€300,000 REFUNDED, PLUS €5,000 AS COMPENSATION: A husband and wife, aged 85 and 84 respectively, invested €300,000 in a six-year bond on the advice of a financial adviser.

Eighteen months later, the husband passed away and his widow took up full-time residence in a private nursing home. Though the bond had a capital protection value of €283,000 at January 2013, if it was cashed in in August 2008 the surrender value was €248,000 with an early cashing-in penalty of €10,000.

The widow claimed that she and her husband had been mis-sold the bond. The financial provider defended the investment advice he had given to the couple, arguing that the couple fully understood the nature of the investment.

Although the ombudsman accepted the couple were provided with detailed information on the bond, he questioned the suitability of this investment, taking into account their life expectancy, circumstances and particular financial needs.

He ruled that recommending an investment product with a term of six years, as well as hefty penalties for early encashment, to an elderly couple was a dereliction in the provider’s duty of care.

He ordered the financial provider to buy back the bond for the original amount of €300,000 as well as an additional sum of €5,000 as compensation.