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Savers kept in the dark about rate changes

30 July 2010

Many savings providers fail to keep their customers informed about important changes to interest rates on their accounts, according to new research from the experts at Which? Money.

The consumer champion found that only four of the 12 banks or building societies investigated guarantee to personally inform their customers of all savings rate changes, with most relying largely on adverts in newspapers or the chance of people popping into a branch to announce smaller rate cuts and rises.

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% or if a series of smaller cuts add up to more than 0.5% over a year. At a time when the Bank of England base rate is at just 0.5%, customers could find that they are not being notified about rate cuts which are proportionately very large.

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 personally notify customers of changes to interest rates, no matter how large the cut may be.

Which? chief executive Peter Vicary-Smith says:

“Our rigorous research shows that outdated and inconvenient methods of notice on interest rate changes are keeping savers in the dark for longer, at a time when they need greater disclosure than ever before.

“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. The research gave a resounding thumbs down to the major high street banks and building societies, with Santander receiving the lowest customer score of just 39 per cent.

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