Advice needed urently please

truth57

Hi all. First of all I apologize for the long post. I am an expat living in Spain. About 3 1/2 years ago an advisor set up an OLED account with LLOYDS Bank in Gibraltar. At the time of his visit I was unwell and unable to work (this is still the case), with only my capital to live on and support myself and my wife. I explained my situation fully. He advised me to invest the major proportion of my capital in the OLED account and leave the remainder for living expenses until the investment matured. AT NO TIME DID HE EXPLAIN that there were 'trigger events' that could cause the investment to lose all interest accrued. He also advised me that I needed to spend out, for example on medical treatments abroad, which I did. One year before the investment matured I was already in deep water, not having sufficient income to pay the bills. We were forced to let out our own property and move into a flat, but in fact ended up having to pay more rent than we received. The tenants then stopped paying the rent and the bills, and we were forced to take them to court to evict them, but in the meantime we ended up homeless.
Just prior to the OLED maturing on the 6th I received a call from the manager now dealing with my account informing me that both trigger events had occurred only a short time ago, and as a result only the capital originally invested would be repayable.
Extremely annoyed I read up on this site about making a complaint and proceeded to ask for the bank to send me the relevant forms. However my manager called me back and told me that he had a line manager with him who would attempt to remedy the situation. So my complaint was registered during that conference call during which I was informed that they only had until that afternoon to make me an offer of compensation, and that if I was not happy with their offer I could seek recourse with the International Ombudsman. The fact is however that locking my money away away for several years with the potential of ending up with nothing but the capital invested and leaving insufficient funds available for day to day expenses during that period was simply not good or sound financial advice. I could have made more just leaving the money in my Bonus Saver account and had access to the funds as well!
She made a final offer of £200. I feel insulted, despite the fact that I have read that banks rarely volunteer to offer compensation, but she said that as no actual financial loss had resulted this was the best she was able to offer.
From previous experience with the Ombudsman on another un-related issue I learned that everything is based upon whether or not actual financial loss has been incurred. What I did not mention is that my account manager admitted during the conversation that my investment should have paid out up to 40⅝ interest had the trigger events not occurred. So is that not a financial loss? And what about all we had to suffer as a result of insufficient funds remaining for living expenses? What redress do we have for this?
I don't expect much of a result from taking the matter to the Ombudsman, but now we need to find a way of making the capital that remains work to our benefit. Currently I decided to have the money paid into my existing offshore Bonus Saver account, which is better than nothing, but that pays less than 1% interest - there has to be a better option for us! I have not mentioned details regarding the amounts involved, but there is about 40k remaining, and unless my situation changes drastically that is all my wife and I have to live on for the foreseeable future. Thank you for reading this and thank you in advance for your help and advice.

truth57

Dear Moderator, please move this to the appropriate part of the forum if this is not where it needs to be - I was not sure where to post it.
Would you kindly also edit the title of the topic to read 'urgently' - I tried to edit it myself but was unable to.

Thank you.

dunstonh

Extremely annoyed I read up on this site about making a complaint

This site covers UK. Not overseas. So, you shouldnt expect the same levels of consumer protection. The UK has high levels compared to other countries.

She made a final offer of £200. I feel insulted, despite the fact that I have read that banks rarely volunteer to offer compensation

Banks frequently pay out goodwill offers where there is no need for them to do so. However, again, you should not read UK coverage in respect of your complaint as it does not apply to the UK. For example, a complaint in the UK costs the bank £550 if it goes to the FOS. So, they will often settle small value complaints as goodwill gestures as a cheaper option. The funding of the FOS and the charges it makes does not apply to you or the offshore firm.

From previous experience with the Ombudsman on another un-related issue I learned that everything is based upon whether or not actual financial loss has been incurred.

In the UK it isnt but I dont know about the ombudsman applicable to your complaint.

What I did not mention is that my account manager admitted during the conversation that my investment should have paid out up to 40⅝ interest had the trigger events not occurred. So is that not a financial loss?

