Premium Bond syndicate problems

eskbanker

Sea_Shell said:

MX5huggy said:

Of course you benefit from pooling (if the pool is run fairly). You have a better chance of winning a prize in any draw and a better chance of winning a bigger prize. 

Does that work though, statistically, if you then have to also split the winnings?

No, it doesn't!  Since every bond has an equal chance of a prize, the expected winnings from £40 per month will be exactly the same as two-thirds of the expected winnings from £60 per month, over the long term....

TELLIT01

eskbanker said:

Sea_Shell said:

MX5huggy said:

Of course you benefit from pooling (if the pool is run fairly). You have a better chance of winning a prize in any draw and a better chance of winning a bigger prize. 

Does that work though, statistically, if you then have to also split the winnings?

No, it doesn't!  Since every bond has an equal chance of a prize, the expected winnings from £40 per month will be exactly the same as two-thirds of the expected winnings from £60 per month, over the long term....

Both arguments are correct.  Having more bonds (entries) in a draw does increase the likelihood of winning.  What it doesn't do, as the winnings are shared, is increase the amount each individual is likely to win.

Syndicates are potentially problematic, even when the rules are supposedly agreed by all and are in writing.  In the early days of the National Lottery a group of us in the office formed a syndicate and had a number of small wins.  The winnings amounted to about £20 each and the rules stated that payout would only be made once winnings amounted to £50 per person, or to an individual if they left the syndicate.  A number of us came back from lunch one day to be told that there was no money left in the 'pot' because the treasurer had decided it would be a good idea to 'invest' in scratch cards and they had all been losing cards.  There had been no discussion on the idea.  They did have the cards there apparently proving this to be the case, although they had been alone when purchasing them and could easily have pocketed any winnings and purchased additional tickets to cover up.  Needless to say, that was the end of the syndicate and the start of very frosty relationships with that person.

MX5huggy

eskbanker said:

Sea_Shell said:

MX5huggy said:

Of course you benefit from pooling (if the pool is run fairly). You have a better chance of winning a prize in any draw and a better chance of winning a bigger prize. 

Does that work though, statistically, if you then have to also split the winnings?

No, it doesn't!  Since every bond has an equal chance of a prize, the expected winnings from £40 per month will be exactly the same as two-thirds of the expected winnings from £60 per month, over the long term....

The expected winnings are the same but likely to be closer to average the more you hold, but the chance of a big win is improved. But you’ll only receive your share of the big win. 

eskbanker

MX5huggy said:

eskbanker said:

Sea_Shell said:

MX5huggy said:

Of course you benefit from pooling (if the pool is run fairly). You have a better chance of winning a prize in any draw and a better chance of winning a bigger prize. 

Does that work though, statistically, if you then have to also split the winnings?

No, it doesn't!  Since every bond has an equal chance of a prize, the expected winnings from £40 per month will be exactly the same as two-thirds of the expected winnings from £60 per month, over the long term....

The expected winnings are the same but likely to be closer to average the more you hold, but the chance of a big win is improved. But you’ll only receive your share of the big win. 

Well, yes, pooling from £40 to £60 increases the chance of winning a £25 prize by a factor of 3/2, but the corresponding 2/3 reduction in the return effectively cancels this out, and it's exactly the same for winning £50, £100, etc, right up to £1m, so portraying 'better chances' as a benefit of pooling is misleading, but it is true that this is essentially the belief that underpins all syndicates!

gwapenut

I think you should ask for sight of the prize winnings history too. For all you know, given how much trouble you are experiencing when cashing in your bonds, the syndicate has won more than you have been told. 

Given the stalling though, my suspicion is that the bonds have been cashed in a long time ago and thus there are no winnings to worry about.

brewthebear

Did the same but as there were four of us each time a bond was purchased it was taken in turns so no argument who it belonged to.
too still have the same arrangement 20 odds years on share any winning and if we decide to stop we each know our bonds are in our own name.
 YES a bit late for you but if in future you decided to do it this is the simplest solution. 

Apodemus

I'm genuinely sorry to hear about the position you are in and I'm sure there are many others like you out there, but...

I'm not sure you have much of a leg to stand on and highly doubt if you have any recourse to the law.  The information on Premium Bonds makes it clear that these cannot be held jointly or in Trust, only by individuals - with the exception of parrents/guardians holding on behalf of children under 16.  The more general conditions of all NS&I investments make it clear that certain background information is required before anyone can sign up and this specifically would include information on any funds held by one individual on behalf of another.  Beyond this, I would have thought that the wider rules around money laundering would come into force.

I hope that you find a way to get your money back, but please be realistic that you are trying to enforce an unwritten contract, which was designed to do something that was not permitted in the first place.

Rollinghome

It's said: "Never borrow and never lend, If you want to keep a friend".

The same might apply to syndicates too, unfortunately.  People can do odd things where money is involved.

Section62

Apodemus said:

I'm not sure you have much of a leg to stand on and highly doubt if you have any recourse to the law.  The information on Premium Bonds makes it clear that these cannot be held jointly or in Trust, only by individuals - with the exception of parrents/guardians holding on behalf of children under 16.  The more general conditions of all NS&I investments make it clear that certain background information is required before anyone can sign up and this specifically would include information on any funds held by one individual on behalf of another.  Beyond this, I would have thought that the wider rules around money laundering would come into force.

I hope that you find a way to get your money back, but please be realistic that you are trying to enforce an unwritten contract, which was designed to do something that was not permitted in the first place.

I don't see any of that necessarily being a barrier to the OP's claim against the ex-colleague.

It would be if they were trying to get their money back from NS&I, but (albeit against the rules NS&I apply to their accounts) the way in which the ex-colleague has 'invested' the money doesn't alter the nature of the agreement between the OP and the ex-colleague.

I suppose NS&I could have some grounds to close the holding account, or perhaps to refuse to pay out on prizes, on the grounds the account was funded other than in accordance with the T&C's, but that shouldn't impact on the OP's right to ask the ex-colleague to repay the money they put in.

The ex-colleague is the one who operated the PB account contrary to the T&Cs, possibly making false declarations regarding the source of funds.  If anyone, it is them on a sticky wicket, and if they were the one coming to this forum for advice I'm sure most would say they need to pay the money owed to the other member(s) asap before anyone makes it into a bigger issue than it is already.

Also not clear how the wider rules on money laundering come into the equation.  The ex-colleague is the one paying money which isn't theirs into a PB account in their name. The money can only be withdrawn by them, they can't use the account to send it to a third party.  The problem for NS&I and the ex-colleague is not knowing whether the OP's money is 'clean'.  But unless the ex-colleague confesses to NS&I and the account is frozen, how else could this affect them repaying what they owe to the OP?

maxsteam

It's not unusual to run into a smart-talking person who offers to run such a syndicate. Yes, you should write a few letters recording what has happened and stating your intention to take legal action and yes, if you don't get a suitable response, you should indeed take legal action. You should also learn from experience. If you want to buy premium bonds each month, the minimum NS&I will take is £25, you do it all in your own name and your chances of winning will be much much higher than if you gave the money to some smart-talking person.

Firstly, there's a risk that the smart-talking person doesn't even buy the bonds, secondly, there's a risk that (s)he flies off to the sun with a £1m prize without anyone else in the syndicate even knowing about the prize, thirdly, there's a risk of whatever happened here happening, fourthly, there's a risk that the smart-talking person will come up with another clever scheme into which winnings should be deposited.