Capital letters

Now, we face an endowment shortfall of £66,700 at a 4% growth rate and £23,000 if Norwich Union manages 8%. At the same time, we are paying more than twice the going rate for our loan.

Where do we go now?

CB,

Kent

Ouch! You are caught between root-canal treatment and multiple extractions. You are unable to offset your shortfall with lower interest. At 12.66%, you pay around £1,540 a month in interest - plus £199 for the policy.

Both loan and endowment were bad advice. But you are stuck with the mortgage unless you can afford the £60,000 plus redemption penalty which Norwich Union can demand, based on the gap between present yields and your interest rate.

The original documentation only mentioned this penalty in the vaguest of terms. You could remortgage at around 6% but after the penalty, you are no better off.

The fixed rate was aimed at doctors whose different contract enabled them to ignore interest rates. You should never have been locked into this mortgage, but loan selling was not regulated.

Norwich Union does not want to know about your endowment - it says the IFA was responsible - even though its compliance people should have noticed its link to your practice. Your surrender value is £25,700 against the £30,000 paid in.

But despite the business loan status, you should complain to the ombudsman. Try this line. Endowments can only work if the return is greater than the interest. Even in 1992, no one expected long-term returns topping 12.66% - let alone 14.66%. So it had to fail.

You should also question the suitability of a 25-year policy for a business - as you might have given up your practice for teaching or hospital work.

Card fraud case resolved

On March 19, I discovered there had been four fraudulent transactions totalling £1,590 on my Halifax current account using my Switch card. One was for a phone bill; the other three were payments to a store card. All were around £300 to £500.

I contacted the Halifax that day. I was told to obtain a police crime reference number. It turns out it is the bank that needs to get this, not me.

Since then, there has been silence from the Halifax. It is a huge sum of money for us to lose - cash that was earmarked to pay for this year's family holiday.

Can you help?

RM, Lancashire

The Halifax failed you on several counts. It omitted telling you how long an investigation would take, or when you could expect a refund. And it also ignored your letters and local branch appeals.

But Capital Letters has had more success. The Halifax is apologetic over the near two months this has taken. It has now refunded the £1,690 to your account. And it will recompense you for any interest or other charges incurred as a result of the fraud. And, as a "sorry" gesture, it will credit your account with £100.

Why doctor's policy is sick

In 1996, I was a newly qualified (and financially clueless) doctor. At the hospital where I worked, an IFA sold me - and many of my equally clueless colleagues - a Standard Life Homeplan. I was to pay £50 per month for 25 years, with a target return of £30,360.

The last time I heard from Standard Life, it told me the fund cash-in value was £3,784 against the £4,200 I had paid.

I was also informed that the plan was at risk of not reaching the target amount at maturity. I do not think that I should have been sold this policy. But if I cash it in, will I be even worse off?

PH, Essex

Cashing in will lose you around £400 plus all the interest you could have made over nearly eight years.

But just why you - or any of your colleagues - needed an endowment is unclear.

There were plenty of other ways to save where less of your money would go in costs (and commission). And as a single woman with no dependents, plus good life cover from the NHS, you had no need of a policy. It seems the £50 was based on what the seller thought you could spare than on real needs.

Your first port of call is to complain of mis-selling to the Yorkshire based IFA who sold this. You should be offered a refund of your contributions plus interest.

If this fails, go to the Ombudsman. And tell former colleagues to do the same.

Floored when firm folds

Last June we had a solid wood floor installed in our new-build property. The job was incorrectly done and within weeks the entire floor had buckled and needed to be redone. After many broken promises to refit the floor, we discovered the company had gone bust.

Since we paid for the job on American Express we then attempted to claim back the costs we paid plus extra costs incurred in order to do the job correctly (an extra £1,500).

Amex was extremely reluctant to get involved and after many attempts to put me off told us we would only be entitled to our money back and nothing more.

I don't want to accept their offer if I am in fact entitled to receive the full cost of having the floor redone. Could you tell me what Amex is liable for under the Consumer Credit Act? Nobody else seems to know.

CB,

Lancashire

The Consumer Credit Act makes a lender "joint and severally liable" if a supplier paid with the card fails providing the amount tops £100.

But this consumer protection is designed to put you back into the position where you would have been had you not made the transaction.

Amex has fulfilled its obligations. If it gave you more, you would profit unfairly.

Shock figure on statement

Looking through the direct debits on my Citibank internet bank account, I saw an entry under "Last Payment" for £999,999,999.

I rang Citibank who told me that this is a system generated number from its newly installed software for all new direct debits.

Citibank said I could not cap the payments that could be removed from my account- even though a fraud could clean me out. Obviously, the sum was ridiculous, but if someone claimed £9,999 it could take all my money and leave it at that.

What is going on?

TW,

Bradford

Citibank likes to specialise in richer customers but surely none could stand paying a direct debit just one pound short of £1bn.

What occurred is that Citibank has been upgrading its system and has tested its new direct debit methods on a number of accounts.

But this enormous deduction was not planned. What should have happened is that the test amount should have been £0.00 and that it should have been accompanied by an explanation to reassure you it was a test and not a real direct debit. The explanation you were given was not helpful.

You are not the only Citibank customer to have been hit by this problem, which has now been resolved. Citibank will apologise for this shock and in the meantime, you are protected by the direct debit guarantee.

Risk with card direct debits

You wrote about the way insurance companies try to take money by direct debits for a renewal last week.

I agree that this form of inertia selling is wrong, but surely you made an error in mentioning bank account and credit card direct debits in the same sentence?

MS,

Devon

Yes. We tried to squeeze too much into too little space. While you have lots of protection including the guarantee on bank accounts, you have virtually no come-back on a credit card direct debit. Technically, these are known as a "continuous payment authority". This is very one-sided. You cannot stop a payment by cancelling it as only the recipient can do this.

Even cutting up your credit card will fail to protect you. This is a major failing by the banks.

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