News

Under-endowed and unhappy

If the Financial Services Authority hoped that its announcement on 4 October, that a full review of mortgage endowment sales would “not be in the consumers’ best interests”, would settle the matter, it must have been sorely disappointed by the reaction. Consumer groups have professed astonishment that the FSA has not obliged the firms which sold the products so enthusiastically in the eighties and early nineties to take responsibility for identifying cases of mis-selling and contacting the buyers directly. The regulator has instead stuck firmly to its decision to require firms to advise policy-holders of the projected value of their endowments and any shortfalls at term, leaving the home-owners to seek compensation for any perceived mis-sale, first through the firms and, if they remain dissatisfied, through the Financial Services Ombudsman.The Financial Services Consumer Panel is far from happy with this approach. In a statement it said, “It should not be left to customers to go through the time-consuming process of making a complaint where the fault lay with the company with which they were unfortunate enough to deal.”