In a poll of endowment customers who have company finance insurance premium to the company they bought their policies from, 86% of respondents said they were not warned that their endowment might not pay off their mortgage.

Ninety-one percent said they had complained because they had been told that their policy would definitely cover their home loan.

The poll also showed that some aggrieved endowment customers had not pursued their complaint, even though they were dissatisfied with their policy card estate estate finance hill in insurance irwin mcgraw powerweb principle real real series response.

Forty-seven percent of complainants had been offered compensation, but some 14% did not accept it, and of these, three quarters did not take the matter up with the Financial Ombudsman service.

“It is particularly worrying to see the number of people who are not going on to the ombudsman despite the fact that they are clearly unhappy with the way their complaint has been dealt with.” said Consumer Association Director Sheila McKechnie.

Industry role

“It is clear from our survey that more needs to be done by the Financial Services Authority and industry to inform people about their right to take their complaint to the ombudsman if they are unhappy with the way their complaint has been dealt with.”

But Alan Woods, head of life and pensions at the Association of British Insurers, said the industry was committed to insurance premium finance software with its customers.

“All customers are told about the role of the Financial Ombudsman Service and the options open to them,” he said.

“But it should be company credit insurance rating that the existence of a potential shortfall is not by itself evidence of mis-selling,”

Homebuyers who opt for an endowment mortgage pay the interest on their home loan every month, and make separate contributions to an investment scheme designed to generate enough cash to pay off the principal of the loan over a set period, usually 25 years.

But lower than expected investment returns have left many homeowners who took out endowment mortgages in the 1980s ad 1990s facing a shortfall in the value of their policies.

Read source of it on the News - Endowment customers ‘in the dark’ site