Questions Of Cash: Case of the phantom mortgage

Q. I applied for a mortgage from Scottish Widows Bank on 1 April. I was told on 20 May that the loan had been approved and I'd be sent a written offer soon. I still have not received it, despite various promises.
PD, Surrey

A. Scottish Widows apologises for its mistakes. "Quite simply, our internal administration failed in that we had believed the offer to have been issued when it had not been," the bank admits. The loan has now been offered and issued. Scottish Widows is sending you £100 in compensation.

Q. I have written three letters to One.Tel since January complaining about being charged to receive premium-rate text messages which I did not request or authorise and about incorrect invoicing for the line rental.

The original invoice was for £25, of which I dispute £20, but acknowledge liability for £5.48. The size of the bill has now risen to £98.20 and I am now receiving final demands and threats of court action from two debt collectors. On seeking legal advice, I have sent a payment of £5.48 and reiterated my complaints.
HG, London

A. One.Tel, part of the Centrica group, which also owns British Gas, insists that the line rental element of the bill was calculated in accordance with your contract. But it adds: "We confirm that [the reader's] bills also included charges for unsolicited text messages." In recognition of this and the problems you have suffered in trying to get this resolved, One.Tel is clearing your account and instructing the collecting agencies not to pursue the matter.

However, Nexus, one of the companies named by One.Tel as having sent text messages to you, says it is not possible to send chargeable unsolicited text messages. This view is shared by the regulator of premium calls, Icstis (the Independent Committee for the Supervision of Standards of Telephone Information Services). Icstis points out that this would be in breach of European law and says it has never come across this. What does often happen is that consumers inadvertently subscribe to a premium-rate text-message service - for example, by buying an ongoing service which they believe is a one-off service. Mobile phone users may also not realise the cost of responding to prize draws by text message. Another possible explanation is that a previous user of the mobile phone number signed up for services and has not cancelled these.

Q. I'm a 45-year-old serving police officer with three years to go before I qualify for my 30 years' service pension. In 1993, I was advised by a financial adviser to take out Allied Dunbar FSAVCs (free standing additional voluntary contributions) to obtain a large lump sum to set up my own business.

I have since obtained a review from an independent financial adviser who was astounded that I had been sold an AVC, saying that AVCs were not worth much, with no possibility of a lump sum. He suggested I cancel the plan and put money into a building society account instead.

I now wonder if I was mis-sold the AVCs. I am paying £43 a month into the scheme, and Allied Dunbar has confirmed no lump sum is possible unless pension rules change.
EN, by e-mail

A. The view put forward by your IFA is shared by Phil McGovern, an adviser at MPA Pensions and Investments. He says: "As the rules stand, you can obtain the maximum pension allowed of two-thirds final salary after 30 years' service in the police scheme, if you are at least 50 years of age.

"As you were due to receive the absolute maximum pension after 30 years' service, there was no benefit to you in taking out an FSAVC. Because the value of these benefits exceed the Inland Revenue maximum allowed, you would not be allowed to take these benefits and the value of the pension would be refunded to you with a tax charge applied of 32 per cent, assuming that you are a basic-rate tax payer. FSAVCs cannot provide any tax-free lump sums at retirement, so it appears to me that you were badly advised and that you have a justified complaint."

We put these points to Zurich, which now owns Allied Dunbar. They dispute the suggestion that you were mis-sold FSAVCs. Zurich points out that your police scheme will provide you with a pension based on a fraction of your pensionable earnings and pensionable service, but will not take into account the significant additional earnings you received through overtime and other allowances.

Taking into account that overtime, "you are not in danger of infringing any Inland Revenue maximum benefits as a result of having made payments to your FSAVC," says Zurich. It adds: "We can see no reason to refund any of the payments you made to this plan, and it is also unlikely to be any surplus at retirement that would be subject to an income tax surcharge." On this basis, Zurich says that there is no case for any compensation to be paid.

Given the strong divergence of opinion in this matter, we suggest that you lodge a complaint with the Financial Ombudsman Service (FOS). The FOS has confirmed that it can consider your situation, but that any decision will be subject to complex factors relating to your specific circumstances in 1993.

Questions of Cash cannot guarantee to respond to all queries and we cannot give individual advice. Please do not send original documents. Write to: Question s of Cash, The Independent, 191 Marsh Wall, London E14 9RS; cash@independent.co.uk.