New Endowment vultures
‘No win no fee’ complaint handlers exploit endowment victims
Companies offering to handle complaints for people who believe they were miss-sold endowment mortgages are charging fees of up to 40% of the compensation recovered. Complaints that only cost an individual the price of a postage stamp.
The companies argue that the complaints process is too complicated for the general public and requires specialist financial and legal expertise. However, customers still have to fill in the same forms that they would need to if making an individual complaint.
Paying a percentage of the compensation is a complete waste of money as free advice is available from various sources, including the Financial Services Authority and the Consumers Association, who offer a step-by-step guide to making a complaint and standard letters. Alarmingly, these companies do not fall under the jursidiction of the FSA.
According to many of the websites offering this service, these companies have a much greater chance of getting compensation than individual complaints. Little proof of this is offered and there is no reason why this should be so, as all complaints and compensation awards are considered under standard criteria.
The compensation offered is designed to put the customer with a policy linked to a interest-only mortgage in a position they would have been in had they taken out a repayment mortgage. Deducting a fee of up to a third leaves people even worse off than before.
An Early Day Motion raising these concerns will be tabled when the House of Commons returns in September.