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Mortgage mis-selling victims could miss out

Date: Tue, 30 Nov 04 Analysis

Victims of the endowment mortgage mis-selling scandal could miss out on compensation payouts from the Financial Services Compensation Scheme.

Those victims whose provider went out of business before December 1, 2001 may not qualify for payments under the scheme due to a provision contained in the Insolvency Act 1986, which requires creditors to claim compensation within two years of a firm being declared insolvent, according to the Daily Telegraph newspaper.

While the scheme will pay out to clients of firms that went bust after it was launched in December 2001 regardless of when the claim is made, those claiming on firms declared insolvent before that date may miss out.

However, many homebuyers took out their endowment mortgages in the 1980s and early 1990s and som might miss out on the protection.

The Telegraph cites the case of Timothy Turner who was mis-sold his endowment policy by The House & Mortgage Centre in the late 1980s.

While the firm was dissolved in 1995, Mr Turner was not aware of any problems with his mortgage until 2000, three years after he should have lodged his claim for compensation.

He stated: "It [The House & Mortgage Centre] went bust five years before I received my first warning letter."

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