Triodos Bank is an ethical credit institution that has been offering its customers the possibility of buying CDAs for years. Next, we will tell you what CDAs are and why there are platforms affected by Triodos CDAs. If you were one of the people who acquired a CDA from Triodos, we tell you the reasons why you can claim and how.
What are CDAs?
A CDA, short for a Share Depository Receipt, is a complex banking product that is neither a deposit nor a share. If we were looking for a financial product similar to this, we could say that it is very similar to preferred shares. The main characteristics of CDAs are the following:
- CDAs are complex investment products and not savings products, hence we speak of financial products with a high level of risk.
- The person who has invested in CDA is not protected or guaranteed through the Spanish Deposit Guarantee Fund .
- The CDAs are not exchangeable in any case for shares and do not have any expiration term, so they are perpetual in time.
- We have said that CDAs are not shares, and therefore, they are not publicly traded. As they are not listed on the stock exchange, the price of CDAs is set internally by the entity that issues them, and outside that internal market they have no value.
In short, CDAs are a kind of shares of a financial institution. The purchase of these CDAs allows the financial entity to continue with its mission, but since it is not a regulated product, investors are not guaranteed the recovery of their initial investment, in addition to the fact that the price of the CDA is not set by the law of supply and demand, but is set internally, as it is not listed on an open market.
Triodos Bank CDA: current situation
In this case we are talking about Triodos Bank CDAs. Triodos Bank is an ethical banking entity that decided to pause the purchase and sale of CDAs due to the arrival of the coronavirus and its economic consequences, which took place in March 2020.
It is true that, at the end of that same year, in October, the purchase and sale was resumed for a few weeks, but it was paused again, and it was already at the beginning of 2021 when Triodos announced the suspension of the activity because, apparently, there had been a higher volume of CDA sell orders than buy orders.
In addition, Triodos Bank decided to reduce the value of the CDAs by 30%, which meant for those who still held CDAs a loss of 30% of their investments. As we mentioned before, the CDAs are not shares and their value is not governed by supply and demand, which is why the entity was able to modify the value of its price by 30% at that time. Also, let’s remember that the CDA market was still suspended, so they couldn’t sell their CDAs and recover their investments either.
Claim of those affected by the CDA of Triodos
If you are one of the people affected by the suspension of the Triodos CDA buying and selling market , you should know that breaches have been detected on the part of the entity regarding the way of marketing the product. These are:
- The intricacies and features of the product were not properly explained
- Many of those affected were not given the relevant documentation on the purchase as they had made it by phone and/or internet
- The suitability and/or suitability test was not carried out, which is mandatory for this type of product.
- Non-compliance with consumer regulations, financial and contractual regulations
- As we mentioned before, CDAs are similar to Preferred Shares, but they are not, and there was a confusion in the name of the product
- There was a great variation in the characteristics of the contracted product and in the way it was related to the market
All of these breaches lead us to wonder whether Triodos customers would have bought CDAs if they had been properly explained by sed about the complexities and features of the product, with the associated risks and how its pricing works.
Right now, all those people who bought CDAs have no possibility of recovering their investments , which have also been reduced by 30% due to the unilateral price change of Triodos.
How can I claim if I am affected by Triodos Bank’s CDA?
Entities such as Arriaga Asociados are experts in claiming complex banking products such as Triodos CDAs. In fact, there are already almost 28,000 sentences won on products of this nature, so they have great experience in this type of claim.