Simon Read: Mis-selling claims invited from ‘death bond’ investors
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Version 0 of 1. Have you heard of the EEA Life Settlements Fund? Consider yourself lucky if you haven’t. It was an unpleasant investment opportunity that in effect encouraged people to take a gamble on when certain US citizens will die. The way in which bonds in the fund – and similar ones – was sold, in short, was that people with terminal illnesses could cash in their life insurance to get money immediately, when they needed it. Investors would have to continue paying the premiums on the policies and then get the benefit of the payout – which had been assigned to the fund – when the terminally ill person died. It’s all a bit distasteful in my view, but the bonds also proved to be a bit useless. Why? Because the people on whose lives the policies were held ended up living longer than expected. The net result was that investors had to keep paying the premiums for much longer, leaving them actually losing out. The City watchdog warned about the bonds a few years ago, labelling them “high- risk, toxic products”. They were banned from sale to retail investors, and this week the Financial Conduct Authority advised anyone who invested in the EEA fund to make a mis-selling claim against whoever sold them the investment. But there is only a limited time in which to do so and in some cases the deadline for making a claim may start to expire from 1 December, so investors need to act quickly. If the firm that mis-sold you the investment has gone out of business, you can try the Financial Services Compensation Scheme. |