A WOMAN has claimed an investment represented to her by Allied Irish Banks as risk-free saw €100,000 of her savings drop to just €40,000 after five years.
Doreen Rock (63), Ballinora, Waterfall, Cork, claims AIB assured her the investment was guaranteed when she agreed to put the €100,000 into a five-year Hibernian Aviva “spectrum bond”, a property investment scheme backed by a number of “blue chip” businesses including AIB, Bank of Ireland and HMV.
Ms Rock, a mother of five, said she made clear to an AIB financial adviser in September 2006, when making the investment, that she wanted the capital sum protected.
Among various claims, she alleged AIB did not carry out dealings with her in accordance with normal practice and banking standards and failed to adhere to her instructions.
She claims the bank misrepresented to her that the return on her investment would be greater than if she left the money in a low-yield deposit account.
She also alleges she was subject to undue influence and induced to invest in the bond when the bank knew she had no prior investment experience.
She is claiming damages for breach of fiduciary duty or, alternatively, a declaration the investment agreement is invalid.
Opening the case, Alice Fawsitt SC, for Ms Rock, said she and her husband Liam had sold a house in Gleneagle Valley, Cork, in 2005 and were left with €200,000 from the sale.
The money was on deposit with AIB, with which the couple had banked since 1974, Ms Fawsitt said.
Ms Rock regularly went to the bank’s Bishopstown branch where the tellers would ask her if she was getting the best return on the money. While Ms Rock said her money was “safe where it is” and she did not want to do anything with it, she eventually agreed to meet one of the bank’s financial advisers, Ms Fawsitt added.
Ms Rock’s husband, a joint-account holder on the deposit account, did not accompany her on the day she signed the investment agreement but had told her to make sure that the money was protected.
Ms Rock told Mr Justice John MacMenamin she only got involved in the investment because the bank kept putting pressure on her every time she visited it. Asked by the judge why did she think the investment was better than just leaving it on deposit, she said the financial adviser told her she would get a better interest rate.
Under cross-examination by Mark Sanfey SC, for the bank, she agreed that in the first year of the investment, she got a return of €9,000.
By 2008, her capital had fallen to €82,000, she said. She was upset by that but when she went to the bank demanding to speak to somebody, she was told the adviser had taken a year off.
When she eventually got to speak to somebody, she was advised to leave the money where it was, that “things were looking good”.
Earlier, she agreed with Mr Sanfey that she and her husband had in 2002 invested €20,000 in an accumulator investment, €3,000 of which went into a tracker bond, with the capital sum guaranteed.
The hearing continues.