Co-op Bank accused of misleading pensioners

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THe troubled Co-operative Bank reassured pensioners there was “no need to be concerned” about their investments in the group just a month before revealing plans to slash the value of their savings in a bail-out.

A manager had replied to a worried bond holder with a £50,000 investment in the bank in an e-mail just days after the Co-op’s credit rating was cut to “junk” status by Moody’s.

The following month, the bank revealed that it had a ­capital shortfall of £1.5 billion and told savers they faced losses of up to 40 per cent on their ­investments.

The pensioner emailed to say he and his wife were “extremely fearful that we are about to lose all of this very-important retirement savings nest egg, the income from which we rely upon”.

The manager wrote back, claiming “there is no need for you to be concerned”. He said: “We do acknowledge the need to strengthen our capital position… and have a clear plan to drive this forward. I hope this provides some reassurance.”

Several of the Co-op’s retail bondholders are pensioners who rely on the interest that the bonds pay, which ranges from 5.5 per cent to 13 per cent.

In a statement, the Co-op said that the evidence uncovered in the e-mails “raises questions, which we are looking into”, adding “we apologise if the customer feels he was misled”.