Case for mis-selling of investment?

within29

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60
What a brill result. I am in the same situation with an Aunt except she was advised to invest in the Evergreen fund. She is 60, thought it was a deposit a/c, has no factfinder, reasons why. Requested a copy over 2 weeks ago. Told this morning not even processed. Am writing to FO.
Any advise/thoughts would be appreciated.
 

Dave Vanian

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Messages
608
What a brill result. I am in the same situation with an Aunt except she was advised to invest in the Evergreen fund. She is 60, thought it was a deposit a/c, has no factfinder, reasons why. Requested a copy over 2 weeks ago. Told this morning not even processed. Am writing to FO.
Any advise/thoughts would be appreciated.
Make sure you document all contact with the agent, as the Ombudsman will look for this.
 

Mpsox

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Messages
1,615
I wnet with my sister to a meeting with an IM of a large well known bank a couple of weeks ago. He was encouraging to invest a 5 figure sum in one of their funds. She was tempted but when I took all of his sales paperwork away and looked into it in more detail I discovered that he had never mentioned a 5% annual fee and the sales paperwork was so vague and confusing it was hard to see where it clearly stated the charges and costs. I've worked in Financial Services(back office, not sales) for 20 years and when we went back in to see I really enjoyed ripping the guy slowly to shreds and taking his "proposal" to pieces

I have no agruement that the majority of IMs are decent and trustworthy but mis-selling happens and there are chancers out there. Buyer beware is all I can say
 

eiregal

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210
within29, you should put your complaint in writing to the relevant department at the bank. My mother did this and received a standard reply stating she would be contacted within 20 working days. This didn't happen. She phoned the person the letter was from whom advised her she would receive correspondence from their legal department by the end of that week. This didn't happen. She again wrote to the relevant department enclosing a copy of her previous letter. She received the same letter stating she would be contacted within 20 working days, but this time the exact same letter was in a bigger envelope! She tried phoning the person several more times and left messages on each occassion but none of her calls were returned. In her final message she told them she was left with no option but to involve the Financial Ombudsman. Within a day or two, the Area Manager contacted her offering to meet with her.

My advice would be to put everything in writing and keep copies. If you telephone them, keep note of the time and date you called and what your response was. If this still fails, write to the Financial Ombudsman outling the situation and let the bank know you're contacting the FO.
 

within29

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60
Eiregal she was told docs would be with her within 10 working days & its been 13 now. Think I will send them a short letter requesting funds & interest back. Should it be addressed to the branch manager
 

eiregal

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210
Tell them in the branch that you wish to make a formal complaint and ask them whom you should address it to at Head Office.
 
D

Dogbert

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Is it just me or does anyone else feel a little uneasy on this topic?

First up, please be assured I am not casting any aspersions about eiregal or her mother, and my point is general rather than specific. But a summary of what happened in that case (and lots of others we hear about) might be as follows: visited bank and asked for advice; didn't do any research or make any comparisons; didn't listen to what they told me or ask any questions; didn't read what they sent me but signed up for a product anyway. If it goes up, great; if it doesn't then I'll ask for my money back. The authorities will support me because I am the small person against the big institution.

Is this not creating a situation of moral hazard? I know the banks have a responsibility to SELL their products property (and that they don't always do so), but do we as consumers not also have a responsibility to BUY them properly?

Dogbert
 
M

mercman

Guest
Dogbert & eirigal, have a look at my post at 'http://www.askaboutmoney.com/showthread.php?t=72752' It is also posted on a number of other threads as well. Basically the people selling the Policies could not give a damn about you or the funds, as long as they get their Commission.

Eirigal, from the information you have given, I have two cases at the FO at present in relation to investments which amount to a seven figure sum. Bottom line this Bank are nothing but a parcel of gangsters.
 

Dave Vanian

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Messages
608
Is it just me or does anyone else feel a little uneasy on this topic?

First up, please be assured I am not casting any aspersions about eiregal or her mother, and my point is general rather than specific. But a summary of what happened in that case (and lots of others we hear about) might be as follows: visited bank and asked for advice; didn't do any research or make any comparisons; didn't listen to what they told me or ask any questions; didn't read what they sent me but signed up for a product anyway. If it goes up, great; if it doesn't then I'll ask for my money back. The authorities will support me because I am the small person against the big institution.

