iWeb Share Dealing - watch out for potentially Enormous Money Grab change to their t's and c's!

[Deleted User]

Hi all,

I have an iweb account and have just noticed an email from them (sent on 15 November) casually mentioning that from the start of next year where iWeb owe me money less than £5 as a result of "any transaction", iWeb "will keep the [money] to set against ... operating costs".

What the bejeebies?? So they're just going to start helping themselves to the money & shares that belong to me just because it's less than £5 each time? Obviously they have the right to change their t's and c's but I have been transferring money into iweb over the past half year to take advantage of their cheap rates, including paying the application fee and a number of trading charges, and there was no mention of this small-scale thievery when I opened the account. 

I'm not sure what the real world effect of this change will be for me, but presumably if they're snaffling dividends and parts of trades under £5 on a regular basis it could add up to a cumulative shed load of dosh for them!

I have complained to them about this and intend to escalate it to the Ombudsman once I get their "final decision" letter telling me to go away. Might not achieve anything, but it also might. Anyone want to join me and also submit a complaint about this? Or am I being unreasonable?

jimjames

While there is a change to the iweb T&Cs I'm not sure it's how you have described it. It looks to be specifically related to corporate actions so rights issues etc.

If, after acting for you and our other clients for any transaction, we are left with fractions of investments or cash, we will add these together, sell them (in the case of investments) and where the value of your total fractional entitlement is less than £5, we will keep the proceeds to set against our operating costs.

eskbanker

The term you refer to relates only to corporate actions specifically, not routine share or fund transactions:

Section 12 - Corporate Actions

If, after acting for you and our other clients for any transaction, we are left with fractions of investments or cash, we will add these together, sell them (in the case of investments) and where the value of your total fractional entitlement is less than £5, we will keep the proceeds to set against our operating costs.

and is just a minor change to the existing clause 12.9 at https://www.iweb-sharedealing.co.uk/assets/terms-and-conditions.pdf

Thrugelmir

 Seems a reasonable term and condition given the disportionate cost of allocating the proceeds out. Not as if fractions arise that often. Normally as a result of rights issues. Which wouldn't impact the majorirty of retail investors who hold collective investments. 

[Deleted User]

Thanks! Maybe I overreacted slightly because the email says "any transaction" whereas I can see from the full terms linked that it does indeed apply only to corporate actions, but previously the t's and c's said "where impractical to give you the money" they would keep it whereas now they have said "if its less than £5". I would have thought impractical was more like 10p or less? 

Thrugelmir

If you are entitled to less than £5 then in all likelihood the shareholding is going to extremely small in value in any event. 

GeoffTF

Thrugelmir said:

If you are entitled to less than £5 then in all likelihood the shareholding is going to extremely small in value in any event. 

No, the rule relates to fractional entitlements. The terms of a corporate action might entitle you to 10,364.43 shares. You should get 10,364 shares, but iWeb will pocket the proceeds of selling the 0.43 shares. (They cannot sell fractions of a share, but if the have ten holdings like that in their pool, they can sell 4 shares, and pocket the proceeds, if it is worth their while.)

Thrugelmir

GeoffTF said:

Thrugelmir said:

If you are entitled to less than £5 then in all likelihood the shareholding is going to extremely small in value in any event. 

No, the rule relates to fractional entitlements. The terms of a corporate action might entitle you to 10,364.43 shares. You should get 10,364 shares, but iWeb will pocket the proceeds of selling the 0.43 shares. (They cannot sell fractions of a share, but if the have ten holdings like that in their pool, they can sell 4 shares, and pocket the proceeds, if it is worth their while.)

Only pocket that 0.43 if it's less £5 though.