Charged after the event

ellenGB

I rang my bank on two occasions in the last three weeks to ask how I could close an investment account and what was involved. I was told that all I needed to do was to write a letter asking for that account to be encashed. When I talked to the duty manager I repeated back that therefore all they wanted was a letter and that would be that. The duty manager said 'yes'. I asked how much the account was worth and he told me. I was not told that there would be a charge. I have no documentation and was never told that that closing an investment account costs £500. So today, when I handed my letter in, I had a nasty surprise. The manager agreed to reduce the amount if I opened another account or two. Initially I said yes but it made me feel uncomfortable. Surely I had a right to know about the charges in the first place. Given I only made about £2000 (over five years total), the £500 closure fee constitutes a significant proportion of the gains. However, I was prepared to compromise and offered £250 with no strings attached. That was rejected. I know that some banks ask you to leave if you complain to the Financial Ombudsman but this surprise fee seems so wrong. Anyone know where I stand?

the_insider

I've never heard of a bank asking you to leave because you've made a complaint, sometimes they will close your account because they are no longer able to provide you with the service you need. Did you not receive anything at all when you opened the account? Seems a bit odd that you would invest without any paperwork.

dunstonh

I was not told that there would be a charge.

Did you ask if there would be a charge? Or did you ask what the surrender/encashment value is compared to the actual value?

I have no documentation and was never told that that closing an investment account costs £500.

Did you buy it under advice or did you buy it off your own back?

Surely I had a right to know about the charges in the first place.

Yes. However, it depends on how you bought it and what questions you asked.

I know that some banks ask you to leave if you complain to the Financial Ombudsman but this surprise fee seems so wrong.

The banks do not ask you to leave if you go to the FOS.

Anyone know where I stand?

if you bought under advice then the adviser is responsible for making you aware of the key facts and charges. If you bought direct or without advice you are responsible for knowing them.

magpiecottage

dunstonh wrote: »

The banks do not ask you to leave if you go to the FOS.

This has happened in the past. A complaint would be upheld by FOS, or the customer won a court case, and the bank made a forced closure of the account.

This came to light because it would, in some cases at least, result in a further complaint to FOS - which treated it as a separate issue to the original complaint so it could look at it even if the original dispute had gone to court.

I have not heard of it in the last couple of years, though.

dunstonh

This has happened in the past.

Years ago yes. However, the FSA put a stop to that some years back. That was why i kept my context in the present

ellenGB

A lawyer from Which? alerted me to regulations which require the bank to provide you all the relevant information e.g. charges, before you make a decision. Not after. I didn't specifically ask about closure fees as I didn't know about them. I pay the bank to maintain my portfolio. It's their product. Bought after info from their financial advisor. All charges are listed on quarterly reports. Well, as it turned out, all except one. Initial application form did not refer to closure fees. Terms and Conditions certainly didn't note £500. Just required me to pay fees. Three weeks or so ago, I asked twice what was involved in closing the account, thus giving the bank an opportunity to inform me of any charges. They didn't. I wrote a letter to head of bank's investment centre offering a compromise (£250 fee, no strings attached) and they accepted.


Good to know that banks no longer ask 'difficult' clients to leave. (By difficult, I was thinking of all those who challenged their other charges following Martin's campaign).

AVIVA are very good at informing you of the costs of surrendering their bonds.

dunstonh

I didn't specifically ask about closure fees as I didn't know about them.

Doesnt mean you were not given info about them.

I pay the bank to maintain my portfolio. It's their product.

It's unclear what you have. Is it a discretionary investment portfolio? Is it a packaged product with investments?

Initial application form did not refer to closure fees.

doesnt have to.

Terms and Conditions certainly didn't note £500.

If there is no mention of a closure charge then you have a strong case. However, have you asked them for the documentary evidence that shows you were made aware of this charge?

Good to know that banks no longer ask 'difficult' clients to leave. (By difficult, I was thinking of all those who challenged their other charges following Martin's campaign).

It doesnt sound like you have a bank account so that doesnt apply anyway.

AVIVA are very good at informing you of the costs of surrendering their bonds.

Thats because Aviva offer packaged products. What you seem to be talking about is a discretionary investment portfolio service which is not a product but a service.

Hopefully its a not an Aviva product you have gone into. Whilst the product is fine, its been a few years since its been price competitive and there are quite a few better options now.