Is this not creating a situation of moral hazard? I know the banks have a responsibility to SELL their products property (and that they don't always do so), but do we as consumers not also have a responsibility to BUY them properly?

Dogbert
I agree that the fact that markets have dipped in the last twelve months is likely to give rise to an increased number of spurious complaints. (Like you, not suggesting that any of the complaints mentioned in this particular thread are spurious.)

This, I believe, is where good regulation and processes come in. If any seller of investments (bank, broker, tied agent) is able to document the fact-find, Terms of Business letter and "reasons why" letter and document that these were read and signed by the client, they should be able to defend themselves against people complaining just because the investment dropped in value.

It should also weed out the dodgy sellers who recommend high-risk products to widows and orphans.
 

eiregal

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Messages
210
Just to correct you on a couple of points there Dave. My mother didn't visit the bank and ask for advice. The bank made contact with her on several occassions. They initiated it. The problem wasn't that the value of the investment went down. The problem was that my mother had no other money to keep her going while her investment was locked in long term. She wasn't told it was a long term plan.

Also, you say 'didn't read what they sent me but signed up for a product anyway'. They didn't send her anything before she signed up. The FA verbally advised her on the product and she signed up.

In hindsight, obviously she shouldn't have signed up like that. In reality, how many aged 60+ people are going to fully research a product that a 'trusted' bank official is advising them to take? Not many I'd say. The bank clearly knew they were in the wrong anyway, or else they wouldn't have given her back the money with little fight.
 

PaddyW

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1,270
Well, it looks like the bank knew they were in the wrong and that incorrect advice had been given, otherwise there's not a hope in hell they would have settled so easily. They don't give away their own money that easy do they?
 

GSheehy

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Messages
328
My mother didn't visit the bank and ask for advice. The bank made contact with her on several occassions. They initiated it.
I think that you have hit the nail on the head here. There is little or no safeguard for the consumer in the regulator system to protect the client from the Banks 'sharing' deposit/current account information with the Life Assurance arm of the same institutions. If there is, I may have missed it.

I am sure that you will find that there is no pressure, at the moment, to 'cannibalize' their deposit book of business into the more profitable (for the bank/life assurer) investment products. They will be looking at their deposit/current account base as a 'good' liability, on the balance sheet, for the immediate future.
 

Dave Vanian

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Messages
608
Just to correct you on a couple of points there Dave. My mother didn't visit the bank and ask for advice. The bank made contact with her on several occassions. They initiated it. The problem wasn't that the value of the investment went down. The problem was that my mother had no other money to keep her going while her investment was locked in long term. She wasn't told it was a long term plan.

Also, you say 'didn't read what they sent me but signed up for a product anyway'. They didn't send her anything before she signed up. The FA verbally advised her on the product and she signed up.

In hindsight, obviously she shouldn't have signed up like that. In reality, how many aged 60+ people are going to fully research a product that a 'trusted' bank official is advising them to take? Not many I'd say. The bank clearly knew they were in the wrong anyway, or else they wouldn't have given her back the money with little fight.
To clarify - most of the points you are referring to were made by Dogbert, and quoted in my reply.
 
D

Dogbert

Guest
Hi Eiregal,

It was indeed I that made the comment you refer to. But in fairness, your own memory of the events appears a bit selective, if I may say so. If you look back to your first post on this thread, you told us that your mother "came into a small bit of money and went to her bank for advice as to what to do with it".

So I stand corroborated, not corrected!

Also I would be amazed if the bank did not give her a brochure or some other piece of documentation. I suspect they are obliged to do so. Nearly all these products have some sort of cooling off period during which you can change your mind.

So I am not suggesting your mother was not given bad advice (we don't have anything like enough information to judge that). But I am saying she took the advice without asking any questions or doing any analysis (and I know, lots of people do exactly that). And in my view, consumers as well as advisers have responsibilities in financial planning.
 
M

mercman

Guest
Dogbert, the only responsibilities consumers have in instances like this, is the reading and absorbing of the information they are given. The providers of investment products in this country leave awful lot to be desired. In my case the FO are now awaiting near 3 months for a Final Response Letter even though they have been reminded at least four times.

The next step for the Regulator is to sift through these providers, which I am led to believe this will happen in the New Year.
 
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