4.1 Pre-Contract: The Understanding of Investment
You will recall that, subsequent to my May 1993 telephone enquiry as to the current status of our investment in our Endowment Mortgage Contract (it had been in existence for almost two years at this stage), we were forwarded a letter (see Appendix 1/7) by Irish Life wherein it clearly stated :
‘During the first year of the policy there is no investment due to the various start up costs like, stamp duty, commission and initial expenses. From the second year onwards there is 96% investment of your premiums each month in the Homeway Mortgage Fund Series 4.’
| (1) |
There is nothing whatsoever in the First National Building Society’s HOME MORTGAGES explanatory pamphlet (see Appendix 1/1) that indicates that there is NO INVESTMENT in the first year of an Endowment Mortgage Contract, and that from the second year onwards there is only 96% investment. |
| (2) |
There was no mention whatsoever by the First National Senior Official, when explaining the Endowment Mortgage Contract and giving advice on same, of the fact that during the first year of the policy there is no investment, and that from the second year onwards there is only 96% investment. The First National Senior Official said that the Gross Monthly Payments to Irish Life were invested in an Endowment Policy with Irish Life and that, with their Endowment Mortgage, all growth achieved is ‘locked in.’ So, from my point of view, as a consumer receiving the ‘expert advice’ of the First National Senior Official, the clear understanding being given of the investment process was that ––––– monthly payments made by my wife and I to Irish Life would be INVESTED by them in the Endowment Policy –––– growth would be achieved by that investment –––––––––– and ‘locked in’. There was no question but that the money paid by my wife and I would be INVESTED by them and growth would be achieved. |
| (3) |
Again in the Mortgage Quotation Comparison (see Case 1 of Appendix 1/2), that was the kernel of the advice given to me by the First National 'expert adviser', it clearly stated that : ‘ Home–way Endowment premiums are invested in the Home–way mortgage fund. All growth achieved is immediately locked in’. Again, the clear understanding is that premiums are INVESTED in a specified fund (the Home–way Mortgage Fund) and that growth is achieved. |
So far we have scrutinised:
| (i) |
the First National Building Society’s HOME MOTRGAGES explanatory pamphlet, which was similar to that given to me by First National PRIOR TO the Time of Contract, |
| (ii) |
the Representations made and the Advice given by the First National Building Society’s Senior Official PRIOR TO the Time of Contract, |
| (iii) |
the Mortgage Quotation Comparison, comparing the figures for an Endowment Mortgage to those for a Repayment Mortgage, as proffered to me by the First National Building Society’s Senior Official when giving ‘expert advice’ PRIOR TO the Time of Contract |
–––––– and, as yet, we have found nothing that indicated that there is ‘no investment in the first year’ or that there is only ‘96% investment from the second year onwards’.