Ask Sindie: On the horns of an endowment dilemma

Can our reader go it alone or must he pay a middle man to claim for mis-selling?
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The Independent Online

Q: I may have a case for compensation over my endowment mortgage shortfall, and I'm concerned about the impending time limit for complaints.

I'm not sure whether it's best to pursue any claim against my endowment provider on my own. The potential cost, hassle and inevitable form filling all seem daunting.

Should I engage a claims company to handle the process for me on a "no win, no fee" basis?

I don't know where to turn; what do you think?

DM, via email

A: You can be forgiven for feeling stuck between a rock and a hard place.

On one side is your endowment provider. You don't name the company, but it's part of an industry that has all but lost the confidence of consumers. The wide-spread mis-handling of endowment policy sales has resulted in a raft of fines imposed by the Financial Services Authority (FSA), under its chief executive, John Tiner.

In January, Guardian Assurance and Guardian Linked Life Assurance were fined £750,000 by the FSA for "serious and systemic" flaws in their handling of customer complaints about mis-sold endowments. Abbey was hit with an £800,000 fine last May for similar failures.

But on the other side, endowment claims handlers don't enjoy a gold-plated reputation either. Critics including the Which? consumer group point out that they can charge as much as 25 per cent of any compensation received for an unnecessary service.

"By and large, they offer something that is already in existence for free," says Vicky Taylor of Which?.

She is referring to the established complaints procedure, under which you can take your case - at no cost to you - to the Financial Ombudsman Service (FOS) should you get nowhere with the company that originally sold you the endowment policy.

The FOS could find against you (last year it found in favour of 45 per cent of all mortgage mis-selling claims). But if a claim is valid, it will do all the work on your behalf.

You don't have to be financially savvy to avoid the claims handlers and go it alone. Help is at hand from the FOS on 0845 080 1800 and on the Which? website. See for details.

If you need help from our consumer champion, write to Sindie at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.

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