Misleading Plum ISA Terms

iambenten

I took out a Plum ISA back in April 2024 and there appears to be a few rather surprising negatives that I did not appreciate.

I came here when trying to understand why the headline rate is currently 4.92% when my app says I am only getting 4.67%. On a variable rate product, I am not used to different rates for different customers for "easy access" accounts.

If you withdraw (transfer out to a new provider) the full amount during a month then you lose all the interest earned during that month, which is as much as £80+ lost if you had invested £20K (so its best to withdraw at the very start of the month) - I would have hoped that the interest accrues to the point of transfer. This feels a little unreasonable, but is however in the small print.

Worst of all, the bonus which is roughly a fifth of the total interest is totally lost if you withdraw within 12 months - the wording "which includes a bonus rate of 0.88% AER (Variable) for the first 12 months" slyly avoided any suggestion that the bonus can effectively be taken away, meaning a loss of £176 for a £20K withdrawal just before the year is out! This makes it a minimum term account not a traditional "easy access" variable interest Cash ISA. No mention of this important detail was on their website at the time - very devious and dishonest!

There is a law about having the most important terms and conditions being made prominent and I think this last point borderlines falling foul of that. Had I known then I probably wouldn't have even taken the account out. It looks like they may have realised this as the website now states "Includes a bonus rate of 1.14% if kept for 12 consecutive months". Its still ambiguous as its in the headline but missing from the all important small print in 2 places where it should obviously be clearly stated.

There are other negatives but these are made relatively clear, e.g. lower rate for transfers in, and rate drops if more than 3 withdrawals.

I can't confirm for all of the above negatives but at least some of them don't apply at other providers. I check MSE and BCWYC and expect them to flag such important negative terms - I am very disappointed that their reviews did not mention the loss of bonus issue!

Rather than being the flexible and highly competitive account I signed up for, it now appears I am stuck on a comparatively low rate (which is variable so they can even make it lower!), else I lose 10 months of bonus equating to £147 if I withdraw it.

Ayr_Rage

As you have found, all the information is available in the full Ts and Cs, which we are all encouraged and sometimes required to open (but not read!) during the application process.

The one thing though is that the terms are not misleading, they are all there if you delve deep enough.

The moans you have are repeated all over t'internet, all you need to do is search "Plum ISA reviews"

masonic

I'm not sure how much more prominent you would want it:

https://withplum.com/cash-isa

https://www.moneysavingexpert.com/savings/best-cash-isa/#topeasy (main listing in the rate table, then info when you "click for info")

If someone spent just 2-3 minutes on either MSE or Plum's site reading the key information, I'm confident they'd find this. While comparison sites are a great time-saver when researching the best products and services, they don't replace doing your own research into a product you like the look of. There are several prominent red flags associated with this one, which are not hidden.

iambenten

Ayr_Rage said:

As you have found, all the information is available in the full Ts and Cs, which we are all encouraged and sometimes required to open (but not read!) during the application process.

The one thing though is that the terms are not misleading, they are all there if you delve deep enough.

The moans you have are repeated all over t'internet, all you need to do is search "Plum ISA reviews"

No, I did not say that the info is all in the Ts and Cs, and it certainly wasn't when I took one out - I checked before posting.

masonic

iambenten said:

Ayr_Rage said:

As you have found, all the information is available in the full Ts and Cs, which we are all encouraged and sometimes required to open (but not read!) during the application process.

The one thing though is that the terms are not misleading, they are all there if you delve deep enough.

The moans you have are repeated all over t'internet, all you need to do is search "Plum ISA reviews"

No, I did not say that the info is all in the Ts and Cs, and it certainly wasn't when I took one out - I checked before posting.

If you are sure that actions they have taken are contrary to your agreement, then you can insist that they act in accordance with it. But the points you mentioned above, about the differing rates, the bonus interest, the loss of accrued interest for that month when withdrawing, were all included in the pre-contract information, which forms an integral part of the individual agreement between you and Plum. It is not unusual that individual rates or promotional offers are detailed only in the pre-contract information and not the product terms that apply to all customers. I believe this account has been offered at different rates depending on the date it was opened, for example.

