Is this right?

xxlaurissaxx

My mum put £10,000 away into bonds 2 years ago as advised by her bank. She called them up just before xmas to withdraw £2000 as she needed it and received the money ok. the man on the phone told her she would lose a little of the money for withdrawing it (around £500) the guy said he could not give her an exact amount as they can not calculate it???
Now on calling them up she has been told they have taken £1500! for withdrawing £2000! She is really annoyed as she was wrongly advised and would have not withdrew the cash if she knew she would lose 75% of her withdrawal. She has called them up loads of times and keeps getting passed on to different departments.

Its really getting her down as she has been off work for the last year ill and is struggling to cope with all the bills etc.

Are they allowed to do this?

Could she claim some of it back?

Any help would be really appreciated.

Thanks xLx

Lokolo

Hm, sounds a bit extortionate but its more than likely in the T&Cs.

A fixed term bond usually always has a penalty for early withdrawel.

dunstonh

When you say bonds, do you mean fixed term deposits, investment bonds or guaranteed equity bonds?

Are they allowed to do this?

Irrespective of the product, almost certainly it will be in the product terms and conditions.

Could she claim some of it back?

It would help to know what she has first. However, its unlikely.

AndysDad

Sorry to hear the bad news about your mothers bonds.You might get better info if you give a little more information, as its whats in the small print that will determine if its right or wrong.

cheerfulcat

" As advised by her bank " - were these investment bonds by any chance?

dunstonh

Im thinking GEBs. They do have a defined early surrender charge but you only get the guarantee on maturity and with the FTSE dropping 40% in november and suffering a charge, the figures would be about right.

gozomark

do you mean they withdrew 2,000 but only gave her 500 of it, or they gave her 2,000 and withdrew a further 1,500 as penalty ?

ie is it a 75% penalty as you say (ie 1500/2000), or a 37% penalty (1500/3500)

malik999

OP

>Are they allowed to do this?
///////////// Yes if its in your terms and conditions. You need to check your agreement. Bonds do indeed typically have high penalties which is only fair that's why they are Bonds.

>Could she claim some of it back?
//////////// Your can try and argue the point but unlikely if its in your agreement terms/conditions.

xxlaurissaxx

ll need to ask my mum and have a look at the t&c's.

Yes she withdrew £2000 and a futher £1500 was taken as a charge.

As I said, she wouldnt have withdrew this cash (probably get it from family) but the guy advised it would be about £500 not £1500.

It was the Royal Assurance if that helps decide what types of bomds it is.

xx

dunstonh

Ahh, so its not a savings product but an investment product.

That would explain the penalties. Its almost certainly a Guaranteed Equity Bond. The guarantee on capital only applies at maturity. Not in the interim period. So, part of that money is probably down to loss of capital rather than being a fee.

That said, I am keeping an open mind as Royal Assurance doesnt exist. Although Royal Scottish Assurance do and the RBS group retailed those (and they were GEBs).

xxlaurissaxx

Thats who it is and it was the RBS who told my mum she would make the most money out of them. Is 75% of the total withdrawal justifiable tho?
They said if she took out the rest(£6500) thats what she would get but if she leaves it in for a year shed get £7500.
She asked them to send out a statement and they said they would. She received a withdrawal form and no statement? She phone back up again to then be told they cant issue statements?

Do you think she could get some of her cash back since they wrongly informed her? I dont want her wasting time and money phoning them all the time to be told no

Thanks xx