gs rates are terrible right now, but small print means unless you read the ‘right’ paper you could end up even worse off.
Why? Well a frenzy of savings rate cuts took place at the start of this year, with more than 100 savings accounts affected.
To stand any chance of making a return, savers need to move their money when rates dive.
But it appears that some providers are exploiting rules about telling customers of changes, meaning account holders might not even hear when their savings are making an even lower return.
The wording about how providers communicate rate changes is vague. And different rules apply to different accounts.
For instance, providers are generally obliged to tell customers when they are cutting rates in “good time” and using a “durable” form of communication.
The Financial Services Authority (FSA) has clarified that in “good time” is understood to be at least two months in advance. Although with certain accounts, such as easy-access, in good time can be argued to be as little as 14 days.
But what about a “durable” form of communication?
This became an important question when the Post Office recently cut rates on some of its online accounts, including its Online Saver Issues and Online Reserve accounts.
Cuts averaged 0.5 percentage points and were set to take effect on January 17.
But rather than writing to its customers to let them know, the provider, which counts savings as the largest part of its financial services repertoire, instead advertised in two papers on January 3 – the ‘Daily Telegraph’ and the ‘Daily Mail’.
Though the FSA said advertising in a paper alone doesn’t count as a durable form of communication in its book, a spokeswoman confirmed that in line with its terms and conditions on the Post Office savings accounts affected, it can choose to solely advertise rate changes in a paper.
However, the provider did later email online customers but, many didn’t receive notifications until after 17 January – when the rate changes had already taken effect.
Anyone not reading those specific papers who hadn’t handed over their email details had little chance of finding out about the changes at all.
The Post Office advertisement
And what about the rule where providers are supposed to tell customers about rate changes at least two months advance?
A spokeswoman for the Post Office said: “We are taking steps to ensure that no customers are inconvenienced... We would like to take this opportunity to apologise to our customers who feel we have fallen below our usually high standards.”
Susan Hannums, director of savingschampion.co.uk, said: “In an age when information is readily and quickly available online and personal information can be sent easily electronically, at minimal cost, the process of displaying rate information in random newspapers is frankly antiquated.
“Would providers use the same method if they were awaiting payment or requesting something from their customers? It’s frankly a smoke and mirrors tactic that doesn’t help anyone other than putting money in the providers’ pockets.”
No communication required
In some cases, providers don’t even have to bend the rules to keep quiet when slashing rates.
The rules say providers don’t have to tell you if:
• You have less than £500 in your account
• An annual change in rates is less than 0.5 basis points (there are 100 basis point in 1 percentage point )
• A change of less than 0.25 basis points happens at one time
As savings rates languish at all time lows, small changes in rates make a real difference between the top-paying accounts and those near the bottom of the tables.
Savers simply can’t rely on their provider to point out rate cuts and must scrutinise statements for rates changes.
Alternatively, you can use an online Rate Tracker service. This lets you enter account details and will send you and alert when a bonus or fixed-rate period is ending or the underlying rate changes.
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2users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentIkenna • 10 hours ago Report Abuse
I can't stop laughing after reading this report. I always tell my wife that if you belong to the government (beneficiary) and you don't listen to Sky, BBC or read Metro and Evening Standard, you're doomed.
The most most interesting part in this report is the part that says, "would providers use... More
44users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentNailed • 17 hours ago Report Abuse
broad day light robbers who have the blessings from our tax funded government
68users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down2users disliked this commentRob • 17 hours ago Report Abuse
Time for a Savers Revolution. For to long just about every financial product has been ripping off the saver/investor.
What we need is a massive demand to withdraw money...Just for 1 day. It will scare the S##t out of the Financuial Services Industry. A 24 Hour Northern Rock Taster of the... More
46users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentChris • 17 hours ago Report Abuse
I was wondering how they could get away with this until I read that the FSA made the rules, makes sense now
56users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down1users disliked this commentRICHARD • 17 hours ago Report Abuse
FSA, who do they work for again??? look it up. shouldn't they be renamed PCFB. protection Cartell For Banks!
64users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down3users disliked this commentRT • 18 hours ago Report Abuse
Financial services = legalised scammers
27users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentMALCOLM • 16 hours ago Report Abuse
l'm just about to retire, and despite my hard working life, l'm being screwed by my pension company and the good old tax man left right and centre. With the little money that l have saved, it's gonna be put under the bed so l don't get screwed anymore! l feel so sorry for our youngsters!
39users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down1users disliked this commentCE • 17 hours ago Report Abuse
Listen to no advice do what the hell you want with your money.As for papers all they are good for is wrapping chips and wiping your #$%$.
22users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentPAUL • 16 hours ago Report Abuse
It seems the U.K. is rapidly becoming a Nation of Scammers. Rip offs, mis-selling, lousy insurance policies, dreadful pension returns, Government taxes and local Council car patking charges to name but a few. Will the last person to leave the U.K. please read the gas and electricity meters, tell... More
4users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentSteve • 13 hours ago Report Abuse
Don't buy a national newspaper on principle so I was never told . . . was ripped off with their "cash cards" for foreign currency a couple of years ago, so the PO has lost yet more business
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