Ayr_Rage

iambenten said:

Ayr_Rage said:

As you have found, all the information is available in the full Ts and Cs, which we are all encouraged and sometimes required to open (but not read!) during the application process.

The one thing though is that the terms are not misleading, they are all there if you delve deep enough.

The moans you have are repeated all over t'internet, all you need to do is search "Plum ISA reviews"

No, I did not say that the info is all in the Ts and Cs, and it certainly wasn't when I took one out - I checked before posting.

It's all freely available to read before you apply as @masonic has indicated, time to hold your hands up!

iambenten

masonic said:

I'm not sure how much more prominent you would want it:

https://withplum.com/cash-isa

https://www.moneysavingexpert.com/savings/best-cash-isa/#topeasy (main listing in the rate table, then info when you "click for info")

If someone spent just 2-3 minutes on either MSE or Plum's site reading the key information, I'm confident they'd find this. While comparison sites are a great time-saver when researching the best products and services, they don't replace doing your own research into a product you like the look of. There are several prominent red flags associated with this one, which are not hidden.

You have posted current info and not what was available when I opened an account - I already pointed this out.

If "someone spent just 2-3 minutes" reading my post then they would see that I said neither MSE or Plum had the required info at the time - that's the whole point of my post! They need to be transparent and clearly state that you won't get any bonus at all if you don't have the account for more than 12 months - making this effectively a 12 month minimum term account rather than a standard "easy access" account, as having it for less than 12 months has a severe interest penalty.

Like I said, it wasn't stated when I took out the account and its currently in Plums headline but not the small print and MSE does not state it at all even now (which you have confirmed in your post!). Having to read between the lines is not an acceptable replacement for being clear and transparent and law very much supports that with important contract terms legally having to be prominent.

I accepted the red flags which I pointed out as they were known and I was ok with them - but not being trapped into a potentially poor paying account where leaving within a year loses up to around 1% of the interest (just under 1% when I took it out but even more now). As I said this major restrictive negative was NOT pointed out by Plum, MSE or BCWYC.

However way you look at this, its sly, misleading and arguably dishonest - I have found other reviews that point out some of their other practices in a similar way.

flaneurs_lobster

If you believe that Plum have acted in a way that is contrary to the T&Cs that applied when you contracted with them and that this deviation is detrimental to you (and you can show evidence of this) then you have grounds for a formal complaint to Plum and thereafter to the Ombudsman if not satisfied with their response.

You can complain all you like about MSE and/or Be Clever... but it'll do no good, they are information services flagging up savings & investment products based largely on their headline rates, they do not claim any other authority. If you don't like their content (or the lack thereof) then stop reading them.

masonic

iambenten said:

You have posted current info and not what was available when I opened an account - I already pointed this out.

You didn't state in your post when you opened the account, but here is a capture of the same webpage from 3rd April 2024, showing remarkably similar information:

https://web.archive.org/web/20240403044935/https://withplum.com/cash-isa/

iambenten said:
If "someone spent just 2-3 minutes" reading my post then they would see that I said neither MSE or Plum had the required info at the time - that's the whole point of my post!

If that was the whole point of your post, then clearly it built upon a falsehood.

iambenten said:

They need to be transparent and clearly state that you won't get any bonus at all if you don't have the account for more than 12 months - making this effectively a 12 month minimum term account rather than a standard "easy access" account, as having it for less than 12 months has a severe interest penalty..

They stated that "To qualify for the bonus rate on new contributions, customers must meet the following conditions: Maintain a minimum balance of £100 (and) Make no more than 3 withdrawals in a year". Below this, they stated "any earnings from the Plum Bonus rate paid at the end of the promotional 12-month period (on the anniversary of when the customer first opened their ISA)". If you don't hold the account for 12 months, then clearly you cannot maintain the minimum balance for the promotional period.

