I have written to H and MAS 3 weeks ago. Until now, I have not got any reply from them yet. I have bought Pinnacle series 6 & 7 from H. I felt that I am misled and I this was what happen to me.
Last year June 2007, I was looking around for banks that offered good fixed deposit rates. Through the website, I found out that H offered one of the highest interest fixed deposit rates.
My wife and I then went to H as it was near to our workplace. When we approached the counter staff on the intention of opening an fixed deposit account, she instead persuaded and recommended us the Pinnacle Notes Series 6 & 7. She told us that this product was as safe as fixed deposit but with a much higher interest paid out. Upon hearing this, we were quite excited and keen of learning more of this product. She then introduced us to the FM J, as she was busy assisting customers who had signed up for the Notes.
J started by showing us the brochures at the side of the counter. She told us that the response was overwhelming the H might stop accepting further applications as they had a lot of back log to process and clear.
The following was what she had told us during that short time :-
* The notes issued are invested in five leading banks, namely DBS, Citibank, UOB, OCBC, BOA and as well as SingTel.
* It pays between 5.2% and 5.0% interest per year for a 5.5 year tenure.
* Series 7 is tied to the share price of the mentioned 5 leading banks and SingTel.
* The risk is low and it operates just like the fixed deposit account.
* She did mention that the principal amount is not guaranteed but she assured us that the 5 leading banks and SingTel will not go bankrupt. She told us that even if you put your money in the fixed deposit account and the bank goes bankrupt, you will also stand to loose your principal amount.
* She further explained that as the money will be invested in the mentioned 5 leading banks and SingTel, even if you are so unlucky that one of the banks goes bankrupt, you will note loose all your principal amount, unless all the 5 banks go bankrupt a the same time.
* During the short time that she explained the product to us, she kept emphasizing the word "secured" credit linked notes. Hence, the product is extremely safe as it is linked to the 5 banks and SingTel.
* We were under a bit of pressure to sign up on the spot as she kept saying that due to the overwhelming response, H would stop accepting further applications these one or two days, before the closing date.
We were definitely being misled into believing that the Notes are used to invest in the 5 banks as well as SingTel. We invested $X Each in both Series 6 & 7 Pinnacle Notes.
Hastily, she filled up the application form for us, with brief explanation. Thereafter, she told us that she needed to do a simple survey of my profile. She said that this was required by her company. She flip through the survey form and randomly asked a few questions. She asked about our particulars, whether do we need the money in the next five years, and also did we purchase any similar products from other banks. The rest of the questions, she said she will tick "average/medium".
Before we left the bank, she handed a copy of the application form and survey form to us. Since then, we did not hear anything from H until 11 July 07. We received from DMG & Partners a confirmation notice that we had bought the Series 6 & 7 Pinnacle Notes. We have also received 2 payouts, on Jan 08 and July 08.
When we learnt of the collapse of the Lehman Brothers Bank and protest from investers of Pinnacle Notes, we decided to check it out from H.
On 9 Oct 08, I went to H to check if the Notes that we have invested are alright. Only then that I came to realise that our money are actually not invested in the 5 mentioned banks and SingTel. It was instead invested in 125 companies and 2 (Lehman Brothers and Washington Mutual) had already bankrupt. I was shocked and asked to see the list of the 125 companies. They were initially not very willing to show me but I insisted. I was even more shock when I received their email, as it is not only invested in the 125 companies but also used to buy credit card bills of Chase Bank.
I asked why we are not shown this list, prior to our purchase of these Notes. His explanation was that the list of companies which they have invested were only released after the offer period closed.
We were angry and fustrated that how can a Relationship Manager from such a reputable financial institution, deceived us into believing that the product is issued and invested in the 5 banks and SingTel, and that it is very safe, just like fixed deposit account.
Did the Financial Insitution do a risk assessment before they undertake to sell the product? Why are we not shown the list on what were invested. No clear and detailed explanation is provided before our purchase. Why H did not update us after the closing date on the list of companies that the notes invested. Why H did not update us when 2 of the 125 companies go bankrupt?
KTS
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