Advert watchdog chucks out NS&I complaint

In its response NS&I claimed it “always be able to repay a customer’s investment in full without any interest no matter how much that customer had invested because, unlike other commercial banks and financial service providers, they were not limited to the guarantee offered by the Financial Service Compensation Scheme but were backed by HM Treasury”.

The organisation argued HM Treasury was part of the government, which had “historically never defaulted on a loan payment” and was AAA-rated, with tax-raising powers.

Further concerns over potential fraud were rejected by NS&I in its response to the ASA, which claimed 64% of fraud cases between December 2010 and November 2011 had not resulted in a reinstatement, highlighting its fraud detection and investigation powers.

Instances of fraud had, NS&I claimed, fallen year-on-year for the period in question.

The watchdog reports: “We noted NS&I’s comments about their policy for refunding incidents of fraud and understood that whilst fraud was potentially a realistic threat to NS&I customers, in the vast majority of cases a consumer’s investments would remain secure.

“We considered that the average consumer would interpret the claim that investments with NS&I were “100% secure” within the context of the previous part of the sentence which stated ‘We’re backed by HM Treasury ’ and therefore as a claim that the amount of money invested by consumers would be available to be returned without loss because it was backed by HM Treasury.

‘We therefore considered that within the context of the security outlined in the marketing claim, NS&I had demonstrated that customer investments were secure.’