Interest rates for TheONE Account staying up

clare1970 · 15 April 2008 at 10:41AM

This is my first post on this forum so I do hope I am correct in naming the account in the title.

I've had the ONE account for nearly 10 years and as a product have always been pleased with it.

Just got a letter today saying that although the BofE interest rates have dropped by .25% the ONE account rate will not change. I am madly trying to find something somewhere that says they will always respond to Bank of England Interest rates drops and rises but can't find anything anywhere.

Can anyone help? Are they allowed to NOT lower their own rates when the BofE does?

Any advice gratefully received.

Clare

Rick62 · 15 April 2008 at 10:46AM

Well it makes a change from their marketing department posting on the site with their name in the title!

Yes they are allowed to, if it is their SVR rather than a BOE Tracker.

Cosmo · 15 April 2008 at 11:00AM

I have the original Virgin One account and got the same letter this morning, I also checked the terms and conditions - yes they can change the rate when they wish.

However, while going though my files, I saw a previous rate notification letter dated 10th May 2001. Where it states: "our promise is that we'll follow the base rate and pass the benefits of interest rate cuts on to our customers straightaway".

I rang Virgin and they have no record of the letter, presumably it is generated automatically, but have had one other person mention the same letter. They will be looking in to it as soon as I can get a copy of the letter to them.

stevo29 · 15 April 2008 at 1:27PM

I have had a One Account since it was a Virgin One account too. I remember that they promised to pass on rate cuts immediately and am fairly certain that they used to repeat this promise every time they sent out a notification of a change in rate (I'm at work at the moment and haven't been able to check my file).

I did a quick search on one account reviews and a number of them do refer to them passing on rate cuts straight away.

I have no doubt that they promised to pass on the rate cuts. The trouble is that I'm not sure what we can do about them breaking that promise if it's not in the T's & C's.

Doh · 15 April 2008 at 1:51PM

i'm disapointed to hear this, i've had a one account for 5 years and have been very pleased with it.

Cosmo · 15 April 2008 at 3:23PM

stevo29 wrote: »

I have no doubt that they promised to pass on the rate cuts. The trouble is that I'm not sure what we can do about them breaking that promise if it's not in the T's & C's.

I was on the phone to them for 25 minutes and after speaking for a while with someone quoting from the standard Q&A sheet I got put through to a manager and then they spoke to someone more senior. They did restate the original T&C documents but were careful not to just dismiss my claim out of hand. I got the impression that they were taking it fairly seriously.

stevo29 · 15 April 2008 at 3:40PM

Cosmo, you have more patience than me. I ony spoke to them for about 10 minutes and didn't go up to the line manager. I told her about the promise and she said that they never made it. I told her they made it in writing and she said they never did. We then said "did" and "didn't" for about 9 minutes and we ended up agreeing that if I could produce a letter with the promise on it that they would investigate further. I just hope I can find the rate change notification, normally I just file the statements and everything else tends to get binned.

I did find an interesting article with a quotes from Richard Branson and the Virgin MD saying it's not fair and honest if rate cuts aren't passed on. There's a bit about people voting with their feet too.

http://www.prnewswire.co.uk/cgi/release?id=46980

Coveredinbees!!!! · 15 April 2008 at 3:54PM

I got the same letter too, I have been reading the blah that came with my mortgage offer and all it say is they can change the rate, it doesn't mention anything about tracking the base rate or anything like that. Not happy at all but they have you by the nuts.

setmefree2 · 15 April 2008 at 4:12PM

Hi

I read that banks were going to start raising interest rates on offset accounts (sorry I can't remember where - Sunday Times Sunday, 6th April maybe

), as part of their policy of clawing money back their losses, along with increasing the SVR.

Cosmo · 15 April 2008 at 4:26PM

stevo29 wrote: »

Cosmo, you have more patience than me. I ony spoke to them for about 10 minutes and didn't go up to the line manager. I told her about the promise and she said that they never made it. I told her they made it in writing and she said they never did. We then said "did" and "didn't" for about 9 minutes and we ended up agreeing that if I could produce a letter with the promise on it that they would investigate further.

That is interesting, it seems to hinge on having the written proof. Virgin claimed they did not have the letter as it did not directly relate to my account and had been automatically generated. They did very much want to see the letter and seemed genuinely disappointed that I couldn't fax it to them straightaway.

If anyone wants to give it a try the letter was dated Thursday 10 May 2001 - coinciding with a BoE rate change - and the first couple of paragraphs are:

"Today the Bank of England announced a 0.25% decrease in the base rate and we're following suit by reducing all Virgin One account rates by the same amount. Once again, all our customers will benefit immediately as we'll be dropping our rates from midnight tonight.

This is the third base rate reduction in the past few months. And with experts predicting even more reduction this year, our promise is that we'll follow the base rate and pass the benefits of interest rate cuts on to our customer straightaway. This is something that few other lenders offer - and when you think the top five lenders made an extra $20 million out of their customers by delaying their interest rate cuts in April - it's clear that you're better off with a One account."

Signed by Jayne-Anne Gadhia.

Even if not binding (but promise, in writing, is pretty strong) it looks quite embarrassing.

xest · 15 April 2008 at 7:22PM

I am disappointed too. RBS could have sent the letters out much sooner and checking their own forecasts they believe Interest Rates will fall over the next year -> RBS Interest and Exchange Rate Forecast, so I presume that they are building up their defences to prepare for worldwide economic gloom :rotfl: or lining their pockets wherever possible:mad:.

I have always been a bit of a hoarder and have kept all communications with the One Account. Here is another sample letter that shows the guarantee, this time when the rates went up.

Extracts below from letter dated 8 September 1999

After seven successive cuts in the base rate - each one immediately followed by a drop in One account rates - the Bank of England today announced that it is increasing the base rate by 0.25%. From midnight tonight, all One account rates will increase by the same amount.

One account customers - unlike many others - have benefited in full from each of the seven rate cuts we've had since last October. And when the base rate falls again, you can be sure we'll follow suit - straightaway.

Best Wishes

Jayne-Anne Gadhia
Managing Director.

I think that they believe that the following in the offer document covers them.

At any time we can alter the Interest Rate used to calculate the interest you pay. We will of course give you notice of any change at the earliest opportunity.

Like most businesses of this size I guess they have covered their bottoms fairly well, but if the letter was misleading then this could cause them trouble. Does Accepted Practice come into play? I have a whole bunch here and will start rustling feathers.

Interestingly my Offer Letter of 26th August 1999 details a rate of 6.70%, which means I am about the same today, almost ten years later.

Don't forget that if you call up the call centres the people on end are just doing their jobs - probably to pay their mortgages too.

Interest rates for TheONE Account staying up

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