Last weekend, Which? accused West Bromwich of encouraging savers to invest more money into its E bond 23 than is covered by the Financial Services Compensation Scheme. It said savers “must invest more than the £50,000 covered by the FSCS” into the fixed-term bond to access the 4.27 per cent return as a monthly income option.
Which? personal finance campaigner Vera Cottrell says: “Using an attractive rate as a carrot to encourage savers to breach the compensation limit is irresponsible.”
But West Bromwich has hit back at Which? as it says the accusations had not made clear that people could invest exactly £50,000, get the full benefits of the bond and be fully covered by the FSCS. It also reminds Which? that joint accounts will be covered up to £100,000.
West Bromwich says: “We strongly reject allegations made by Which? that we are irresponsibly encouraging savers to invest more than the limit covered by the FSCS and, in response, we are now considering legal action.
“We are extremely disappointed that Which? has not discussed any concerns about our bond with anyone from the society and Which? has yet to present the society with the basis for its alleged concerns or, indeed, the method of research that led to the seriously misleading statements.”
Ample Financial director Colin Parkin says that there is always a fear that savers going direct will only see the bond’s rate and ignore the small print.
He says: “If the saver just goes in-store, are they being made aware of the details? Investors must be aware of all the risks if they go direct. Any good adviser would point out the FSCS limitations.”