What do you do on red-letter day?

Millions of endowment mortgage holders are finding out if they face a shortfall on their policy

The sheer scale of the endowment mortgage scandal was vividly illustrated this week by a survey of companies' own forecasts of the number of their customers who will face shortfalls (see table).

The sheer scale of the endowment mortgage scandal was vividly illustrated this week by a survey of companies' own forecasts of the number of their customers who will face shortfalls (see table).

Britain's top financial regulator, the Financial Services Authority (FSA), ruled out an industry-wide review of endowment mis-selling two weeks ago. The watchdog, headed by Howard Davies, had, however, already instructed the insurance industry at the beginning of the year to send out letters to all six million endowment policyholders, advising customers whether they were likely to face a shortfall or not.

According to the research published today by Money Marketing, Scottish Life reported 36.3 per cent of its Profitbuilder House Purchase Plan policyholders would be receiving "red" letters, indicating they faced a definite risk of a shortfall, while 42 per cent of Woolwich Life's policyholders also fall into the red category.

There were two other categories of letter, amber meaning there is some risk, and green showing there is little or no risk of a shortfall.

Endowment providers with a high proportion of policyholders receiving amber letters include Scottish Widows with 64.7 per cent, Scottish Life with 55.6 per cent of its Profitbuilder House Purchase Plan holders, MGM Assurance and Clerical Medical, both with 55 per cent, and Woolwich with 52.6 per cent.

Five life offices were either unable or unwilling to supply figures for the survey. These were Allied Dunbar, Friends Provident, Legal & General, Royal Liver and Standard Life.

The industry is halfway through sending out letters to all endowment holders. If you have already received your letter, and think you have grounds for a complaint about your endowment, you must first contact the firm (or adviser) that sold you the policy. Your endowment company will have included a helpline number when it wrote to you early in 2000.

Firms must have a proper complaints procedure and tell you how to use it. If you bought your endowment mortgage through an independent financial adviser and you want to complain about the way it was sold, then you will need to make your complaint to the firm's compliance officer at its business address.

The FSA guide to making a complaint is available free by ringing the FSA's leafletline on 0800 917 3311. Or click on www.fsa.gov.uk/consumerhelp.

If the firm does not put matters right to your satisfaction, you can take your complaint to the relevant ombudsman. The FSA can tell you which ombudsman to approach. The firm should tell you how to contact the ombudsman. If the firm that sold you the endowment policy has gone out of business or you can't track it down, you can contact the FSA Consumer Helpline on 0845 606 1234 for advice on what to do next.