A customer sought advice from her bank on how best to invest £30,000. She told the bank she wanted a 10-year investment product in which the capital sum would be secure and on which she would have interest payments every six months. She was advised to invest in a particular bond and did so. She understood she would receive £1,500 in interest every six months.

When the first payment arrived accompanied by a statement, she noticed the capital sum was reducing. When she alerted the bank, she was assured the sum always reduced in the early years but would be more than made up for in later years. Five years later she noticed the value of the capital sum was only £20,000 and she brought her complaint to the ombudsman.

The ombudsman ruled that inadequate advice was given in this case. He awarded £6,500 in compensation.