Nationwide sets endowment deadline

Nationwide Building Society is the latest mortgage lender to set strict time limits within which customers who are concerned about mis-selling of endowment policies must lodge a complaint.

From Monday, Nationwide will begin giving customers a date by which they must file a mis-selling claim, if they believe that they were wrongly advised to take out an endowment-backed mortgage.

Under rules set by the Financial Services Authority, endowment providers are entitled to give customers a three-year complaints deadline following the first occasion on which they warn an endowment policy is in danger of not repaying the underlying mortgage in full. Once the three years have ended, borrowers can be "time barred" from complaining.

Nationwide has been one of a handful of endowment providers not to use time bars until now. But executive director Stuart Bernau said that all borrowers should now be aware of their rights.

"The potential mis-selling of endowment policies, as an industry-wide issue, has had a very high profile for many years," he said. "During this period insurance providers and lenders have been writing regularly to their customers advising them of the process they need to follow if they have any concerns."

Nationwide said it would begin notifying customers of complaints deadlines in letters sent out from Monday with the latest projections of their endowment policy values. However, customers will not be affected by the change of heart until they have been notified of a deadline.

Tim Moore, of the claims handling firm, Endowment Claims, said only Prudential was now not using time bars, and urged customers to complain. "Time bars are not only extremely unfair but also potentially flawed," he said. "There is no justification for the insurers to introduce these deadlines, apart from to increase their own profits.