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Couple Nearly Bankrupted Following Mutual Fund Losses

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Bethlehem, GAElizabeth W and her husband are upset about how they were treated when they suffered enormous mutual fund losses. Elizabeth says that it took too long for their mutual fund provider to get them their money after they requested it be pulled from the mutual funds. Although they now have their money back, Elizabeth says they should never have gone through what they did.

Financial ProblemsIn early 2008, Elizabeth and Jerry invested approximately $103,000 with their mutual fund provider. "What we did was we rolled over a 401(k) into the mutual fund," Elizabeth says. "They [the mutual fund provider] put it into the stock market but we were told it was very diversified, the risk was supposed to be minimal and the money was insured. That's what we were told—but that's not what we saw happening."

Approximately 2 months ago, the mutual fund started losing money. It had initially gone up, so that the fund was worth a bit more than the initial investment. But 2 months ago, the mutual fund dropped drastically in value.

"It was at $105,000 then $103,000, then $80,000 and I told my husband that when it hit $75,000 we'd have to call and pull it out," Elizabeth says. "When we called, the mutual fund was down to $60,000. So, in about a month, it dropped a lot. They never called to tell us that the mutual funds were losing money and ask us if it could be rolled over and they knew that was all we had. It was my husband's 401(k)—we had no other savings."

As if the dramatic losses in the mutual fund were not enough, Elizabeth says she and Jerry had difficulty getting their money back from the mutual fund provider.

"We phoned and asked to be pulled out of the mutual funds," Elizabeth says. "This is where it got ugly. We phoned at around the end of October or the beginning of November. We went to the bank and they said we needed papers to get the money. On November 12, they sent us the papers and we filled them out and took them back. They said that everything was in order and they would send the check. We finally got the check today [January 13] after my husband threatened them with a lawyer.

"We kept calling them [the mutual fund provider] and asking where the check was and we found out that they resubmitted the money in the stock market. They knew we needed that money. We did not give them permission to put that money back in the market. We were behind on the mortgage and they knew that but still they didn't send us the check when we asked for it.

"We got back something like $54,000 and still they withheld $5,000 or $6,000. It was almost 3 months before we got the check. It only took 2 days for us to give them the money [when it was originally invested] but it took 3 months to give us that money back. I think they didn't want that money surrendered.

"It's bad business—I don't care who you are. They almost put us into foreclosure by not sending that money. We've lost over $40,000 and were almost bankrupted by this. We almost lost everything."



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