The account can be used as an easy access account, providing you limit the number of withdrawals, and if you decide to move your money elsewhere, you leave £100 behind in order to continue to meet the bonus terms.

iambenten said:

Like I said, it wasn't stated when I took out the account and its currently in Plums headline but not the small print and MSE does not state it at all even now (which you have confirmed in your post!). Having to read between the lines is not an acceptable replacement for being clear and transparent and law very much supports that with important contract terms legally having to be prominent.

The screenshots in this thread demonstrate that you are mistaken. If you acknowledge it is "currently in Plums headline", and it also appeared there at the beginning of April, what are the chances it was not there on the day you visited the page. Once again, you cannot rely on comparison sites to give the full details of accounts in their rate tables. MSE states that there is a bonus rate and that this is paid after a year, the only thing they don't mention is the minimum balance requirement.

iambenten said:
However way you look at this, its sly, misleading and arguably dishonest

People sometimes misremember the details when they open an account. Throwing around accusations of dishonesty without investigating the matter is generally unwise. It can reflect badly upon one's self.

iambenten said:

I have found other reviews that point out some of their other practices in a similar way.

That's the beauty of the internet. You can always find people who agree with your views, no matter what they are. Incidentally, there are some valid concerns that have been raised about some of Plum's actions, just not these ones. The information they provided about this product was sufficient for a reasonable person to understand how the account worked before they applied.

iambenten

So I did miss the single point that you had to keep the account for 12 months to get the bonus - but you have to admit this is not typical of a supposedly easy access account so easily missed or misunderstood. This is effectively a 12 month minimum term account, or the interest rate is very poor - nowhere is that point prominent.

Quote: The account can be used as an easy access account, providing you limit the number of withdrawals, and if you decide to move your money elsewhere, you leave £100 behind in order to continue to meet the bonus terms.

This is not true if you want to retain the tax-free status as one of the terms say you can only withdraw the whole current year funds which means that you can't leave £100 and hence can't meet the bonus requirements - its all part of the trap!

Most importantly though is that I did read the summary box and it made no mention of this as a requirement to receive the bonus - neither in the "What is the Plum Cash ISA interest rate?" section nor in the "How can I withdraw money from my Plum Cash ISA?" section where it clearly should tell you about losing the bonus, both where it talks about the requirement to receive the bonus rate.

Then there is this "Closure of Cash ISA account You can open and operate your Cash ISA all directly through Plum App. To close your Cash ISA, please contact Customer Services at info@withplum.com. If you decide to close your Cash ISA account mid-month, you will forego any interest earned that month." Yet again, no mention of losing the whole bonus even though it mentions loss of interest just for the month!

Again, this is all about clarity and transparency and you should not have to read between the lines - and if it was clear enough then I am sure MSE and BCWYC would have not missed this loss of bonus issue.

However, I am going to stop here because clearly we are not going to agree. Hopefully this serves to bring to light Plum's practices to others who may then not fall for the traps (as pointed out by others).

masonic

I agree with you that it is bad form on their part not to support partial transfers out for current year money, given they launched this ISA for the tax year where partial transfers of current year money were permitted for the first time in the ISA regulations. Though many other older providers still do not accept partial transfers in of current year money, it would be their prerogative to refuse. But in the case of transfer outs, the T&Cs are clear about losing the bonus and forfeiting interest. They even point to a loophole in the last sentence:

Providing you have any money from a previous tax year available, you can transfer in £100 of this prior to transferring out current year funds in full.

I don't think MSE missed it (and I don't know what or who BCWYC is), but there is only so much detail that can be included in a short-form summary. There have been a number of instances of 'oddball' accounts being listed on the main site, that would come heavily caveated here on the forum due to unusual features.

I am surprised you haven't mentioned them unilateral moving to paying interest an additional month in arrears, as that struck me as the most objectionable thing about their offering.