Time could be running out for home-owners who were mis-sold an endowment mortgage but who haven't yet claimed for compensation, according to the Consumers' Association.

Under current rules, people who think they have been mis-sold an endowment mortgage have three years to seek compensation, after receiving the first re-projection letter.

The clock has already started ticking

Sheila McKechnie, Consumers' Association

The CA said a large number of homeowners will unwittingly face this deadline in early 2003, and it claims the Financial Services Authority has failed to publicise this.

The CA now wants the financial watchdog to extend the deadline by 12 months.

What went wrong?

The CA claims that over 60% of people with endowment mortgages were given bad advice and are therefore entitled to compensation.

The industry has been forced to send letters to warn millions of homeowners in recent years that, because of poor investment returns, their endowment policy will now not pay off their mortgage as originally projected.

But rules dictate that consumers must register a formal complaint to the Financial Ombudsman within three years of receiving the so-called "re-projection letter", if they believe they were mis-sold their endowment.

The CA suggests that for a large number of homeowners, the first indication that their endowment would not pay off their mortgage came in 2000.

Even if an endowment is doing fine at the moment, it still doesn't mean you weren't mis-sold

Consumers' Association

This means they only have a few weeks left to register their complaint.

"The clock has already started ticking," said Sheila McKechnie, director of the Consumers' Association.

"If you were are unsure about whether you were mis-sold an endowment, you must act now because this could be your last chance to complain."

Mis-sold?

Mis-selling could involve not being told about the risks involved or being assured that policies would "definitely" pay off mortgages.

According to current rules, consumers who believe they were mis-sold an endowment mortgage can complain to the Financial Ombudsman service if they do not receive a satisfactory response from their original adviser.

The deadline for submitting a complaint is within three years of becoming aware that there was a potential shortfall.

About 100,000 complaints have already been received since April 2000.

Extension

But the CA is urging all endowment mortgage holders to consider the advice they were given.

"Even if an endowment is doing fine at the moment, it still doesn't mean you weren't mis-sold," said a spokeswoman for the CA.

The consumer watchdog also wants the Financial Services Authority (FSA) to grant homeowners extra time to make their complaint.

"The FSA must throw consumers a lifeline and agree to take action to change the rules to give consumers an extra year to make a complaint," said the CA.