Banking News Savings Account Rate Chages Hidden From Savers Says Which 18471105

Savings account rate chages hidden from savers, says Which?
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Savings account rate chages hidden from savers, says Which?

28 July 2010 / by Lois Avery

Savers are being kept in the dark about rate changes on their savings accounts, according to Which?.

In an investigation the consumer magazine’s money team discovered that only four out of Britain’s 12 big banks and building societies were keeping customers informed about changes to interest rates.

Most were relying on adverts in newspapers or the chance of people popping into a branch to announce smaller rate cuts and rises.

The Which? team found that only Cheltenham & Gloucester, First Direct, Co-op and ING Direct promise to personally notify their customers – by either email or letter – of all cuts in interest rates on their accounts.

Other major banks, however, only guarantee to personally notify customers if the rate cut is more than 0.25 per cent or if a series of smaller cuts add up to more than 0.5 per cent over a year.

Although the changes may seem small a difference of 0.5 per cent is proportionally quite big when the Bank of England’s base rate is only 0.5 per cent.

Bank of Scotland, Halifax and HSBC add to the confusion by claiming they may or may not personally notify consumers about smaller rate cuts, while Nationwide Building Society makes no commitment whatsoever in its terms and conditions to notify customers of changes to interest rates.

Which? chief executive Peter Vicary-Smith said:  “This is just another example of banks treating their customers badly. As our latest savings satisfaction survey shows, once again it’s the smaller players that offer better service and have happier customers.”

First Direct, which is one of just four major banks to guarantee to personally notify customers of all rate cuts, also came top in the latest Which? Money savings satisfaction survey, followed closely Co-op. 
But blames savers’ apathy for not getting the best rates.

Kevin Mountford, head of banking at said:  “We have seen a year on year increase of people not checking their savings rate, with over a third failing to ever check their current deal. Our findings also show a third of savers opened their account over ten years ago, but when it comes to savings, loyalty does not pay, and these customers are most likely getting a raw deal on their savings.

“Banks are reluctant to inform customers of rate changes, so the onus should always be on the customer to ensure they are getting the best deal. We encourage all savers to get online or call their bank to find out what rate they are currently on, then search for the best rate available and switch as soon as possible to avoid any further loss of income.”

In response to Which?’s claims that banks are misguiding customers Barclays responded saying: “Since November 2009 Barclays has gone beyond the regulatory requirement for notification of rate changes and instead notifies all savings customers of any unfavourable changes to their terms and conditions, including notifying of all negative rate changes. This notification will be by personal letter giving two months advance notice of the change.”

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Written by Editorial Team