Dot ComUnity Credit Union - ISA

masonic

Steve_xx wrote: »

Ah right, I see what you mean. Nobody with good sense would surely choose to invest with them without the assurance of the FSCS protection. Though it may be that some who do choose to invest will not be aware of their currect restricted status.

It's worth bearing in mind that the "voluntary" restrictions prevent them from accepting any savings deposits as well as preventing them from repaying deposited savings, so presumably the only money they can now accept is in exchange for shares or corporate debt.

As an outsider, I can't comment on the way these risk-based products are being marketed to union members, but I do wonder what proportion of the union's members could be described as sophisticated investors for whom these products would be suitable. Clearly they are operating in a grey area, but I'm not sure whether they've crossed the line into misselling or fraud.

Steve_xx

masonic wrote: »

It's worth bearing in mind that the "voluntary" restrictions prevent them from accepting any savings deposits as well as preventing them from repaying deposited savings, so presumably the only money they can now accept is in exchange for shares or corporate debt.

As an outsider, I can't comment on the way these risk-based products are being marketed to union members, but I do wonder what proportion of the union's members could be described as sophisticated investors for whom these products would be suitable. Clearly they are operating in a grey area, but I'm not sure whether they've crossed the line into misselling or fraud.

It all looks pretty worrying to me. I looked at this initially when the ISA first came on the scene. I kept looking and I decided to go with it, but something somehow made me feel uncomfortable with it. and I stalled at the very last minute.

masonic

Steve_xx wrote: »

It all looks pretty worrying to me. I looked at this initially when the ISA first came on the scene. I kept looking and I decided to go with it, but something somehow made me feel uncomfortable with it. and I stalled at the very last minute.

Fortunately for those with the ISA, this account is FSCS protected and it seems increasingly likely that the FSCS protection will be used.

Interestingly, I was having a poke around the site looking for details of this assumed mini-bond. I didn't find what I was looking for, but did find a statement in the T&Cs of the basic share account stating that "The Basic Share Account represents a Deferred Share within the Credit Union".

I don't know if this has been covered before, but a deferred share is last in line for repayment when a company goes bankrupt. No wonder they have been trying to encourage members to add funds to this account. In effect, this money would be used preferentially to pay off the directors and other shareholders in the company if it goes bankrupt. Normal Credit Union members would then have to fight over whatever money is left, if any.

Forti

MARTYM8` wrote: »

No - I didn't get any brochure just a letter.

PS You may wish to check your PMs.

Could you also send to me? No mail this morning from them.

Archi_Bald

Steve_xx wrote: »

Ah right, I see what you mean. Nobody with good sense would surely choose to invest with them without the assurance of the FSCS protection. Though it may be that some who do choose to invest will not be aware of their currect restricted status.

I agree, non-FSCS protected investments with them are utter madness. I also agree that they will probably lure some unsuspecting people in - 5% interest will no doubt grab the interest of some desperate savers who think a bond with a Credit Union will be a safe place. Well, all of us on this thread know this is not the case.

Most of them also probably won't understand the difference between a bond and a bond, and the talk in the brochure about sub-ordinated loan will go straight over some people's heads. To be fair, the brochure does say you could lose your entire investment.

pafpcg wrote: »

I'd be happy to cough up a few hundred pounds to support the credit union (as a current investor I have a vested interest in seeing it prosper), but with a minimum set at £5,000 I'm not convinced I can afford to risk that much.

:eek:

hgt

I got the glossy brochure this morning, but no letter with it. What are this shower playing at!

Then again I can guess what the letter says... you don't need a weatherman to tell you it's raining do you!

Archi_Bald

masonic wrote: »

I don't know if this has been covered before, but a deferred share is last in line for repayment when a company goes bankrupt. No wonder they have been trying to encourage members to add funds to this account. In effect, this money would be used preferentially to pay off the directors and other shareholders in the company if it goes bankrupt. Normal Credit Union members would then have to fight over whatever money is left, if any.

This sort of behaviour has turned me right off them. It is something I would expect from a sleezy outfit run by conmen, but not of a credit union.

trenchwars

This is an email I received from the Bank of England regarding this firm:

Thank you for your email of 17 January concerning Enterprise The Business Credit Union Limited. This firm signed a Voluntary Imposition of Requirements on 24/12/2014.

With the exception of operating managed accounts, Enterprise The Business Credit Union Limited t/a DotComUnity Credit Union Limited is currently not able to accept deposits, grant new loans or repay any deposits. Further information about Voluntary Imposition of Requirements can be found here: http://www.bankofengland.co.uk/pra/Pages/authorisations/waivers/applyingcrr.aspx.

Regrettably, we are unable to advise you as to when you will be able to withdraw your money from this institution. I would suggest that you await further instructions from them or contact the firm direct to assist with your query.

Thank you once again for taking the time and trouble to contact the Bank of England. I am sorry we could not be of direct assistance on this occasion.

And an email from the FSCS:

Thank you for your recent correspondence of 17 January 2015 about a potential claim for compensation regarding Enterprise the Business Credit Union.

The Financial Services Compensation Scheme (FSCS) is the UK’s compensation fund of last resort for customers of authorised financial services firms. We may pay compensation if a firm is unable, or likely to be unable, to pay claims against it. We must consider all claims in line with our rules as set by the Financial Conduct Authority (FCA).

As Enterprise the Business Credit Union is currently a “live” firm and still trading, your query does not fall under our remit, and you should refer your enquiry to the firm. If they do not resolve the issue, you can contact the Financial Ombudsman Service (FOS) about this matter. The FOS was set up to investigate complaints against “live” financial firms.

Forti

I've just spoken with the Financial Ombudsman Service on 0300 123 9 123 (sorry I said I would do it last week).

They can file a complaint on our behalf and if the complaint isn't satisfactorily resolved the credit union will then face a £500 cost to the Ombudsman Service. Essentially it adds additional pressure rather than us filing complaints directly.

I'm going to speak with DotComUnity on Monday to give them a final opportunity over this matter. If I am not satisfied I will then get the Ombudsman to issue a formal complaint. I suggest others do the same.

Timelines are slow, but I have no confidence 8 weeks down the line we're going to be in any different position to today.

MARTYM8`

hgt wrote: »

I got the glossy brochure this morning, but no letter with it. What are this shower playing at!

Then again I can guess what the letter says... you don't need a weatherman to tell you it's raining do you!

Yes - some have the letter (like me) and no brochure and others have the brochure but no letter. So either there has been a massive mess up with the mailout or they are wasting postage -as they should surely have combined the two to save money.

The weather comment is quite pertinent - at the moment it is pouring with rain but evidently a hurricane is on its way but it may take a while. Of course in DCU world bad weather is voluntary and is imposed on you working in partnership with Mother Nature/God.:D