Endowment case goes to court
A couple had to take Lloyds TSB to court when it refused to pay compensation, despite accepting that it had mis-sold an endowment mortgage to them in 1988.
Since the customers had paid off a portion of the mortgage, the loan was smaller than the current value of the endowment policy. Because of this Lloyds TSB claimed that no payment need be made according to FSA guidelines and the Ombudsman rejected the complaint.
Dissatisfied with the ruling, the couple filed their case at a small claims court where a judge ordered Lloyds TSB to pay £5,000 plus costs.
The Telegraph is reporting that the case may lead to a flood of new compensation claims going to court, but warns that no win no fee endowment claims companies may require a substantial premium for taking high risk cases to court. Alternatively individuals are free to pursue cases through the courts themselves, although they then take on the associated risks.
