Misselling of bonds

Clint163

It's to do with the misselling part that there are grounds for complaint. The same thing applied with the selling of endowments and ppi. Investments were sold on the same basis, hard sales and misleading information. Not giving the customer a clear understanding of the product. Remember these all attracted good commission for the sales person. he obviously did not apply his cob rules when selling this bond to my husband.

dunstonh

The same thing applied with the selling of endowments and ppi.

Neither of which have anything to do with investing. And PPi sales were non-advised using unqualified bank staff.

Investments were sold on the same basis, hard sales and misleading information.

Prove it.

Clint163

jimjames wrote: »

So he was told there was a penalty for withdrawing money before 5 years yet he did so after 4 years and got less back as a result.

How does he have grounds for a complaint?[/QUOTE

Most products come with a penalty Clause. It's how the item was sold to them, for instance lumps sum money in bank and then banks pestering for a sale. The way they explained the product ie, was it clear fair and not misleading. Well yes it was misleading. No suggestion that the investment would generate a loss. He rep was aware that my husband planned on using the money to buy property. There job was to suggest a product that was suitable not based on what product generates the highest commission.

Clint163

dunstonh wrote: »

Neither of which have anything to do with investing. And PPi sales were non-advised using unqualified bank staff.



Prove it.

Maybe if you actually went into fos and looked at case studies you will see that lloyds was fined 1.9 million in 2003 for misselling of bonds. Again in 2013 they were fined again for selling bonds and other investments. To be honest if it wasn't for claims companies we probably would never know.

Atreyu107

*grabs popcorn*...

teddysmum

I misunderstood and assumed the bond was an investment in stocks and shares, where there is a risk of loss, but in fact the bond was closed early, triggering a penalty which was more than the interest earned(or perhaps interest wasn't earned as it was due on maturity date, which was not reached.)


Early withdrawal penalties are very common, so perhaps,as it's easy to do when faced with lots of facts,your husband switched off when the penalty was mentioned. I've always been aware of possible penalties for early closure of both savings and services (such as Sky tv or fixed tariff power).


I believe sellers are obliged to go through the t&cs with you, before you agree to the having read them and to the sale,boring as the process may be.


The penalty is clearly mentioned on the Lloyds website :


You will, however, pay a penalty if you need to make a withdrawal within the fixed term.

Clint163

dunstonh wrote: »

It is possible that a complaint on that basis would have success if made within a few months of the original sale. However, time dilutes a complaint on that basis as it becomes clear that the "pestering" was not enough to complain about. The 3 year/6 year rule could be applied to that.


irrelevant. The early cash in created a charge (probably around 2%-4% as they were not exit charge free until after year 5). Plus, investment returns always involve periods of loss. The FCA do not allow complaints about investment returns.



Who says a savings account would generate more? The investment took place at the tail end of a negative period and the 6 years that followed were very strong years of growth. By drawing the money out earlier than 5 years, a good proportion of the loss would be self generated due to charge and had it been left in, as intended, it would likely have made far more than a savings account.



Really - when? Have you a link?

Lloyds were fined for the sale of precipice bonds on sales made between oct 2000 and July 2001. Your husband was not sold a precipice bond. He was sold an onshore investment bond.



Does not prove a thing. Different product, different timescale and a salesforce of around 3000-4000 staff. So, many different scenarios. Each case is look at on its own merits.



What evidence do you have to support that allegation?



That is not actually true. The usual risk warnings appear on the illustration.
These figures are only examples and are not guaranteed - they are not
minimum or maximum amounts. What you will get back depends on how
your investment grows and on the tax treatment of the investment.

You could get back more or less than this.

All insurance companies use the same rates of growth for illustrations
but their charges vary.

Do not forget that inflation would reduce what you could buy in the
future with the amounts shown.

You also confirm that he was aware of the charges if drawn before the end of year 5. Yet he still did that.





Nor are most investors.



The investment bond caters for low risk through to high risk investors.


Basically, most of what you are saying is easily countered by Lloyds or could be timebarred. You have gone on a google search and found unrelated things and put 2 and 2 together to come up with 5. You have made a load of assumptions and are, of to be expected, suffering from memory loss.

However, all that said, there is a potential mis-sale here and it is one that you have no mentioned, despite all the other irrelevant points you raised. Tax efficiency. An investment bond appears in the tax efficiency list after ISA. So, the sale should have been a stocks & shares ISA and unit trust (for the amount that could not be put in an ISA).

Possibly it is time barred. However I have reason to believe that each case differs in relation to this. If it was missold then there is time for complaint on the misselling rather than the investment. Don't understand what you mean as it should have been a stock and shares is a and unit trusts? Are you saying that would have been more suitable at the time for my husband to invest in?

Clint163

teddysmum wrote: »

I misunderstood and assumed the bond was an investment in stocks and shares, where there is a risk of loss, but in fact the bond was closed early, triggering a penalty which was more than the interest earned(or perhaps interest wasn't earned as it was due on maturity date, which was not reached.)


Early withdrawal penalties are very common, so perhaps,as it's easy to do when faced with lots of facts,your husband switched off when the penalty was mentioned. I've always been aware of possible penalties for early closure of both savings and services (such as Sky tv or fixed tariff power).


I believe sellers are obliged to go through the t&cs with you, before you agree,boring as the process may be.

Penalty was mentioned but not the MVR. He does not switch off. It's the misselling part not the investment. This product was not suitable for my husband and was not clearly explained to him. He was 29yr old who's plans were to buy a house. These bonds were generated also for to take a income, that suggest more suitable to the older generation. The bond was a with profits bond. Now our understanding with a with profits product once the bonus has been applied each year it cannot be removed. So this was how it was sold to him.

Clint163

I appreciate all comment regarding this. In 2002 and even now we are quite ignorant to the sales of products by banks. I would go on and say that we are now more aware of the misselling of products and the right to complain. When my husband cashed his bond he had a meeting with the rep. When he spoke about the bond performance the rep laughed and said 'oh you mean the bond without profits. If he had explained that we could complain about the performance or selling then my husband would have. As I said before if it wasn't for claims companies who are also pestering with calls enlightening us of the right to complain we would never know. I can now understand why so many of these companies continue to increase.

DrSyn

So you nagged him into going to the bank.


Questions

1.Why did he not just phone or write to the bank and tell them to stop pestering him?

2. Why when he went to the bank, did he not just say "no thank you" and walk out.

3. Why did you not go with him to the bank, if he's weak willed?

4.Why did he not come back with the info and discuss it with you?

5. Why if there was a penalty for cashing it in within 5 years, did he cash it in after only 4 years?

6. Was all your concern by any chance triggered by a claims company calling you?