Banks refute claims of keeping savers in the dark - Banking - News - Moneyfacts


Banks refute claims of keeping savers in the dark

Banks refute claims of keeping savers in the dark

Category: Banking

Updated: 28/07/2010
First Published: 28/07/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

UK banks have hit back at accusations that they keep savers in the dark as 'groundless'.

The retort follows claims by Which? that many savings providers fail to keep their customers informed about important changes to interest rates on their accounts.

The group said that research it conducted had found that just four of the 12 banks or building societies it investigated guaranteed to personally inform their customers of all savings rate changes.

Most were found to largely rely on advertisements in papers or the chance of people popping into a branch to announced rate cuts and rises.

Only Cheltenham & Gloucester, First Direct, Co-op and ING Direct promised to personally notify their customers of all cuts or rises, contacting them by post or e-mail.

The research found discrepancies in the approaches of other banks, with some only contacting customers if a cut was of a certain size.

Others were found to make no commitment to making their customers aware of rate changes.

Which? chief executive, Peter Vicary-Smith, said that outdated and inconvenient methods of notice on interest rates were keeping savers in the dark at a time when they needed greater levels of disclosure more than ever.

However, the British Bankers Association (BBA) has hit back, stating that banks will always inform customers of any significant downward movement in interest rates on their accounts.

Customers have been assured that they will be personally notified in advance of any downward movement of more then 0.25% if the account has a balance of £500 or more.

"In addition, customers have round-the-clock access to the interest rates on their accounts, either at the branch or via the phone or web. All a customer needs to do is ask. Which?'s claim that customers are being kept in the dark is groundless," said the BBA.

The banking body also said that personally contacting all customers about every change made would have meant sending 67.5 million letters in 2008, at the cost of £33.75 million and 575 trees.

Barclays, one of the banks criticised by the research, has strongly refuted the allegations of keeping savers in the dark.

"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," it said in a statement.

"This notification will be by personal letter giving two months advance notice of the change."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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