Dot ComUnity Credit Union - ISA

Steve3S13

As soon as you can get out with this years interest paid then I would jump by transferring to a new ISA for this year

Steve_xx

Mr_Doubtfire wrote: »

So what should we do now? Personally I want to transfer my ISA to another provider on 5th May (providing the 'voluntary' restrictions have been lifted by then - here's hoping). Should I write to DCU to inform them that I am going to transfer my ISA and tell them that I reject any changes to the T&Cs of my ISA before or after 5th May? I certainly do not want to end up in the situation where my ISA is changed from a Cash ISA to an investment ISA which doesn't have FSCS backing for the capital and interest. Any advice or thoughts would be greatly appreciated.

You could setup a new ISA now with an instruction for the new provider to pull it after 5 May. Write to Dotcom telling them that you intend to transfer it after 5 May and see if they respond. If the new provider is prevented from collecting it they will write and tell you.

Porcupine

Mr_Doubtfire wrote: »

I certainly do not want to end up in the situation where my ISA is changed from a Cash ISA to an investment ISA which doesn't have FSCS backing for the capital and interest. Any advice or thoughts would be greatly appreciated.

I wouldn't panic just yet. It's standard Credit Union procedure not to guarantee an interest rate, but to pay a dividend based on profits over the year. Dividends go up and down. DCU is unusual in advertising a fixed rate, which is possibly what got them into trouble.

Having a dividend rather than a fixed rate isn't in itself a reason to panic -- other credit unions do it without being an investment, and those savings are protected by the FSCS.

It may be that they've just worded it badly (wouldn't be the first time), so I'd wait for that to be clarified - asking the FSCS/PRA might be a good idea.

What is more difficult is them retrospectively applying this to multi-year savers, who may choose to jump ship. However it's a bit awkward because that might put more pressure on DCU's reserves (since they've potentially loaned out that money to other people). So I'd not be hasty, but keep an eye on this one.

masonic

Steve3S13 wrote: »

with a free exit.......what would I get? interest up to the date I moved?
thanks

They would not be able to impose an interest penalty, so yes you should get interest up to the date of the transfer.

hgt

Well until reading today's letter, I was actually considering risking keeping my ISA with DCU - depending on the rate on offer...

... but all they are now offering is a dividend which is not a guaranteed rate, so I am out.

What made me chuckle, is they state that the last dividend (based on performance from over a year ago) was 3%. But obviously since then the performance of DCU has been dire and they are now in a right pickle with a mass exodus on their hands. So the suggestion that they should still be able to offer a 3% dividend sounds pie in the sky to me! Based on the last few months, I'd be amazed if they can offer a dividend at all... in fact I doubt DCU will even exist come May 2016!

It's a shame really as the 3% ISA was good, and I can't find anywhere near that rate elsewhere. But if I'd wanted to risk my return I would have gone for a S&S ISA in the first place.

The proposal from DCU is like buying several thousand pounds worth of shares in DCU, and given the current situation, I can't imagine any sane person doing that!

KGriff

hgt wrote: »

The proposal from DCU is like buying several thousand pounds worth of shares in DCU, and given the current situation, I can't imagine any sane person doing that!

I'm not connected with DCU, nor do I have any savings with them and have just begun to read through this thread out of interest and the way it reads to me (if I am understanding it correctly?) is that this credit union 'unusually' offered a fixed interest rate on their fund raising cash ISA, but due to less than expected returns on that money, are now struggling to meet that commitment and therefore are now seeking a solution by trying to transfer the maturing cash ISA's into shares (A transfer to a stock and shares ISA) in the company.

It also appears those shares are apparently devaluing quite rapidly.

Am I reading this correctly?

If so, this cannot be lawful, surely? or have I totally misunderstood what is happening here?

Steve_xx

KGriff wrote: »

I'm not connected with DCU, nor do I have any savings with them and have just begun to read through this thread out of interest and the way it reads to me (if I am understanding it correctly?) is that this credit union 'unusually' offered a fixed interest rate on their fund raising cash ISA, but due to less than expected returns on that money, are now struggling to meet that commitment and therefore are now seeking a solution by trying to transfer the maturing cash ISA's into shares (A transfer to a stock and shares ISA) in the company.

It also appears those shares are apparently devaluing quite rapidly.

Am I reading this correctly?

If so, this cannot be lawful, surely? or have I totally misunderstood what is happening here?

No not really. There's a lot of opinion and speculation on here about this outfit. The credit union offered this ISA and it was good as it paid 3%. Aside from that, the credit union over the past year has, according to it, placed itself into a "voluntary" state due to the fact that it does not meet some criteria set by the PRA, ie it has inadequate reserves or perhaps too much leverage. This seems to have had the effect of putting the ISA's into a moribund state, ie the credit union cannot allow savers to move there existing frunds even if they, the credit union wanted to allow that.

veryintrigued

Wow Ive just read through all the pages on this thread. Quite an interesting read how sentiment towards this organisation changed and then changed again.

Understandly quite emotive in places. Even with the deposit guarantee there have clearly have been some real concerns over peoples money.

Hope it works out for you guys

KGriff

veryintrigued wrote: »

Wow Ive just read through all the pages on this thread. Quite an interesting read how sentiment towards this organisation changed and then changed again.

Understandly quite emotive in places. Even with the deposit guarantee there have clearly have been some real concerns over peoples money.

Hope it works out for you guys

Yes I completely echo that, thank goodness for the FSCS scheme. Fingers x-d for those affected by this. Hopefully it will resolve itself in the coming weeks.

Archi_Bald

I have now been told in writing:

ISA transfers or withdrawals cannot be completed until the voluntary imposed restrictions are lifted.

The credit union will update all members once an update has been received.

The knives are out.