Endowment mortgage complaints ignored by banks

28 October 2004 / by None
The Financial Ombudsman Service is inundated with complaints from people who were mis-sold endowment mortgages as banks and insurance companies ignore basic guidelines.

The service says that banks are avoiding dealing with the complaints themselves as a result complaints have soared by 40 per cent. The FOS is expecting to receive 70,000 in total this year.

The backlog is now so large it believes it may take as long as a year for an endowment complaint to be handled.

FOS spokesman, David Cresswell said: "For every 100 endowment complaints made to some companies, 20 are reaching us. This should not be happening."

He added: "With other financial products we get two or three complaints for every 100 made to the company."

Guidelines on how various forms of endowment complaints should be handled by firms have been in place for three years.

"It is clear some banks are holding on to complaints for eight weeks and hoping that if they ignore the people, they will go away," Mr Cresswell added.

"In many cases they have not even opened a case file so we have to start from scratch and gather all the evidence."

The spiralling workload has forced the FOS to recruit more staff. It hopes to hire an extra 100 people, doubling its headcount to 950 by the end of the year.

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