Government The Inquiry Into Collapse Of Kaupthing Iom

[Sebrof]

ETA: I have just seen that the Co-op won't permit early withdrawals on a fixed term deposit. So I withdraw my statement pending further investigation.

 

With HSBC you can break some fixed terms deposits in the sum involved is less that £50k. I was recently advised by the bank to split a sum being deposited into chunks of £49,999

 

You can usually get your money out of a fixed-term or notice account, subject to interest penalties but it is normally at the discretion of the bank. However some banks offer fixed-term bonds where the terms and conditions often explicitly forbid early redemption.

 

Thanks for that. I have no idea what the Derbyshire were offering, but I am surprised that people would put all their money into a bank with no possibility of withdrawing it.

 

S

[triskelion]

Thanks for that. I have no idea what the Derbyshire were offering, but I am surprised that people would put all their money into a bank with no possibility of withdrawing it.

Higher returns.

[bellyup]

Thanks for that. I have no idea what the Derbyshire were offering, but I am surprised that people would put all their money into a bank with no possibility of withdrawing it.

Higher returns.

 

Not so Most banks have various types of accounts fixed at various lengths of time. sometimes longer does not mean higher rates.

 

However it is advantageous to the banks to have money for longer fixed periods of time

 

Not all accounts are fixed many are instant access (mine was)

 

The thing is people were advised that the IOM was a safe place to deposit savings.

 

And this is what makes the IOM a business centre.

 

Now that many here are all intent on insulting the very customers that have been the life blood of the IOMs economy for decades how do you think that it is going to survive?

[triskelion]

And this is what makes the IOM a business centre.

Any evidence of this?

[The Voice of Reason]

John Cashin did have an account with the bank.

So much for client confidentiality!

 

Its nothing to do with client confidentially at all

 

I spoke to him after the disaster and he told me that he too had an account with the bank.

 

 

So he tells you this in a private discussion and you feel the need to disclose it on a public forum

[manshimajin]

Depositors with the Derbyshire on fixed term were not given the option to withdraw their deposits .

What was actually said in writing at the time KSF took over the Derbyshire accounts by either Derbyshire or KSF?

 

If there was a communication from either organisation did this state specifically that you could not withdraw your funds (in itself that would be an 'amber light')?

 

Or in the absence of communication was it assumed that depositors were not permitted to withdraw?

 

Did anyone write to either organisation to check this out and get a definitive answer that they couldn't withdraw their funds? If this answer was received did anyone at the time talk to the Manx regulator to check whether that was correct?

 

I would have thought that a depositor would have been entitled to withdraw funds (though your comments seem to prove me wrong) based on the fact that there was a substantial change in the conditions relating to management of depositors funds (ie new and less well known provider, change of senior management, change of ultimate owner to a non-EU based company, change of financial structure etc).

 

Is it a case of 'not given' the option to withdraw deposits or 'failed to withdraw their deposits'?

[pongo]

etc blah blah++

Is it a case of 'not given' the option to withdraw deposits or 'failed to withdraw their deposits'?

 

This speculation seems rather pointless but normally a fixed term means exactly that. Look at the T&C of similar arrangements. It is not like a 90 day deal where you get to close early but you lose the interest.

[bellyup]

John Cashin did have an account with the bank.

So much for client confidentiality!

 

Its nothing to do with client confidentially at all

 

I spoke to him after the disaster and he told me that he too had an account with the bank.

 

 

So he tells you this in a private discussion and you feel the need to disclose it on a public forum

 

There is nothing to hide here .

 

Mr Cashin is a director of the Bank ( as well as deputy regulator)

 

Transparency is important.

[bellyup]

Depositors with the Derbyshire on fixed term were not given the option to withdraw their deposits .

What was actually said in writing at the time KSF took over the Derbyshire accounts by either Derbyshire or KSF?

 

If there was a communication from either organisation did this state specifically that you could not withdraw your funds (in itself that would be an 'amber light')?

 

Or in the absence of communication was it assumed that depositors were not permitted to withdraw?

 

Did anyone write to either organisation to check this out and get a definitive answer that they couldn't withdraw their funds? If this answer was received did anyone at the time talk to the Manx regulator to check whether that was correct?

 

I would have thought that a depositor would have been entitled to withdraw funds (though your comments seem to prove me wrong) based on the fact that there was a substantial change in the conditions relating to management of depositors funds (ie new and less well known provider, change of senior management, change of ultimate owner to a non-EU based company, change of financial structure etc).

 

Is it a case of 'not given' the option to withdraw deposits or 'failed to withdraw their deposits'?

 

 

Its a case of misrepresentation.

Most people are depositors not detectives.

Any misgivings were quickly dispelled by Mr Aiden Doherty the MD who said not only was everything the same but deposits were MORE secure because of the parental guarantee

[Sebrof]

etc blah blah++

Is it a case of 'not given' the option to withdraw deposits or 'failed to withdraw their deposits'?

