Buyers beware – check the small print

Whether you are signing up for a new credit card or ordering the latest mobile phone, the chances are that you will have not read the small print before you put your signature on the dotted line.

Let’s face it, we’ve all done it – and I am not any different. Several years ago, I signed a contract without so much as a second glance at the tiny black writing tucked away at the bottom of the last page.

However, buyers beware. It wasn’t long before my actions caught up with me following a dispute over the contract. Thankfully, it was resolved without going to court, but I did end up seeking legal advice and the settlement cost me more than I thought it would.

While it is tempting to ignore the small print on a contract, such a move can result in your bank balance becoming leaner than you anticipated.

The importance of reading the small print is vital in all areas of life, but particularly so when it comes to buying financial products as it is your hard-earned cash at stake.

Competition is rife among companies who are falling over themselves to secure your custom and one way they can entice you is with new and innovative products – but such enticing offers may have strings attached.

For example, Abbey recent launched a Super ISA offering a staggering interest rate of 10 per cent. This is several percentage points ahead of the competition, which has offered cash ISAs in the region of six per cent during the last few months.

However, if you opt for the Abbey deal, you soon find out that in order to benefit from this competitive rate of interest, they must also put an equal amount – or more – into Abbey’s Guaranteed Growth Plan.

Adrian Lowcock, of independent financial advisers Bestinvest said: "The Abbey Super ISA looks very attractive on one side offering 10 per cent, but on the other side you have a guaranteed return of 6 per cent over three and a half years which amounts to 1.7 per cent a year. With the minimum investment period being three and a half years this may not be suitable for everyone.

"Banks and most financial institutions use a really attractive carrot on one hand to tempt people into a fairly unattractive product on the other side. You have to look at the whole package, not just the carrot."

Abbey explained that the Super ISA can be taken out with any Abbey investment product. No end date has so far been announced for the ISA.

If you want to make sure that you get the most of your savings and investments, make sure that you know exactly what the deal is and what returns to expect or you may end up being deeply disappointed.

By Myra Butterworth

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