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Endowment complaints double

Complaints about endowment mortgages have more than doubled in the last

year, according to the new financial ombudsman service.

The news comes as the FSA reveals to Money Marketing that three million

reprojection letters have been sent out to consumers tellingthem of

potential shortfalls on their mortgages.

The financial ombudsman service says complaints are now up to 500 cases a

month from 200 last year.

The new ombudsman, which takes over from the five existing ombudsmen and

three complaints&#39 handling schemes once the Financial Services and Markets

Act takes effect, puts the rise down to adverse publicity. It expects a

further increase asa result of the letters.

The bulk of the complaints arise out of dissatisfaction with the advice

given but some are due to the way the endowments have been set up, for

example when they run past retirement.

Between five and six million letters in total will go out from providers.

Life office Standard Life only started sending them out this week after

last week&#39s vote on demutualisation.

The letters are colour-coded red, amber and green according to the

potential risk of a shortfall. They advise investors on their options in

the event of a shortfall.

Around 40 per cent of complaints being made to are currently awarded in

favour of investors although some decisions are not formally binding. Cases

can also be settled at an earlier provisional assessment stage.

Financial Services Ombudsman David Cresswell says: “It is both a detectable and significant rise, probably due to all the publicity.

“Complaints have been creeping up on a monthly basis. The letters also

have a long tail and not everyone has received them yet.”

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