An unemployed single mother had €10,000 saved in a credit union account. She told the ombudsman that a sales representative from an insurance company told her he would look after her cash. She withdrew the €10,000 from the credit union and it was invested in a unit-linked fixed interest fund.

She was dismayed to discover three months later that her investment had lost €500. Her losses exacerbated and when she cashed in the policy eight months later she was down €1,100. The complainant felt that she was misled about the nature of the investment. The company said it had completed a fact-find on the customer to make sure that the fund was suitable for her needs.

Examining the fact-find document, the ombudsman noted that the sales representative had classified the customer's "investment risk attitude" as "slight". She was described as single, unemployed, with two young children, and she was living with her parents.

The ombudsman felt that the complainant did not understand that the fund could go down in value as well as up. Her circumstances required the preservation of capital at all times, he said, and the investment fund should not have been offered to her.

He ruled that the full €10,000 investment should be returned to her and he referred the sales practices of the insurance company to the financial regulator.