Questions of Cash: 'My bank told me it was safe to keep my shares'
Saturday 23 May 2009
Q. I held Alliance & Leicester shares in a Fidelity Windfall ISA. Last September, I read an article in The Independent that "A&L investors have four weeks to sell" – warning A&L shareholders that if their shares were replaced by Banco Santander shares, they would be liable to Spanish income tax and have to fill in a lot of Spanish tax paperwork if the shares were sold, or face a €100 fine. I decided that if that was true, I should sell my shares. But this was contradicted by Fidelity in a Q&A letter. One of the questions was: "Are there any tax implications relating to this merger?" The answer given was "no". I phoned Fidelity to check. It assured me there was no liability to Spanish income tax and that it would handle any Spanish tax paperwork. I allowed my shares to be replaced by Banco Santander shares. But I have found that The Independent was correct and Fidelity was wrong. Fidelity will not admit responsibility for its mistake. I want either Fidelity to do the paperwork, or pay me to get it done by Abbey Sharedealing. JS, Bristol.
A. Fidelity has listened to its copy of the conversation you had with one of its advisors and accepts you were given wrong information. It has agreed to pay £100 compensation.
Q. Since April last year I have been unable to gain access to my Abbey account. I am a UK citizen, living at present in South Africa. In April last year I had a burglary, in which my laptop was stolen. I warned Abbey in May of the risk of identity theft, requesting my internet passwords to be reset and a new card to be issued with a new PIN. When I travelled to the UK later in May last year I told Abbey that I had received the password but no new card or pin. Abbey informed me that a stop would be put on the card and a new one sent out. I have still not received a replacement card, despite trying again in October to have the card, PIN and internet password re-sent.
Eventually I spoke to someone at Abbey who told me it could not send a card to South Africa, nor could it send a card to my UK address as I was away. They suggested I close the account. I still cannot get access to my money, which is earning only nominal interest. I am now paying a high rate of interest on my credit card, which I would be able to pay off if only I could access my own account. AB, South Africa.
A. You contacted us in February and our experience has mirrored yours – a very slow and poor response. Eventually, at the end of last month we received confirmation from Abbey that it has sent you all the cards and passwords that you require to gain access to your account. Abbey has offered £500 in compensation, which you regard as inadequate as it is much less than the £1,500 you calculate as your loss from the interest charged on your credit card, plus the interest that would have been earned if you had deposited the money in South Africa.
We have been unable to persuade Abbey to increase its compensation offer. We suggest you complain to the Financial Ombudsman Service. The FOS confirms that in calculating compensation it could take into account the cost of your credit card debt and the loss of interest in a South African savings account.
Q. In December last year I bought a new camera from Dabs.com, using a "buy now, pay later" deal run by V12finance.com, also trading as Clode Retail Finance. The amount borrowed was £2,151.01. If I paid it off before September this year there was no interest to pay. If I did not, the monthly direct debit payment would start at £97.25 a month, with an APR of 29.8 per cent.
I sent a cheque in full settlement of the £2,151.01 in February thinking this was the end of the matter. But I then received a letter saying that because I had not paid by direct debit, there was a fee of 1.6 per cent to pay – so I still owed £34.42. This fee was in the agreement small print under "charges, non-direct debit payments". I phoned Clode, which confirmed that if I paid off the whole amount there was no way to avoid this fee, which was charged for all types of payment – cheques, debit cards or cash. Only direct debits were exempt, but I couldn't have made a one-off payment by this means. Surely this means it is not an interest-free deal? IP, by email.
A. You have been charged a transaction fee, not interest, so it is interest-free. And you could have avoided all charges – though this would have been inconvenient for you.
Nick Davies, chief executive of Clode Retail Finance, also disputes the suggestion that the charges were in the contract small print. "The non-direct debit payments cost is clearly stated in the appropriate 'key information' section of the legal agreement, which is located on the front page of that document," he argues.
"The Consumer Credit Act is highly specific in where certain statements/information is presented in agreements of this type and also specifies down to the level of font size, presentation format etc, where/how relevant information can appear. As such we are unable to make the information of this particular term of the agreement any more prominent without falling foul of the requirements of the CCA."
He adds: "I believe it is entirely appropriate to levy a charge to cover our own costs of processing payments to loan accounts which are not made by direct debit as we incur greater costs in these cases." The lesson is to read contracts carefully.
Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: email@example.com
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