Case study 2An 89-year-old woman invested a sum of €500,000 in a secure investment for a period of five and a half years on the advice of a friend who claimed to have investment knowledge.

The woman died before the end of the investment term and the executors of her estate complained to the ombudsman.

The building society concerned admitted that it had reservations about the suitability of this product for the woman and had told her adviser. The main reservation was that if the customer died within the term, only the original amount invested would be repaid, with none of the "locked in" value paid out.

The ombudsman took the view that the building society had a duty to warn the customer if she died before the fund matured no return would be paid out.

It did not do this and the customer was under the mistaken impression that some return would be paid out to her estate. The increase in the value of the fund on the day of her death was €10,439 and the ombudsman directed €4,000 compensation be paid to the estate.