Dot ComUnity Credit Union - ISA

Steve3S13

I'm in for a 5 year ISa and would have happily waited but not after the way they have treated us.
I'd rather loose a year interest than worry for the next 4 years.
Anyway we might not have to worry if the FSA are called in to pay us out

colsten

Steve3S13 wrote: »

Anyway we might not have to worry if the FSA are called in to pay us out

It would be the FSCS, not the FSA, that would pay out.

Steve_xx

Steve3S13 wrote: »

I'm in for a 5 year ISa and would have happily waited but not after the way they have treated us.
I'd rather loose a year interest than worry for the next 4 years.
Anyway we might not have to worry if the FSA are called in to pay us out

But the problem here is that this outfit is still deemed to be functional to some degree or other, and so as someone earlier has posted, they are prevented from releasing your money to you. That situation may not change at anytime soon and so it would seem that your cash is effectively moribund.

colsten

I had the brochure, too, and no letter. The cheek - they are expecting more money from us, and it wouldn't even be FSCS protected! What are they smoking?

It also seems that if you die during the 5 year bond period, your beneficiaries might get "up to £15,000" from the Life cover all members have, but your loan itself would pass to DCU "so that the benefit of the Subordinated Loan stays within the Credit Union". That's one way to make money, just help yourself to a bit of the state of a deceased person.

All in all, it's very easy to resist their blatant attempt to relieve me of more money.

colsten

Steve_xx wrote: »

But the problem here is that this outfit is still deemed to be functional to some degree or other, and so as someone earlier has posted, they are prevented from releasing your money to you. That situation may not change at anytime soon and so it would seem that your cash is effectively moribund.

I find it hard to believe that the FSCS should be able to absolve themselves just because the company hasn't gone bust. It would make a complete mockery of the FSCS if a company can impose 'voluntary' restrictions on themselves but continue to operate (e.g. by issuing subordinated loans) regardless. The FSCS website says:

Rule 6.3.2 "... the FSCS... may determine a relevant person to be in default when it is, in the opinion of the FSCS... unable to satisfy protected claims against it or likely to be unable to satisfy protected claims against it."

It is obvious to everybody that DCU is unable to satisfy protected claims against it - - if the FSCS disagrees, this seems to be a case for George Osborne.

masonic

colsten wrote: »

It would be the FSCS, not the FSA, that would pay out.

Yes, the Food Standards Agency might consider these guys to be pathogenic, but it isn't their jurisdiction.

codetown

My feeling is that if the problem is only with their reserves, it can be solved over time (their loans will start getting back and I am sure they get paid back decent rates).
We need patience.

Their attempt to raise money via unprotected bonds is not a problem, as long as those people investing (not me for sure) understand the risks.
It might solve their temporary cashflow problems, but of course they need a stricter cash control for the future.

The real difficulty is planning/managing the likely outflow of money against their loan repayments. I guess most of their inflow in 2014 was for the 1 year ISA bond, so they will need a lot of cash available to repay that and in a short time (April -July 2015).
If they have lent for short periods (12 months) then they should have no trouble getting back their money.
If they did not care to plan the in-outflow and lent for longer periods, then they will have troubles repaying now.

A way forward might be to offer a (voluntary) increased rate of say 4% for another year of ISA holding with them.
If the authorities allow this extension at a higher rate, it might help their position, in parallel to the bonds they will be able to sell.

After all, the business they are in (loans) is lucrative even if they offer lower 'community' rates, so any decently operated company/union can resolve a cashflow problem if they work hard to match repayments with withdrawals.
But of course the first step is to have an open and honest communication and they still need to start with that!

FOREVER21

codetown wrote: »

My feeling is that if the problem is only with their reserves, it can be solved over time (their loans will start getting back and I am sure they get paid back decent rates).
We need patience.

Their attempt to raise money via unprotected bonds is not a problem, as long as those people investing (not me for sure) understand the risks.
It might solve their temporary cashflow problems, but of course they need a stricter cash control for the future.

The real difficulty is planning/managing the likely outflow of money against their loan repayments. I guess most of their inflow in 2014 was for the 1 year ISA bond, so they will need a lot of cash available to repay that and in a short time (April -July 2015).
If they have lent for short periods (12 months) then they should have no trouble getting back their money.
If they did not care to plan the in-outflow and lent for longer periods, then they will have troubles repaying now.

A way forward might be to offer a (voluntary) increased rate of say 4% for another year of ISA holding with them.
If the authorities allow this extension at a higher rate, it might help their position, in parallel to the bonds they will be able to sell.

After all, the business they are in (loans) is lucrative even if they offer lower 'community' rates, so any decently operated company/union can resolve a cashflow problem if they work hard to match repayments with withdrawals.
But of course the first step is to have an open and honest communication and they still need to start with that!

I think your suggestions were good until the penultimate paragraph. I for one would not tie my Isa up with them for another year even if they offered me10%
The way they have behaved and their lack of communication has lost them all credibility
The sooner I can withdraw my money even with partial loss of interest is the route I intend to take.

christh

In my dealings with this company I've felt at times things were slightly disorganised, but I've always had direct contact with someone there. I can't comment on their response to the recent troubles as I have yet to get in touch about them.

In my case I'd be happy for another year of 3% without a doubt. That's based on my experience of IceSave going under and the process of reclaiming my cash. As I recall the process which was surprisingly quick and easy - didn't have to do a thing. All was paid into my nominated bank account, including interest.

Remember that accrued interest is also part of the settlement with FSCS covered Credit Unions:
http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-deposits/#Will_you_compensate_me_for_any_interest_I_have_earned_on_my_account_

I can well understand people that need access to the money being very annoyed - but I'll happily enjoy a continued 3% interest while DotCU figure out what they're doing.

codetown

FOREVER21 wrote: »

I think your suggestions were good until the penultimate paragraph. I for one would not tie my Isa up with them for another year even if they offered me10%
The way they have behaved and their lack of communication has lost them all credibility
The sooner I can withdraw my money even with partial loss of interest is the route I intend to take.

Communications is the key to improve here.
But different customers have different needs for the real money and dotcommunity should use this to help the situation.

For example for me the ISA is a long term investment and I am not concerned with having an immediate release of my funds, as long as my investment is well rewarded and within the FSCS protection.

I have passed through the Icesave failure and I know how efficient the FSCS was back then (and they paid to the penny including the full high interests), so I personally am not too worried at this stage of their temporary cashflow/reserves problems.