No. Potential gains do not become financial loss if they do not occur.

Focus on your complaint with the ombudsman and read up what the ombudsman of your jurisdiction is like. Dont look to the UK for guidance as it is unlikely that your ombudsman will be quite as consumer biased.

Also, look at the paperwork you were issued at the time of sale. Documentation is key in complaints. It can work for you and against you. Allegations of what may or may not have been said verbally rarely succeed as they lack evidence. You could make up anything. They could make up anything. Documentation is what really matters along with your financial position.

Linton

I suggest you talk to an INDEPENDANT financial advisor that knows about expat finances. From your post it sounds like your advisor may really have been a Lloyds Bank salesman.

However £40K may be too small, I dont know. To give you a feel for what is possible £40K invested in shares or share funds could moderately safely give you a long term income of perhaps £1600/year which will tend to rise with inflation over the long term. The more you take the greater chance you have of running out of money at some stage. Or you could get rather more guaranteed for your and your wife's life on a fixed basis if you were to give it all to an insurance company for an annuity. These figures are very rough, just to provide an order of magnitude. Your age of course would be highly significant in such calculations.

truth57

dunstonh wrote: »

This site covers UK. Not overseas. So, you shouldnt expect the same levels of consumer protection. The UK has high levels compared to other countries.

I understand that, thank you.


Banks frequently pay out goodwill offers where there is no need for them to do so. However, again, you should not read UK coverage in respect of your complaint as it does not apply to the UK. For example, a complaint in the UK costs the bank £550 if it goes to the FOS. So, they will often settle small value complaints as goodwill gestures as a cheaper option. The funding of the FOS and the charges it makes does not apply to you or the offshore firm.



In the UK it isnt but I dont know about the ombudsman applicable to your complaint.

Sorry, could you elucidate please - are you saying that the Ombudsman's decision is not based purely on whether or not an actual financial loss has occurred? I am asking for this clarification because my last claim with the UK ombudsman did not go in my favour, apparently precisely because in their opinion I had not suffered a direct financial loss. For this reason they said that they were unable to proceed with the claim...

No. Potential gains do not become financial loss if they do not occur.

Focus on your complaint with the ombudsman and read up what the ombudsman of your jurisdiction is like. Dont look to the UK for guidance as it is unlikely that your ombudsman will be quite as consumer biased.

Where can I obtain such information?

Also, look at the paperwork you were issued at the time of sale. Documentation is key in complaints. It can work for you and against you. Allegations of what may or may not have been said verbally rarely succeed as they lack evidence. You could make up anything. They could make up anything. Documentation is what really matters along with your financial position.

I think the key here is the fact that I was in no condition to sign the contract and did not even realize that the investment would be over such a lengthy period. Would you think it appropriate to advise someone with let's say a total of 70k and no other income nor benefits or pension whatsoever to lock away 40k over a 3.5 year period in an OLED account? If you were to have offered someone such advice and things had turned out as they actually have, would you expect not to be held responsible simply because the client had apparently read and signed the relevant documentation indicating that they understood it fully?
This is no different than all those who were sold life insurance policies that did not apply to their situations. In the end all those had to be refunded.
And how is it that a bank can get away with these kind of 'trigger events' whether the market goes up or down in value? The bank were able to profit from my capital during that entire period - it is ludicrous that there should be zero return - how is it that this is permitted?

BillJones

truth57 wrote: »

The bank were able to profit from my capital during that entire period - it is ludicrous that there should be zero return - how is it that this is permitted?

I'm not going to comment on appropriateness of your investment, as I'm FCA regiistered, and won't give advice over the internet, but on this second point you misunderstand how some of these products work (many of them, in fact).

The bank takes your capital, but instead of paying you interest on it, puts that money into options, or forwards, that will generate your excess return (if certain conditions are met). They aren''t simply pocketiing this money.

