David Prosser: Endowment victims need FSA help

B&B's argument is that there is no need to hand over a slice of your endowment compensation to a claims handling firm when you would get exactly the same result if you complained yourself.

But the claims handlers say companies that have mis-sold endowments are using dirty tricks to limit the compensation they must pay - and that the Financial Ombudsman, to whom you complain if you're unhappy with your endowment provider's offer, is letting them get away with it.

For millions of borrowers wrongly advised that an endowment plan would be sure to pay off their mortgage, the row is deeply worrying. It's certainly not difficult to paint a picture of claims handling companies as ambulance chasers that are cashing in on borrowers' misfortune. But endowment providers are hardly a trustworthy bunch either - no-one would be surprised to discover they're involved in a sneaky damage limitation exercise.

However, borrowers should not have to work out who is trying to pull the wool over their eyes. Consumer protection is the key objective of the Financial Services Authority, the chief City regulator. It should intervene in this dispute.

Unfortunately, the FSA seems to have gone AWOL. This week, its staff have not even been able to say categorically whether B&B is acting legally in declaring it will not deal with claims handlers. In theory, consumers are allowed to appoint an agent of their choosing to represent them when they complain to a financial services company.

More worryingly, if the claims handlers' accusations are accurate, the FSA is guilty of a shocking failure to protect vulnerable consumers. There are supposed to be set formulas and procedures that endowment providers must follow when considering complaints and calculating compensation - and the FSA is supposed to audit the process. Yet the claims firms say providers are engaged in a systematic attempt to bend the rules.

Is the FSA running scared after its high-profile defeat in a court case brought by Legal & General this year? The insurer successfully challenged an FSA disciplinary decision - proof for many of the regulator's critics that it has overstepped its powers.

This is not the time for the watchdog to lose nerve. Some five million people have been wrongly sold endowment-linked mortgages and time is running out for them to complain. If the FSA did its job properly, these victims would not feel they had to use a claims handling firm in the first place.

* Footballers are getting used to packing the suntan lotion alongside their kit - the season seems to start earlier every year. But if you're off to the first league match of the season today - or looking forward to next weekend's kick-off in the Premiership - make sure you think twice before accepting your club's offer of financial services.

For many clubs, products such as savings accounts, credit cards and insurance now provide valuable revenue. But in almost every case, these "affinity" deals - they are underwritten by banks and building societies - are poor value compared to deals available elsewhere.

By all means support your football club in any way you can. But try not to find yourself scoring a financial own goal.