Questions of cash: Should I sell my ailing with-profit bond?


Q. Four years ago, advised by an independent financial adviser, I invested £20,000 in a Scottish Mutual with-profit investment bond.

Q. Four years ago, advised by an independent financial adviser, I invested £20,000 in a Scottish Mutual with-profit investment bond. There have been no profits since March 2003 and the surrender value is now £17,000. Is the value likely to fall further, or rise?
ND, Shrewsbury.

A. Tom McPhail, head of pensions research at IFA Hargreaves Lansdown, says: "There is little realistic prospect that the fortunes of the Scottish Mutual with-profits fund will improve in the foreseeable future. The company has relatively low reserves and the fund has adopted a conservative investment strategy. While your capital should be secure, investment growth is likely to be modest. Banco Santander, the new owner of Scottish Mutual, does not plan to sell the company, but is unlikely to pump more capital in." He suggests that you now consider the cost of moving your money out, compared with the investment growth achievable elsewhere. We think you should also consider whether you were mis-sold the bond. This might depend on whether you were warned the bond might lose value and your assessed risk tolerance.

Q. I have a Halifax credit card that I pay off each month. On my last statement was a late payment fee, even though the sum was paid on the due date.
MA, by e-mail.

A. Payment on credit card accounts needs to be made prior to the due date - usually three days or so - to allow for the payment to be transmitted. But Halifax admits it caused confusion as showing your account as paid on the due date, but treating the payment as cleared a day late. To apologise it is crediting your account with £25, but asks you to make payments earlier in future.

Q. My wife's Cahoot debit card was stolen in October and the theft reported to the bank within two hours. The thieves used the card nine times that day and nine times in November - only stopping when they were arrested. I reported each transaction to Cahoot as soon as it appeared on the statement, but Cahoot said it could not prevent the transactions taking place. We are still waiting for six transactions to be credited back to the account.
DR, by e-mail.

A. Cahoot says that your wife's card was cancelled as soon as it was reported stolen, but transactions from cancelled cards will still be processed except where the amount is above the retailer's "floor limit". As all the transactions were of small value, no authorisations were requested. All transactions were refunded to your account soon after payment was deducted, as part of the normal procedure for suspending transactions after a card has been stolen. Cahoot only reported the card for inclusion on Visa's "hotlist" after several transactions and it was clear that the card was being used frequently. While Cahoot seems to have been slow to have placed your wife's card on the "hotlist", this had no bearing on events because none of the transactions required authorisation and would not have been prevented by inclusion on the hotlist. But Visa International says that while it is up to banks to decide when to place a stolen card on the hotlist, this is frequently done "before the customer has hung up the phone to report the theft".

Q. My credit card issuer has sent me a list of suggestions to help me protect myself from identity theft. But what happens to all the personal information sent to the financial institutions themselves? My bank admits that anyone working in my branch can access my information. Surely things like the photocopy of my passport should be locked away. Don't the money laundering regulations protect me on this?
SP, Cydweli.

A. The money laundering regulations do not specify how financial institutions should store and protect documents and data relating to customer's personal details, such as photo-copies of passports. The Financial Services Authority (FSA) requires firms to take adequate steps, which are determined by the firms themselves. But your concern is valid. A FSA report last November warned financial institutions to be aware of the risk of organised crime gangs placing "agents" within their companies as staff, in order to facilitate fraud and identity theft.

Q. In September 2003 I bought and paid nearly £5,000 for a new bathroom to be supplied and fitted by B&Q, backed by its "Guaranteed Installation Service", which promised satisfaction over the quality of their work. Instead, I have had a serious of problems, which would cost about £1,600 to put right.
NJ, Brighton.

A. We understand that you issued a county court summons against B&Q at about the same time that you contacted us. B&Q has now put right, free of charge, most of the problems and promises to complete outstanding matters in the near future.

* If you have any queries, write to: Questions of Cash, The Independent, 191 Marsh Wall, London E14 9RS, or e-mail: cash@independent.co.uk. Please send copies, not originals.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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