Swedish bank to Ingrid, 87: ‘invest long term’

Swedish bank to Ingrid, 87: 'invest long term'
Swedish bank SEB advised an 87-year-old customer to invest her savings 'long term' and has now been found to be at fault by the consumer complaints board.

The Stockholm octogenarian was in 2005 advised by her bank, SEB, to invest in an endowment insurance scheme.

The woman duly followed the advice of her local branch and invested 500,000 kronor ($80,000) that she had recently inherited.

The scheme was however not due to offer any repayment of her invested capital until 2012 at which point she would be 95-years-old. Furthermore she would then only receive a maximum 8,000 kronor per month over five years.

The woman duly reported the bank to the Swedish National Board for Consumer Complaints (Allmänna reklamationsnämnden – ARN) alleging that the advice she had received constituted negligence.

The ombudsman has now found against SEB and instructed the bank to repay the endowment insurance with interest as well as all charges incurred in connection with the investment.

According to documentation witnessed by the ombudsman, the then 87-year-old had expressly told the bank’s investment advisor that she wanted her money to remain available in case of illness.

The ombudsman argued that the woman should have been advised to pay off 500,000 kronor of her mortgage, although her request for repayment of mortgage interest for the interim period was rejected.

Member comments

Become a Member to leave a comment.Or login here.