This is the seventh of the examples provided by the ombudsman, which we have listed here.

Background

The policyholders said they had not been told that their premiums would be invested in funds linked to the stock market.

The representative had dealt with the matter of affordability but there was no evidence that he had discussed their attitude to investment risk or given them risk warnings.

The ombudsman service established that the couple were 'no risk' investors, and thought it unlikely that the representative understood how endowments worked. He said in correspondence with the ombudsman that endowments were 'not invested in the stock market' and were 'minimal risk'. This suggested that he might have given the couple misleading information.

No compensation was payable as the couple had not suffered any financial loss, but the company contested the provisional assessment of the ombudsman service that the complaint should be upheld, because of the couple's attitude to risk, and because misleading information might have been provided to them.

The debate

The company argued that the representative's comments in his correspondence with the ombudsman were part of 'communication between two professionals' when 'careful wording' was not necessary.

The company also said that there was no such thing as a 'no risk' investment: even banks could fail. There was therefore risk attached to repayment mortgages - in particular, 'failure to maintain repayments may lead ultimately to repossession of the property by the lender'.

The ombudsman service rightly rebutted these weasel arguments, and the Ombudsman's final decision upheld the complaints.