Warning Letters

Eaton Legal Services


We deal with endowment mortgage complaint letters on a no win no fee basis and if the application is unsuccessful we will not make any charge to you. Our endowment compensation claims are completely risk free and you will not have to fund or pay for any expenses during the course of the claim. If you would like free financial advice on the telephone, without obligation, just complete the contact form.

About 4 out of 5 policies are unlikely to realise sufficient cash at the end of the term to pay off the money borrowed to buy a house. It is a legal requirement of banks and insurers to write to their policy holders once every two years to outline the investments current condition and whether or the fund is on track with sufficient anticipated funds to settle the debt at the end of the term. The Financial Services Authority (FSA) has banned insurers from giving advice in the shortfall letters which should be obtained from an independent source.

If the policy holder receives a ‘green letter’ then it means that the investment made by the company with your instalment payments is on track to pay off the loan however this does not necessarily mean that things cannot change in the future. It is generally estimated that an annual growth of at least 6% a year is necessary to maintain a fund to prevent it from falling into arrears.

An ‘amber letter’ means that there is significant risk that the policy will not be sufficient to pay off your mortgage at the end of the term.

A ‘red letter’ indicates that there is a high risk of the fund that can be realised when the policy matures being insufficient to pay off the outstanding debt.

At the present time policyholders must lodge a complaint about the anticipated shortfall within three years of becoming aware of a problem which is usually deemed to start when their first “red letter” is received.

Merely because a policy isn’t performing up to expectations does not mean that there is a case for mis-selling and initially an endowment mortgage complaint should be made to the company who sold the policy. If the company fail to resolve the issues then the Financial Ombudsman can in certain circumstances become involved. The Financial Ombudsman awarded compensation in over 5,000 cases last year. Legislation introduced in 1988 draws a distinction between policies take out before or after the legislation came into effect.

It is likely that there will be a successful outcome if it can be shown that the product was unsuitable at the time it was sold or if the risks were not fully explained or if you were mislead or given guarantees as to the amount of money that would be available at the end of the term.

0845 456 8669