Anchor Trust has apologised for misleading a resident with incorrect information regarding the investment of millions of pounds of contingency funds.
In an email to Campaign against retirement leasehold exploitation, Jonathan Earnshaw, customer relations manager, apologises for erroneously informing an Anchor leaseholder that it had stopped charging a one per cent administration fee in 2013. The resident forwarded the communication to Campaign against retirement leasehold exploitation.
Anchor had previously informed the Mail on Sunday and Campaign against retirement leasehold exploitation that this fee was abandoned on April 1 2011.
Earnshaw told the resident last week: “We appreciate that these arrangements may have caused confusion and we want to help our customers in the continued economic climate. We therefore decided earlier in 2013 to remove our administration fee.”
Today he declares this to be incorrect, and that the fee was discontinued in April 2011 (when interest rates had collapsed to their current levels).
“I must apologise as in my email to Mr XXX I did incorrectly state this was in 2013, so my sincere apologies for the additional confusion this will have caused and thank you for allowing me to clarify this specific point.”
The issue is of considerable importance.
Campaign against retirement leasehold exploitation has raised the issue of Anchor helping itself to the proceeds on millions of pounds of invested reserve funds that it held on trust for residents. This was at a time when investment incomes and interest rates were high.
In 2007 the housing association spent £5,000 asking Anthony Collins Solicitors in Birmingham whether it was legally entitled to do so. The answer was: of course not.
This is published below
The issue was raised by Sebastian O’Kelly, in the Mail on Sunday in February 2011. It can be read here
A series of leaked emails from Anchor executives are published on Campaign against retirement leasehold exploitation (below).
One from a (redacted) Anchor Trust executive of August 22 2007 reads:
“Residents enjoy an interest rate equivalent to 4.5% (base rate 5.5%) whereas some of Anchor’s investments enjoy a significantly higher sum.”
Anchor Trust became a by-word for profligacy, criticised in the Commons when its former chief executive John Belcher was paid the preposterous and unprecedented salary of £391,000.
Campaign against retirement leasehold exploitation believes that if Anchor wrongfully made profits from investing residents’ contingency funds, as the evidence suggests, then it should pay the money back to the sites affected.
The alternative is for the issue to be resolved in court.
Anchorresidentthinkssheisbeingrippedoff
Legal report on the position of AG trust funds – back up
Anchor – Management of sinking funds
A classic example of “treasury management”. The bank would offer a block with their reserves at 4.5%, but offered many blocks will offer 5.5% and the agent or freeholder pockets the difference. Thats why the ACOP should apply to anyone managing blocks not simply agents. If you are doing work to administer it then that goes in the management fee be honest about it! The real reason it was dropped of course was that in some cases they would be hard pressed to get 1% gross.
I recall a situation with erinaceous that moved many reserve funds from one building society to their bank with a drop of over 3% in the interest rate, which they pocketed. No sorry treasury managed. When I transferred the management they had taken 3% of nearly £1M in reserves. That was a big cheque that they had to write.