 

This speculation seems rather pointless but normally a fixed term means exactly that. Look at the T&C of similar arrangements. It is not like a 90 day deal where you get to close early but you lose the interest.

 

Couldn't disagree more.

 

First, two people I know had fixed deposits with one of the Irish banks, Anglo-Irish I think, and were able to withdraw by suffering a penalty. A fixed term means the deal lasts for a fixed amount of time. It doesn't (necessarily) mean you can't get your funds, and I personally would never put a significant proportion of my money into a scheme where the funds were completely locked.

 

Second, it is of great importance to this discussion whether Bellyache had an opportunity to take out his money. A large part of his argument is that he didn't invest with KSF; he invested with Derbyshire, and he has repeatedly claimed that he had no choice but to keep his money with KSF. If we find that that was true, then I have a modicum of sympathy for him; but with his track record, it probably isn't true.

 

S

[Sebrof]

Thanks for that. I have no idea what the Derbyshire were offering, but I am surprised that people would put all their money into a bank with no possibility of withdrawing it.

Higher returns.

 

You're clearly correct, but I'm still surprised.

 

S

[scarbunny]

etc blah blah++

Is it a case of 'not given' the option to withdraw deposits or 'failed to withdraw their deposits'?

 

This speculation seems rather pointless but normally a fixed term means exactly that. Look at the T&C of similar arrangements. It is not like a 90 day deal where you get to close early but you lose the interest.

 

Couldn't disagree more.

 

First, two people I know had fixed deposits with one of the Irish banks, Anglo-Irish I think, and were able to withdraw by suffering a penalty. A fixed term means the deal lasts for a fixed amount of time. It doesn't (necessarily) mean you can't get your funds, and I personally would never put a significant proportion of my money into a scheme where the funds were completely locked.

 

Second, it is of great importance to this discussion whether Bellyache had an opportunity to take out his money. A large part of his argument is that he didn't invest with KSF; he invested with Derbyshire, and he has repeatedly claimed that he had no choice but to keep his money with KSF. If we find that that was true, then I have a modicum of sympathy for him; but with his track record, it probably isn't true.

 

S

 

 

This is true, I also know people who had their money in long fixed term deals with Bradford And Bingley when they were on the brink of going under, they could have withdrawn their money at any point but they would have incurred a fee, around 0.5% at the time. Most fixed term accounts have a get out clause(sp?). Mainly because no one can be sure of their financial situation in a year let alone 5 or 10.

 

The thing is people were advised that the IOM was a safe place to deposit savings.

 

And this is what makes the IOM a business centre.

 

Now that many here are all intent on insulting the very customers that have been the life blood of the IOMs economy for decades how do you think that it is going to survive?

 

So basically the bank, who’s sole job is to keep your money as long as possible, told you everything was ok and there is no risk to your money, and you took this at face value?

 

Your life saving had moved into a whole new bank and you didn’t research what would happen if it went bust?

 

If you had done your research you would have know what you would be entitled to should it go bust, if you weren’t happy with the arrangements in place then you could have withdrawn all of your money with no penalty yet you decided not to bother. Now either you didn’t do your research and that shows a serious lack of “due diligence” on your part, or you did your research and felt that you were happy with the protections that were in place, in this case you cant start moaning now you’ve lost your money. Either way you are more responsible for your life savings than anyone, you lost them through your own lack of action, the fact your account was instant access makes this even less excusable.

[WTF]

etc blah blah++

Is it a case of 'not given' the option to withdraw deposits or 'failed to withdraw their deposits'?

 

This speculation seems rather pointless but normally a fixed term means exactly that. Look at the T&C of similar arrangements. It is not like a 90 day deal where you get to close early but you lose the interest.

 

 

i sort of agree with that, BUT, if they wish to change the terms of the contract ( as in WHO it is held with? ) then people should have had the option to remove their funds without penalty. the fact they weren't offered this option suggests that even then, the funds were not actually there to cover their deposits when the derbyshire lot held the accounts. they just sold out to KSF to dump a lemon.

[pongo]

Most fixed term accounts have a get out clause(sp?).

 

Not true. The only "get out clause" wrt most fixed term deposits is if the account holder dies. Same with fixed term money market deposits.

 

ETA: same with fixed term 'bond' accounts too. Death is the get out option.

 

Though it is true that there are some similar accounts which are more flexible.

[pongo]

A fixed term means the deal lasts for a fixed amount of time. It doesn't (necessarily) mean you can't get your funds

 

Withdrawals are not normally allowed from fixed term deposits.

 

More flexible packages do exist. By definition they are not fixed.

 

Eg: from the T&C of a typical 18 month fixed account - this one currently offered by Britannia International:

 

3.2 No withdrawals, closures or transfers are permitted prior to maturity.

 

Eg: from the T&C of a typical 18 month fixed account - this one currently offered by The Co-Operative Bank:

 

6.1 The term of your account is fixed for the period of investment selected by you on your application form.

You cannot withdraw your money for the term of the account.