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Expat Investor : January February 2008
expatinvestor.com 4 EXPAT INVESTOR January/February 2008 Fast Facts 22002 Abbey International's Capital Guaranteed Dual Option Account -- Issue 1 Growth Option This allows your investment to earn an impressive 28% return if the FTSE 100 Index grows -- or even stays the same -- over a 3½ year period.* OR Income & Growth Option Combines a potential 25% return on two thirds of your investment if the FTSE 100 Index grows, or even stays the same over a 3½ year period, plus a guarantee of a healthy 7% (6.96% AER**) cash return after one year, on the remaining third of your investment. Whichever option you choose your capital is 100% guaranteed, so even if the value of the UK stockmarket falls you are guaranteed to get your capital back. Call 0845 270 7182† quoting EI01 Overseas call +44 (0) 1534 828 282† Fax +44 (0) 1534 828 884 Email email@example.com Visit www.abbeyinternational.com/ei † 8am to 8pm, UK time, Mon to Fri. Calls may be recorded or monitored. *A s long as the closing level of the Index on maturity is the same or higher than the starting level (subject to averaging). ** AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and added each year. New accounts opened with Abbey National International Limited are sited in Jersey and are not covered by the Financial Services Compensation Scheme established under the United Kingdom Financial Services and Markets Act 2000. Abbey National International Limited is a wholly owned subsidiary of Abbey National plc and is incorporated in Jersey with its principal place of business at 19-21 Commercial Street, St Helier, Jersey JE2 3RU, Channel Islands. Abbey International is a registered business name of Abbey National International Limited and is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991. Copies of the latest audited accounts are available on request. ALL DEPOSITS CARRY THE FULL AND UNCONDITIONAL GUARANTEE OF ABBEY NATIONAL PLC. Abbey and the flame logo are registered trademarks. Calls may be recorded or monitored. All gain, no pain Tw o ways to get a great return from the stockmarket, with absolutely no risk to your capital Retail Savings Account 01534 828 282 OFFSHORE NEWS AND VIEWS All around the world right now there are about 100,000 people who are counting the days until the end of February, when they expect to receive 55,000 (£39,000) in return for an investment they made just a matter of months ago and which was just 30 (£21). Yes, that's right, there are no zeros in the wrong place. They invested 30 on a promise of getting back 55,000. The promise came from the grandly named Global Pension Plan, which is based in -- well, we shall come to that in a moment. The point is that the organisers of the plan claim to have worked out a way of short-circuiting the whole process of starting young and saving for a pension that only pays out when you get old. Here's how it works. Your modest fee simply pays for the paperwork of getting a pension policy started in your name. Each policy has a face value of 200,000, which is what the plan is predicted to be worth by the time you retire. But the organisers have no intention of making you wait that long. When they launched the scheme about two years ago, they announced that as soon as they had sold 100,000 policies, a bank was waiting in the wings to take them over for 120,000 apiece (about £85,000). Some of this money would be set aside to keep up policy premiums. Some would go to reward the organisers of the Global Pension Plan. And some would be paid out to members who had recruited other members. But 55,000 would be left for each individual investor. The puzzle, of course, is why any bank would pay billions of euros now for policies that do not mature for decades and which would in any case provide an uncertain return. It would be nice to ask the bank, but the organisers refuse to identify either it or the pension company that is issuing the 100,000 policies. There are a few firm facts though. The scheme's website at www.globalpensionplan.net was registered to a front company in California, though it now has a New Yo rk address. And although it has now been edited out, the website used to list a partner firm in Angola. Payments have gone to a bank account in Estonia. And there are a couple of correspondence addresses in Latvia. None of this inspires trust! But of course the proof of the pudding is in the eating. So, there was a certain amount of excitement among investors when, in October, Global Pension Plan announced it had reached its target of 100,000 policyholders. The excitement subsided though, when the organisers quickly announced that some people had failed to supply the correct paperwork. And before the magic 100,000 figure could be reached again, Global Pension Plan emailed everyone with 'fantastic news'! Members could suddenly buy more than one pension policy per person! And these additional policies would cost only 20 each. Following this closing-down sale, Global Pension Plan says it will definitely bring down the shutters. During January investors will be asked for personal information such as banking details and perhaps a copy of their passport or a similar document. And then, in the second half of February, payouts will begin. The bad news, of course, would be that the anonymous organisers have simply disappeared with around 3 million. And the even worse news would be that they have taken the ID and banking details of 100,000 people with them. The miraculous news would be that they really have found a way to turn a few pounds into tens of thousands of pounds within months. If they can do that, governments will be beating a path to their door to solve the world's pension problems. But, like some of the 100,000 who started to smell a rat last October, I am not holding my breath. Readers are invited to contact Tony Hetherington via the editor at firstname.lastname@example.org Tur ning 30 into 55,000 in just two years Financial investigator Tony Hetherington exposes a pension plan scam that's robbed 100,000 people of 3 million. Credit card chaos Research from Moneyfacts.co.uk reveals that in the two months following the Northern Rock crisis no less than 125 fee and rate increases have hit the credit card market. The survey confirms that credit cards have been hit hard by rising charges, in particular cash withdrawal fees and rates: 69 cards have seen increased cash withdrawal fees, 25 cards now face higher cash withdrawal rates, 18 cards have been hit by higher foreign usage charges, 10 cards have higher balance transfer fees, three cards have increased purchase rates and many cards would have suffered a combination of these rises. Esther James, credit card analyst comments, "With the majority of increases staying away from the headline purchase rates, these fee and rate increases are less in the public view, and often tucked away in lengthy terms and conditions. However, they can still make a substantial increase to the cost of using your card." Ms James advises credit card users to avoid taking cash from their credit card unless they "absolutely have no choice. Interest rates average 23%, and are charged from the date of withdrawal. Also expect to pay a fee of up to 3%."