Only one in 10 recalls endowment caution

The financial services authority was urged yesterday to carry out a thorough review of endowment mortgage mis-selling after research for the City watchdog revealed that fewer than one in 10 policyholders remembers being warned of the risk that investments might fail to pay off the loan.

The Consumers' Association, the shopper's watchdog, said the FSA was "being very complacent" when its own survey showed that more than 90% of policyholders believed they received poor advice. It said the situation was made worse by the finding that 46% of policyholders believed endowment products were guaran teed to pay off their mortgage loan.

Insurance companies were last year forced by the FSA to write to 6m households to tell them if their policy was on track to pay off their home loan. Around 45% of policyholders have been warned that there is likely to be a shortfall, due to poor stock market returns.

The government dismissed calls for a wide ranging investigation of the industry along the same lines as the pensions mis-selling review.

Instead, the FSA said it wanted people to complain to their insurer if the believed they had been misled about the risks of using an investment product to pay off their mortgage.