MIS SOLD ENDOWMENTS CAN CLAIM COMPENSATIONS

2007-03-08 10:33:40

( Business )



A mortgage endowment is a savings plan where you deposit money for an agreed period to eventually pay off the principal amount of a mortgage. It is done for interest only mortgage where borrower makes interest payment directly to the lender and accumulates money in a savings account to pay off the loan principal over time. Ideally, the mortgage endowment plan is designed for the borrower to earn interest payment on the savings put up to pay off the principal loan.

Millions of endowments were sold during the 1980s and 1990s as another form of investment while paying off mortgage. Poor returns from the stock market where endowment funds were invested by financial companies resulted to shortfall of mortgage payments. It further resulted to a higher number of borrowers who defaulted on their mortgage payments.

A mortgage endowment is mis sold when the borrower were not fully informed on how the mortgage endowment works. Financial adviser mis sold a mortgage endowment plan to a client when he fails to ensure him that it is the best way to pay off a mortgage. Failing to inform the client of the risk involved in taking out a mortgage endowment as well as failure to discuss its suitability at the time of its purchase can also be grounds for endowment miss selling.

Mortgage endowment plan holders can claim compensation against mis sold endowments when you can establish that your financial adviser failed to inform you of the risk involved in taking out a mortgage endowment plan. Other situations wherein you can establish failure on his part to provide proper information regarding the performance and operation of your endowment plan can be grounds to complain endowment miss selling.

You can directly complain to your insurance company that brokered the mortgage endowment plan. Appeals can be raised to the Ombudsman to resolve disagreements on the decision of the insurance company over the mis sold endowment complain. Beware of using the services of claims handlers which grabs almost half of the compensation awards leaving the clients with lesser money to pay off mortgage.


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