Risky savings schemes hit vulnerable consumers - Stunell
March 18, 2003 12:00 AM
Local MP Andrew Stunell is highlighting the dangers associated with high income bonds that often leave vulnerable consumers with less money coming out than they put in.
So called "Precipice Bonds" are sold under many different names including Extra Income Plans and Stockmarket Income Bonds as well as countless others. An average of 4 are launched each month. They offer a higher rate of return than ordinary savings accounts but the difference is there's no guarantee you'll get your money back.
Andrew Stunell said, "Precipice Bonds can seem like a good idea because the rates of return are so much higher, but they target older vulnerable savers who are trying to get a little bit more income in their old age. Savers must be made aware of the risks involved in plain bold English, not the misleading and complicated jargon currently given in small print."
Older people across Stockport are at risk from sales talk by unscrupulous organisations. The Financial Services Authority has issued Guidance Notes to firms urging them to enclose a copy of the FSA Factsheet on High-income products. A good start but more needs to be done. Rules forcing firms to provide information on the pros and cons of their package in plain simple English must be established. Vulnerable consumers must be given clear information.
Mr Stunell is warning pensioners planning to buy any "high income" products before the April 5th cut off to check they have been read the FSA Factsheet first. ENDS
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