IF reduce rate... not happy!

MORPH3US

Maybe i'm being unfair here, but would be interested to hear other people's opinions:

Dear Sir / Madam

I have today received a letter from yourselves regarding the rate reduction on my cash ISA. As a result I wanted to express my disgust at the way you operate.

My issues are two fold:

1. Today is 19th October 2009. The letter informs me that "On 3rd October 2009, the interest rate on the IF Cash ISA changed....from 2.85% to 2.49%" I find it increddible that you can reduce the rate I am paid on my ISA and then only notify me OVER TWO WEEKS LATER!!! As a minimum I would have expected you notify me 30 days BEFORE THE REDUCTION!

2. When I first opened my ISA at the start of July, I did so because you were top of the best buy tables. Whilst I never expected you to stay top of the best buy tables forever, I at least expected you to remain competitive. Over the recent months many other ISA providers have increased the rate beyond your own. However for you now to REDUCE your rate is rediculous. Even keeping it where it was there were better options. Now there is just no reason to remain with you.

I would be very interested to hear your responses to the above.

I am also now researching other ISA providers and will look to move my cash away from you at the earliest opportunity.

I would never recommend anyone to yourselves in future as I feel very badly treated for the above reasons!


Fair or unfair?

rb10

They are only following the Banking Code, which states that

If you have a variable-rate savings account with £250 or more in it and the interest rate has fallen significantly compared with the Bank of England base rate, we will contact you within a reasonable period of time to tell you that this has happened

This Code currently applies to all banks & building societies, so it is likely that you'd have the same treatment elsewhere.

However, from 1st November, it will be replaced, and the new IF T&Cs explain what they will do then...

D.3.2.1 Where the change is to your disadvantage we will give you two months’ notice of the change

D.3.2.2 We do not need to give you prior notice in accordance with condition D.3.2.1 of any change in interest rate payable on your payment jar where the change is to your advantage or where the interest rate applied to your jar is linked to a reference rate and the change reflects a change in that reference rate. Where we make such an advantageous change or where the change follows a change to a reference rate, we may apply it to the payment jar immediately and will notify you by putting a notice in at least three national daily papers or by writing to you.

So from 1st November, no bank will be alllowed to decrease rates, unless

(i) It is following a decrease of the same amount in the BOE rate; or
(ii) They give you at least two months notice of the change.

MORPH3US

Thanks rb10, I was wondering what the "regulations" were with this sort of thing....

I'm sure NS&I and Nationwide have always notified me in advance before now.

Baldur

MORPH3US wrote: »

I'm sure NS&I and Nationwide have always notified me in advance before now.

I think that you'll find a lot of Nationwide savers who are/will be surprised when they actually check the rate that their ISAs are earning http://www.nationwide.co.uk/savings/cash_isa/cash-isa.htm

MORPH3US

Sorry, didn't say I had an Nationwide ISA...

I know their rates will be crap, always have been, always will be.

pbw

MORPH3US wrote: »

Sorry, didn't say I had an Nationwide ISA...

I know their rates will be crap, always have been, always will be.

their 5 year fixed rate isa is in the top 3 @4.50%

brewerdave

The IF ISA rate had been down to 1.1% (I think?) cos I moved an ISA out of IF in March; they then jacked it back up again to 2.85%;obviously they have attracted sufficient "new" money to feel confident that they can reduce rates again - wouldn't be surprised to see it slide back down now to ~ 1.5% fairly quickly!
An old cynic!!

PatelA

Really annoyed at this, I'm in the process of moving my ISA from Barclays to IF, now will have to look elsewhere AGAIN.

MORPH3US

I'm off to First Direct mate. 3% FIXED so at least I know the same isn't going to happen again.

AnAlternativeView

rb10 wrote: »

They are only following the Banking Code, which states that



This Code currently applies to all banks & building societies, so it is likely that you'd have the same treatment elsewhere.

However, from 1st November, it will be replaced, and the new IF T&Cs explain what they will do then...





So from 1st November, no bank will be alllowed to decrease rates, unless

(i) It is following a decrease of the same amount in the BOE rate; or
(ii) They give you at least two months notice of the change.[/QUOTE]


I don't think this final comment is quiet right. There appears to be no agreement between providers from, what I can gleam, and it also apparently depends on whether the underlying account is captured under PSD regulations - ISA are not.

bootman

I had a similar thing with Ipswich building society. It was not an an ISA though. It was a 1 year account that I thought was fixed but turned out to be variable.

The rate in October was 6.10% the rate plummeted just after I opened it apparently. I only realised when my cheque arrived yesterday showing I had only £48 interest instead of just over £100 that I was expecting.

I called to say I had had nothing over the year to say the rate had dropped, to which I was replied to by, well we have thousands of customers, we can't write to everyone can we.

Were they no obliged to write to me at least once in the one year period to tell me the account was worthless now?