The Consumer’s Association (CA) has backed the huge number of mortgage endowment complaints being received by the Financial Ombudsmen Service as genuine and not speculative.
Intermediaries had questioned how many were genuine and how many were from people looking for an easy exit from a poor investment.
However, a survey by the CA revealed 86% of consumers were not told their endowment may not pay off the mortgage, while 76% were not asked about their attitude to risk.
Worryingly, once a complaint had been made, the CA also found that two-thirds of the complaints were not being handled within the eight-week time frame set out by the regulator.
Sheila McKechnie, director at the CA, said: “With so many consumers in our survey experiencing delays by companies in dealing with their complaint, it is vital that companies are communicating properly with consumers and keeping them informed of how the complaint is progressing.”
The news comes after the Financial Ombudsman Service (FOS) released figures for the first six months of the 2003 financial year which showed an unexpected boom in complaints.
A statement from the FOS said: “In the spring of 2003, it was agreed that we should budget to receive 60,000 new complaints during the year 2003/2004, including 20,000 mortgage endowment cases. However, given the recent surge in complaints, we now estimate that we will receive 98,000 new complaints during the year. We expect 50,000 of these to be related to mortgage endowment.”