The Endowment Claims Crisis

Endowment
claims hit 10,000 for year
The number of compensation
claims relating to mis-sold endowment mortgages has risen to
unprecedented levels The Financial Services Compensation
Scheme, which processes claims against firms which are no longer
able to meet their liabilities, says it was inundated with
10,000 new claims in the half-year to the end of September – far
in excess of the forecast of 7,000 for the full year
The FSCS now estimates that as many as 22,000 new endowment
claims will be received during the full 12 months for 2005-06
Loretta Minghella, chief executive of FSCS admitted that the
number of claims submitted was “way beyond our expectations”
However, the rate for endowment claims which are upheld is
steady at 39 per cent whilst the average compensation payment
per claim has fallen from £2,700 to £2,300 per claim
The FSCS has had to recruit extra staff to handle the avalanche
of claims and is outsourcing more to enable it to process higher
volumes and to bring claims processing times down
As many as six million people with endowment mortgages are
facing a shortfall that will leave them in financial difficulty
More than one in three (35%) are still uncertain of where to
turn to see if they are eligible for compensation, according to
new research from endowment claims firm Seeing Red
While compensation is not on offer simply because an endowment
policy has not performed well, people who were not warned about
the risks involved when they were sold their investments could
qualify
The research shows that the number of people now affected by the
endowment crisis is estimated to be six million, with an average
shortfall of £5,800 a policy
It also revealed that 57% of those questioned said they would
like to take action to see if they had been mis-sold the policy
and could recover their losses
However, with more than a third of those questioned claiming
they have absolutely no idea of where to turn for help
That is where Financial Reclaims can help with a professional no
win no fee endowment claims
service

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