Financial Ombudsman service A WARNING

[lorcher]

In 2007 An IFA sold my wife and I an offshore bond value £200 000 .We were shortly to start a new life in france and had bought a buisness there.We made it clear that we required a product that would be tax efficient when income was taken we had heard that in france such products are called Assurance Vie.The IFA told us that any income taken from the bond would be taxed exactly the same as an AV but it was a superior product.It is a Royal Skandia bond issued in the Isle of Man.

We asked him to clarify this in the 30 day cooling off period and hold a letter stating that income tax on income fron the bond would be treated exactly the same as income from an Av.He also stated that he had confirmed this with a firm of french accountants.

 

We had asked at the french post office and it was easy to obtain a simple AV .We followed his advice and bought the bond as it was said to be far superior.

As the move to france got closer we became concerned with both the funds chosen by the IFA and the accurucy of his advice.In Jan 2008 he instigated his firms complaints proceedure which led to the FOS.

 

A fully documented case was sent to FOS.

The initial complaint was rejected as it was said to be concerned with investment performance.The FOS did not notice that at the time of complaint the bond was in profit.The standard of adjudication was appalling.

 

The second opinion found in our favour and the IfA was told to pay compensation of the original investment plus interest and based on the exchange rate we would have had at the time.In his findings the adjudicator noted that the letter re tax treatment as above had not been in the file of papers sent to FOS by theIFA .A further e mail relied on by the IFA was not produced.

 

My wife was running her buisness which was a bed and breakfast .We had decided not to touch the bond until the matter was resolved.

The IFA then contested the second decision aided by his insurance company.A long rambling attack full of irrelevant statements none of which should have affected the decision.

 

A third opinion was issued signed by the same adjudicator which reversed the second decision.The actual opinion was written by a mysterious gentleman said to be a QC The language used was that of the High COurt.The reasons given were unbelievable.

By this time lack of income and the stress of dealing with the volumn of argument was starting to have effects on us.We throughout this period were living below the basic income tax level.

 

The FOS were given evidence that the bond did not qualify for preferential income tax as per Av as it was issued outside the EU and did not have french fiscal representation.The tax on income is far higher from our bond ,a gap that gets worse as time passes as Av products enjoy further tax reductions after 4 and 8 years.

We asked for a copy of a letter referred to by the adjudicator,it was a letter from the IFA or rather his fellow director who was handling the complaint.It states that the french accountant who had been quoted as confirming the tax treatment of the bond had in fact said he was unable to confirm the tax treatment of income from the bond as he was unfamiliar with the product.A very different position to the one stated to us.

 

The ombudsmans final decision was issued in two parts.He accepts that the product was unsuitable but not that is was missold.The IFA was told to pay the early surrender penelties which by now are minimal plus £250 for in convenience to us.No further payment to be made.The value of the bond is now approx 210000.We sold our buisness after the third opinion and downsized to a boat.The last submission made by the IFA was so offensive it began a row over whether to seek judicial review , this led to my wife walking out our marriage is over .The strain of 3 years of this was not the only reason but it was significant.

 

The IFA was allowed to keep the sale commission plus the servicing commission.The FOS have said he will have to pay the excess on his insurance but ironically as I and my wife have not spoken and have not signed the acceptance the decision will lapse tomorrow.I do not know where my wife is but think she may have had a nervous breakdown.She did tell me she will not con sent to a judicial review.

 

My apologies for the length of this but I urge caution to anyone who thinks justice is dispensed by the FOS.As I say I have full documentation of this case part in wales part on the boat in FRance.The Fos ignored the alledged deliberate miselling of the bond and also a fully documented proof of forgery of the events log submitted as evidence by the IFA.The FOS is funded by the people it is to regulate it does not bite the hand that feeds it.Does anyone think I could ask the Police to consider the evidence as a possible case of fraud or obtaining money by deception?

Edited July 26, 2011 by citizenB
Formatted for easier reading :)

[rebel11]

Hi lor

 

Welcome to CAG

 

The guys will be happy to advise as soon as they are available.

[lorcher]

Thank you will await with interest

[AuntieP]

Since you have not accepted the FOS decision, you can still take the matter to court if you wish. If you had accepted the decision, you would be stuck with it.

 

It sounds like a complex case, perhaps beyond the abilities of some FOS adjudicators and ombudsmen. But anyway, you are not bound by the decision if you have not accepted it.

 

I dont know if the police should be involved, but legal advice from a suitably qualified barrister might be the best way forward.