Possible Investment Fraud?

Martyn1981

I would greatly appreciate advice, comments or if similarly affected, your stories on the following.

In April my father invested in a 5 year regular income bond through Barclays Wealth. The investment is called issue X10. The correspondence is on Barclays headed paper, with a 'Woolwich Plan Managers' correspondence address.

The policy has an early investment discount, the following is the entire paragraph, no extra, nothing missing, no asterixs;

Early Investment Discount - Equivalent to 4.5% interest gross per annum on your investment from the date you invest until 7 May 2008.

My father's investment was received (confirmed by an official statement of account from Barclays/Woolwich) on 2nd May 2008. However when the investment strike date (14 May 2008) was reached, only his initial investment was put into the fund. He didn't recieve even 1p in interest.

I check all of his finances for him, though to be fair he's still a very sharp card at 70.

I calculated the interest over 5 days to be just over £27, not much I appreciate, but when a company promises to pay interest on an account, I kind of think they should!

This may seem like a small point , but please read on as I believe there is a larger issue hiding behind it.

Originally, they told us that as the 2nd is close to the 7th, he wasn't entitled to anything. I told them they were having a laugh and to think again. Next they said that the interest was paid and was wrapped up and reflected in the price the units were purchased at. I pointed out that the unit price was 100.00p and therefore the investment hadn't earned a penny.

Next they said they were right we were wrong and if unhappy we should contact the Ombudsman. I told them, 'no problem, been there, done that, thank you'.

Next, they wrote immediately asking my father not to contact the ombudsman and that they would look at the matter again.

They quickly awarded the £27 plus £100 compensation.

They also made about 8 other mistakes, and after 6 months of arguing we recently received the final apology letter which stretches to 4 pages (the worst thing they did was write to my father stating they'd spoken to his wife, however my mother passed away 6 years ago, so this was unbelievably upsetting to him). While the letter confirms that everything we said was right, and that every letter/action from them contained multiple errors, it offered not a single penny of new compensation.

Worryingly, with reference to the interst, and the earlier £100 compensation, the letter states the money was awared because, 'You were unhappy with our response because you felt the wording of our literature was misleading.'

2 things,

I don't believe there is anything misleading in the statement of Early Investment Discount interest, it could well be the clearest piece of financial wording I've ever read, and

secondly, despite assuring me on the phone that all other customers received their interest due, and a promise to put in writing a statement that all customers received the interest as stated in their brochure, they declined to put it in writing.

I'm now going to proceed to the ombudsman, but would greatly appreciate your thoughts on the the Early Investment Statement - is there any wiggle room, and also love to hear from anyone who also invested, or know's someone who has, as I'm now suspicious that they've 'accidentally' failed to pay interest to many or all investors - the main point of my complaint to the Ombudsman.

Thanks for your time, sorry for the enormous saga.

Martyn.

happywarmgun

Good for you.

Can't comment on the specific of your case - but just to manage expectations I currently have a case at the Ombudsman (co-incidently also against Barclays) - the lead time before they even look at it is huge. All paperwork has been with them for four months - so far I haven't even had an advisor allocated to the case. Every four weeks I get a letter telling me they will write to me in another four weeks to tell me they will write to me in another four weeks etc.

Who is the ombudsman for ombudsman?

Good luck with your case though - they deserve to be shamed

Reaper

Sounds as though you have a strong case. I'm guessing but I don't think you will get a great deal more money out them other than a small sum to compensate for your time. However I would urge you to go ahead and do it anyway for the sake of the other investors who were less astute than you and all those they will underpay in the future until they are forced to improve their systems.

Best of luck.

dunstonh

I doubt you will get any more than they have already offered. If they are putting it right and offering £100 on top then that beats the usual goodwill gesture the FOS would ask them to consider.

If you believe the issue is widespread and not unique then you should refer the issue to the FSA. The FOS look at individual complaints. The FSA dont look at complaints but they will investigate fraud or errors which have resulted in a widespread outcome.

Martyn1981

Happywarmgun - 4 months isn't long, my first complaint (also on behalf of my father) took 18 months. I beleive things have speeded up a bit lately as they are no longer snowed under by endownment misselling complaints.

Dunstonh - Interesting point re FSA, hadn't thought of that. Yes they did cough up re the interest, but there are about 7 other issues equally as annoying (but not as important) all of which they recently admitted too, and all involving lies (sounds harsh but true) but not a penny of compensation offered to my father.

Obviously the reference to my mother was the worst emotionally, but how about this financially:- My father had to supply account details to receive annual interest, he gave his building society's bank account number and sorting code, and his account number with them. The BS's account number is 8 zero's (00000000), but when Barcalys confirmed his payment details, they wrote 00000001.

He queried this and a few weeks later they wrote stating that following his request the mandate had been changed. Being a suspicious individual I suggested he check what that meant as no details were included.

When he called again, they then told him that nothing had been changed and that they had the right number.

This went on for 2 months, they even wrote to say they had spoken with his BS and confirmed the number as 00000001. he spoke to them and they said it was 00000000 and that if Barclays used the number 1 on the end BACS would probably bounce it.

The recent letter admits that they never contacted his BS, but fails to explain why it took 2 months and about 20 hours of phone calls to get Barclays to change the number back to the one he supplied correctly at the start. Hence why I have to use strong words like - lies.

I feel he (and I) are owed for about 50 hours of work, about 30 hours of phone calss (most at 4.5p / min), plus compensation for each individual complaint area.

But all that aside, I'm extremely suspicious about the payment of interest at the start, which will of course be compounded by 5 years of interest payments, which would otherwise have been lower.

Like wasting good money after bad, I know that my complaint is wasting good time after bad - but I'm damned if they are going to get away with this.

PS - Could anyone see anything misleading in the original interest statement - seems simple and straight forward to me. Would any company get away with advertising a savings rate then refusing to pay any interest at the end?

Martyn.