In the year to March 2004 the ombudsman received almost 52,000 complaints about endowment policies linked to mortgages.

It has set out the way it decides on these complaints, and given some helpful examples of cases, which are summarised below.

If you want more detail about their examples, you can download it here (follow the 'investment' link to the February newsletter).

It is useful to look at these criteria if you are starting a complaint, because insurers should deal with complaints to them in the same way.

This is the main rule:

Compensation is likely to be due only where the endowment policy was wrongly sold at the time and there has been a loss as a result.

Mis-selling

Claims of mis-selling usually raise one or both of these issues:

• Suitability of the policy for the customer's circumstances - with particular emphasis on their attitude to risk
   
• Customers' allegations that they were guaranteed their endowment policy would produce sufficient funds to repay the loan.

Some complaints come from people whose policies continue after they retire. Some policyholders were led to believe this was immaterial since the value of the policy would be enough to pay off their mortgage by then. In other cases the adviser simply failed to consider whether the policyholder could afford to continue the mortgage and premium payments after retirement.

Although it is not mentioned in the examples, churning should always be complained about. If a salesman encouraged you to surrender an endowment policy and take out a new one, he'd better have had an extremely good reason.

Case studies from the ombudsman

1. Mis-selling and financial loss
    
2. Possible mis-selling but no financial loss
    
3. Another mis-selling, but again no financial loss
    
4. Endowment policy extending into retirement
    
5. Another endowment extending into retirement
    
6. Unsuitable policy extended into retirement & adviser was negligent
    
7. Policyholders' attitude to risk
    
8. Mis-selling on the balance of probabilities.