Dot ComUnity Credit Union - ISA

masonic

My post explaining what questions long-suffering investors should be asking about the proposed changes has been deleted too.

Shame on DotCon/EBCU for trying to censor perfectly reasonable discussion and shame on MSE for caving in.

colsten

WOW. Censorship. That is shocking.

If you are genuine and want to post anything that won't get deleted, PM me or MARTYM8 for access to our private Google group.

colsten

veryintrigued wrote: »

From a MSE perspective has anyone been in touch with them to see if they are able to make this thread still unlocked but such that posts older than a certain date cannot be edited / removed? And also highlight to Martin such that he can use any influence in your favour (and ensure this thread remains)?.

Seeing that people's posts are being removed in a rather clandestine manner, you might be overly optimistic about MSE's concerns for their users, many of whom have tens of thousands of pounds illegally withheld from them.

It never even occurred to me that MSE would do this when I set up the private group but I am glad I did now. I also never expected any help from MSE in the matter, and definitely do not now.

masonic

At the risk of getting into trouble, I'm going to replace my post that was removed with the following sanitised version, because I believe that even those people who don't join the private group have the right to an open discussion here about the products that this company might be trying to foist upon them, at least with as much information and commentary as it is possible to include.

So, to paraphrase the points I made yesterday, hopefully in a manner that will not lead to further censorship...

IF, HYPOTHETICALLY, long-suffering investors were to receive a maturity letter from DotCon, proposing that their cash ISAs roll over into a different sort of ISA account, in which they will be invested in shares that pay a dividend rather than a cash account that pays interest, these are the types of questions they might want to ask:

Are these shares the same deferred shares that members must hold in their Basic Share Account? If so, it is important to note that DotCon state on their website that Deferred Shares are not protected by the FSCS. DotCon might try to make representations that the maturity ISA being offered is protected by the FSCS. If they were to do so, investors must ask themselves why they would be protected in the ISA but not in the Basic Share Account.

Any FSCS protection around shares is likely to be the same protection that is offered for investments. This cover does not include protection against loss of investment capital. So, this protection may in fact be quite worthless should the shares be devalued or diluted, such as might happen if the credit union got into financial difficulties and needed to raise capital, for example.

Finally, if cash ISA savers were to be offered a maturity account that held shares that pay a dividend, those savers who were basic rate taxpayers would gain no benefit from investing through the ISA wrapper, since dividends are paid with no income tax liability unless you are a higher rate taxpayer. Therefore, in the extremely unlikely event that anyone would want to invest in more shares in ECBU, then it would probably be more tax efficient for them to do so in their Basic Share Account and move their ISA elsewhere.

masonic

colsten wrote: »

It never even occurred to me that MSE would do this when I set up the private group but I am glad I did now. I also never expected any help from MSE in the matter, and definitely do not now.

So much for "Cutting your costs. Fighting your corner!"

Ed-1

masonic wrote: »

Are these shares the same deferred shares that members must hold in their Basic Share Account? If so, it is important to note that DotCon state on their website that Deferred Shares are not protected by the FSCS. DotCon might try to make representations that the maturity ISA being offered is protected by the FSCS. If they were to do so, investors must ask themselves why they would be protected in the ISA but not in the Basic Share Account.

Does the maturity letter say that the ISA funds would be converted into non-deferred shares? That surely must be the case. Read the difference between deferred (i.e. those shares held in a Basic Share account) shares and non-deferred shares here:

http://ebcu.co.uk/our-shares.html

Non-deferred shares hold full £85k FSCS protection.

jimjames

colsten wrote: »

WOW. Censorship. That is shocking.

If you are genuine and want to post anything that won't get deleted, PM me or MARTYM8 for access to our private Google group.

If you want to have anything hosted publicly so others can see, I'm happy to put info on my blog site.

Unbelievable that posts are being deleted for something so serious that mse should be supporting savers over.

masonic

Ed-1 wrote: »

Does the maturity letter say that the ISA funds would be converted into non-deferred shares? That surely must be the case. Read the difference between deferred (i.e. those shares held in a Basic Share account) shares and non-deferred shares here:

http://ebcu.co.uk/our-shares.html

Non-deferred shares hold full £85k FSCS protection.

The letter I saw did not state that, but it could be the case. However, the letter drew direct comparisons between these shares and the deferred shares held by members in their share accounts, so it is unclear. It is also unclear, even if the putative shares are non-deferred shares, under exactly what circumstances and to what degree FSCS protection would apply. Are there any circumstances in which investors may have to sell their shares for less than they purchased them, for example?

Archi_Bald

In keeping with their usual shoddy communication, the letter doesn't state anything about deferred and non-deferred shares. They are referring to something they call "Credit Union Membership Shares" - a term that isn't defined anywhere.

Nednats

Archi_Bald wrote: »

In keeping with their usual shoddy communication, the letter doesn't state anything about deferred and non-deferred shares. They are referring to something they call "Credit Union Membership Shares" - a term that isn't defined anywhere.

The letter referred to a "dividend"