

First, you'll need the name and address of the company who employed the adviser who sold you the policy