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Cofunds overpays £1m to investors

Around 1,000 investors in the Threadneedle strategic bond fund have been asked to return a total of more than £1m after a computer error by fund supermarket Cofunds.

The error meant that investors were paid 100 times more income than they were entitled to from the £350m corporate bond fund. It occurred after a decimal point was put in the wrong place when income was calculated.

Cofunds has written to investors and asked them to return the overpayments after deducting £10 for the inconvenience caused.

Ironically, the strategic bond fund has proved popular with investors because it has been paying a good level of monthly income.

Cofunds has a legal right to recover money that is not returned but says almost 98 per cent of investors have been willing to surrender the overpayments.

Marketing director Rick Andrews says most clients in the fund are wealthy elderly investors and so had no need for a sudden windfall, which aided recovery of the money.

He says: “We make about 200 distributions such as this every month and this is the only time that something like this has happened.

“There is no right of contract there that allows them to keep the money but we have offered that £10.

“We have been pleased that the news has been so well received by the clients and that we have been able to recover everything so swiftly.”

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