Dot ComUnity Credit Union - ISA

masonic

Nednats wrote: »

The letter referred to a "dividend"

It did, but that doesn't really narrow it down. The current deferred shares are dividend bearing and non-deferred shares can be either interest or dividend bearing. The fact that they are paying a dividend rather than interest on these shares suggests that they are linked to profits from the business, rather than interest from their lending activities.

codetown

masonic wrote: »

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.

This is a VERY SERIOUS issue.
I don't have the time to read the forum every day and of course would have welcome your message (now disappeared).

I cannot understand how MSE people can allow anyone deleting useful messages. I will contact them to have this situation solved once and for all!

gwapenut

The reiteration of fscs protection remaining would imply they are non deferred shares. As someone has said though, fscs protection can take several forms and may not guard against loss of capital value. But i think they said it remains a cash isa?

Archi_Bald

masonic wrote: »

The fact that they are paying a dividend rather than interest on these shares suggests that they are linked to profits from the business, rather than interest from their lending activities.

They do state "Dividend bearing share deposits depend upon the performance of DotComUnity over each annual period".

I think they mean that it's the dividend that depends on the performance - just the usual sloppy wording that they so like to use.

So yes, the dividends could be zero

Archi_Bald

gwapenut wrote: »

The reiteration of fscs protection remaining would imply they are non deferred shares. As someone has said though, fscs protection can take several forms and may not guard against loss of capital value. But i think they said it remains a cash isa?

Yes they say The NISA will remain a "Cash" ISA (quoted verbatim).

The reassurance about the FSCS is not worth the paper it's written on as long as they aren't declared in default. So, with the help of the FCA/PRA they could remain a zombie company forever and illegally hold our money forever....but thankfully we have a number of options to prevent this from happening.

codetown

masonic wrote: »

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.

I wish to add to the above:
a) long-standing customers have signed up a given and unchangeable T&C. This T&C cannot be changed without the explicit consent of the customer. If the long-standing customer signed up to an ISA product and wishes to maintain this status and NOT have any shares, NOBODY can change his will or change the T&C without his consent. If dotcom were to try anything like that, the long-standing customer should IMMEDIATELY put out a formal complaint and write to the FCA to signal the illegal behaviour.

b) When the period of investment expires, NOBODY can force the investor to reinvest with the same company.
ISA can be easily transferred at no cost to another provider without any obstacle.
The customer should ask and pretend that DotComUnity does the transfer immediately as requested.
If the instruction is not executed, then report it to the FCA immediately

Archi_Bald

The more I read this letter the angrier I get.

They say that “These changes will not affect your ability to transfer your NISA 2015 product out to another ISA provider”.

Do they really think anyone believes this now?

codetown

Archi_Bald wrote: »

The more I read this letter the angrier I get.

They say that “These changes will not affect your ability to transfer your NISA 2015 product out to another ISA provider”.

Do they really think anyone believes this now?

I haven't yet received this letter you all talk about.
Has anyone scanned it or copied the main parts to be able to read the content?

darren72

codetown wrote: »

I haven't yet received this letter you all talk about.
Has anyone scanned it or copied the main parts to be able to read the content?

Somebody did do, but that post and many other posts have been quietly removed without explanation - and not by the original posters!

Archi_Bald

codetown wrote: »

I haven't yet received this letter you all talk about.
Has anyone scanned it or copied the main parts to be able to read the content?

It is in the private Google Group which you can request access to if you PM colsten or MARTYM8 with a gmail address

If you have a 1 year ISA and not yet received the maturity letter, they are in breach of contract and you should complain to them