For example, if you buy a 5Y capital guaranteed note on the FTSE, for £100, the bank will spend £90 of that on a note that pays £100 in 5 years time, £9 on a 5y call on the FTSE, and will keep £1 for themselves. If the FTSE then drops, they've not "had use" of your £100 in the interim, they've taken the £1 profit, and spent the rest arranging your payout.

truth57

Linton wrote: »

I suggest you talk to an INDEPENDANT financial advisor that knows about expat finances. From your post it sounds like your advisor may really have been a Lloyds Bank salesman.

However £40K may be too small, I dont know. To give you a feel for what is possible £40K invested in shares or share funds could moderately safely give you a long term income of perhaps £1600/year which will tend to rise with inflation over the long term. The more you take the greater chance you have of running out of money at some stage. Or you could get rather more guaranteed for your and your wife's life on a fixed basis if you were to give it all to an insurance company for an annuity. These figures are very rough, just to provide an order of magnitude. Your age of course would be highly significant in such calculations.

Hello Linton, many thanks for this information. Although the advisor held the title of 'Account manager' I believe that you are quite right, and that is precisely my point - he was acting as a salesman, and he sold me a product that was inappropriate to my situation. That is why I want to take the matter further with the Ombudsman.

Regarding my age, I am 56 and my wife is 45.

The £1600 per annum sounds a lot better than the current 1% the bank is now paying me in the International Bonus Saver account! But what access does such an investment provide to the funds, surely it would mean selling the stocks or shares and being exposed to the obvious risk of losing capital?
Could you please explain the insurance annuity you mentioned in more detail?

I am going to do a Google search on expat finances to see what that brings up, but if anyone here can recommend an Independent financial advisor who works in this field and does not charge an arm and a leg I would be very grateful if you would share that information. Thank you

Jegersmart

There are cases where people have been truly misled, and then there are cases where people do not take responsibility for their own actions.

I don't feel that there is enough information in this case to give an opinion on which it is in this case, however I would highly recommend not signing anything you have not read and understood. If one has health problems that prevent one from understanding and taking responsibility for one's actions then it definitely would be beneficial to stay away from financial decisions!

In this case, is it clearly documented which "trigger events" are relevant and is there documented proof that these events did indeed take place?It would seem rather a coincidence that these have happened shortly before maturity.

Good luck.

J

BillJones

What exactly were the trigger events?

truth57

Jegersmart wrote: »

There are cases where people have been truly misled, and then there are cases where people do not take responsibility for their own actions.

I don't feel that there is enough information in this case to give an opinion on which it is in this case, however I would highly recommend not signing anything you have not read and understood. If one has health problems that prevent one from understanding and taking responsibility for one's actions then it definitely would be beneficial to stay away from financial decisions!

In this case, is it clearly documented which "trigger events" are relevant and is there documented proof that these events did indeed take place?It would seem rather a coincidence that these have happened shortly before maturity.

Good luck.

J

Thank you. Regarding these trigger events, I have to admit that I don't have that in writing, and now that you come to mention it it does sound suspicious. I am awaiting a hard copy of the bank's final offer, but I will also send them an email now asking them to state in writing the cause for the failure of the investment.
I should say that I noted a significant change in attitude between my first conference call with the line manager during which we discussed my complaint, and the subsequent conversation in which she transmitted their final offer. She was quite warm and friendly and seemed genuinely concerned in the initial conversation, extremely cold and hard and matter of fact during the latter conversation. I had the district impression that she had possibly been expecting a different offer from higher up, and perhaps she felt embarrassed at having to add insult to injury to a customer who was very probably going to withdraw every penny from their bank and take their custom elsewhere! That is the treatment I receive after more than 30 years of banking with Lloyds.

truth57

BillJones wrote: »

What exactly were the trigger events?

Apparently there was both a fall and rise in the value of the investment above the threshold for these 'trigger events'. That is all I was told. Apparently the investment had risen in value by over 40% during the final month, which triggered the event so that no interest was now payable. That is my understanding of the situation.

Once I receive a full explanation in writing I will post it here.