Mis-sold homeowners must go it alone

Last week the Financial Services Authority said it would not be ordering an investigation into the mis-selling of up to six million endowment mortgages.

Last week the Financial Services Authority said it would not be ordering an investigation into the mis-selling of up to six million endowment mortgages.

The FSA said a full-scale review was not justified because most endowment holders had done as well as homeowners with repayment mortgages. Low interest rates may have hit returns on endowment policies, but also meant plan holders paid less in interest charges on their home loan.

Disgruntled homeowners whose plans are unlikely to clear their home loans must pursue compensation under their own steam. The FSA plans to produce a fact sheet explaining how to make a complaint, and promises to take action against companies that have been shown to have consistently given bad advice.

In practice this means only those who can prove that their adviser suggested an endowment was guaranteed to clear their mortgage, rather than explaining the investment risk, are likely to succeed.

MPs and consumer rights groups attacked the FSA for failing to stand up for the rights of homeowners.

Simon Tyler, of Chase De Vere Mortgage Management, agrees widespread mis-selling did happen. "But to say endowments were mis-sold across the board would be unfair. It is impossible to predict investment returns 10 or 15 years ahead, nobody knows what will happen. Performance has not been as good as people hoped, but nobody should have guaranteed that it would be."