Savers not being told about interest rate changes
Many banks and building societies are failing to keep savers properly informed about changes to the interest rates on their accounts, comsumer group Which? has claimed.
According to a study carried out by Which? Money, only four out of the 12 banks and building societies investigated during the research told customers personally, either by letter or by email, that the rates on their savings accounts were being reduced.
Most customers are forced to rely on in-branch posters or newspaper ads for the information.
Other banks only guarantee a personal notification if rates are cut by more than 0.25 per cent or if a series of smaller cuts cumulate in a reduction of more than 0.5 per cent over the course of a year.
Which? argued that such policies penalise customers who bank online as they will miss out on branch announcements, while others may not see the relevant newspaper announcements.
The consumer rights organisation also pointed out that, with Bank of England interest rates held at 0.5 per cent, even small rate cuts could be “proportionately very large”.
Banking rules state that providers have no obligation to tell customers if their rate changes by less than any movement in the Bank of England’s base rate.
Peter Vicary-Smith, chief executive of Which?, said: “It shows that outdated and inconvenient methods of notice on interest rate changes are keeping savers in the dark for longer, at a time when they need greater disclosure than ever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.”