Have we got any chance of endowment compensation?

Q We took out a mortgage in 1984 backed by an endowment policy and then increased the loan backed by a second endowment policy in 1985. The sales advice is still clear in our minds - we were told that the mortgage amount would be guaranteed and the lump sum bonus would probably double that amount. Stocks and shares, risks or 'markets' were not part of the conversation and I was persuaded that inflation/wage rises would overcome the problem of my reaching 65 years of age one year before the policies matured.

We have written to the broker who originally sold the policy (who has been taken over with a clause in the purchase that no debts were to be transferred with the company name), the insurance company (Friends Provident) and the Financial Services Compensation Scheme (FSCS) is unable to help unless the broker gave advice after 1988, which they did not.

We should probably give up and be grateful we have recently repaid the mortgage but the deceit/ignorance in the 1984 sales spiel has a significant effect today. The FSCS advice seems clear cut. We were definitely mis-sold the policies but should we simply give up trying to claim some recompense?

SH

A Without wanting to give you false hope, I don't think you should give up quite yet. The people at the Financial Services Compensation Scheme (FSCS) are right in saying that they can't help with your complaint for two reasons. First, the FSCS exists primarily to help people who want to claim compensation from advisers who have gone out of business or who are no longer trading (which doesn't seem to apply in your case). Second, they are prevented from helping with cases where advice was given before April 29 1988 because - and this comes as quite a shock to a lot of people - legislation relating to the regulation of financial services did not come into effect until that (relatively recent) date and changes in the law cannot typically be applied retrospectively.

In theory, this cut-off date also applies to complaints that the Financial Ombudsman Service is able to deal with. But in practice, many large companies have voluntarily agreed to allow complaints about policies sold before April 29 1988 to be dealt with by the ombudsman if it cannot be resolved between the company and its customer. Even if your adviser isn't covered by the voluntary agreement (and it's worth asking), Friends Provident may well be - you can check by phoning the ombudsman's helpline on 0845 080 1800.

If it turns out that you can't take your complaint to the ombudsman, the alternative is to pursue your complaint through the courts. But, unlike using the service provided by the Financial Ombudsman Service, this would not be cost-free.