Can Nationwide Building Society Get Away With This?

John_M_Business

Am I the only one who's got stiffed by Nationwide Building Society?... Do I have any means of seeking compensation as complaints are just as waste of time if there's no substance... If you can spare the time to read my issues, perhaps you could help?

Being a busy father of three, and running a small business it's pretty difficult to keep on top of everything going on. One of the things you need to rely on is trust. And businesses you should trust the most are ones that you actually have a stake in - like the Nationwide Building Society. As a mutual, they should be working in my best interest...

So, why is it having been a current account customer, savings customer, past mortgage customer and holding all three Child Trust Funds with Nationwide that I am going to, in the next 3-4 months, transfer all my business elsewhere?

It's because I have been on the end of a sting operation called (in the Marketing trade) 'Inertia Marketing'. The thinking behind this is quite simple - if you have a lot of people using a service, then you reduce the payout and make sure you do as little as legally possible to communicate changes, and then all those who don't actively move (many of whom are completely unaware this is happening anyway) lose until they see what's going on.

However, Nationwide have pushed it to just about the perfect sting operation:
1. They have reduced the savings rate in gradual stages from an average rate (just under 2% gross) ot a derisory rate (under 0.5%)
2. They only pay interest yearly so it's difficult to see these reductions easily
3. They started reductions just before the start of the last tax year (January 2009) so that they could get past March 2009 without being noticed
4. They believe that, even with all my direct contact details and email address (emails are the CHEAPEST form of direct communication), putting a few adverts in the press and having changed the rates in their premises that they have done enough (whilst recognising that both footfall and press readership is at an all-time low)
5. They created a 'new' account they didn't promote to existing savers called 'e-Savings Plus' which is exactly what e-Savings was, so the few that did notice, could move accounts internally
6. They deliberately don't publish the interest rates on the e-Savings accounts when you login to your account (which they do for other accounts)

I have also noticed that they have now reduced the interest rates on their Child Trust Funds (again, something they will not promote actively to anyone).

Rephrasing all the above in 'Inertia Marketing' terms: Nationwide have reduced the rates on this account in a deliberate, below the radar manner. By taking advantage of yearly interest payments, and lack of direct promotion of these changes to account holders, they have maximised customer income to them whilst all the savers lose out. They have also created a very similarly named account in order to both confuse, but also to attempt to retain the proportion of customers who have worked out what they're up to.

So, there you have it, is this behaviour to trust? I don't think so. There is no reason for them to have done this to such an extent without the express intent to sting e-savings account holders. How can a savings account have an interest rate of under 0.5%? Particularly an internet-based one?

If you are a customer who's had a similar experience then please post your thoughts? If you're a moneysaver familiar with this kind of situation - can you give me any ideas? I have already directly complained to them, but they've 'flat batted' it claiming that press ads are enough (and even then, press ads with very small print in only a few newspapers).

If you are a customer who has had a similar experience, please contact me. If you are thinking of choosing Nationwide - then don't fall for the 'we work in your interests' message: as we all know actions speak louder than words. And their actions are indefensible.

Thank you for reading.

John B
"Trusting losers in Nationwide Building Society's Sting Operation"

Lokolo

1. They have reduced the savings rate in gradual stages from an average rate (just under 2% gross) ot a derisory rate (under 0.5%)

- Have you seen the base rate? If you don't like change in rates, get a fixed rate.

2. They only pay interest yearly so it's difficult to see these reductions easily

- No its not, just keep the interest rates webpage in favourites, and check every couple of weeks. It involves clicking a button, and reading a line of text.

3. They started reductions just before the start of the last tax year (January 2009) so that they could get past March 2009 without being noticed

- Not at all

4. They believe that, even with all my direct contact details and email address (emails are the CHEAPEST form of direct communication), putting a few adverts in the press and having changed the rates in their premises that they have done enough (whilst recognising that both footfall and press readership is at an all-time low)

- They have to put adverts. It's the rules. They do not have to inform you by email.

5. They created a 'new' account they didn't promote to existing savers called 'e-Savings Plus' which is exactly what e-Savings was, so the few that did notice, could move accounts internally

- Banks have done it for years. They aren't the only ones. Egg Cash ISA, Egg Cash ISA 2 for example.

6. They deliberately don't publish the interest rates on the e-Savings accounts when you login to your account (which they do for other accounts)

- As with all banks.

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Nationwide aren't the only ones. Almost all banks / BS do this.

debbie42

There have been an awful lot of these posts lately!

Andystriker

All Banks and Building Societies are the same. While I agree with your points, moving your business elsewhere won't solve your problem long term unless you fix.

Today savers have to take the responsibility themselves to ensure they are getting the best possible return on their savings.

Complain to them, but it will not do you any good.

Put bluntly, If you are not happy with the rate they pay, the onus is on you, not them, to do something about it, and the only thing you can do is play the system and move when the rate drops.

John_M_Business

Why is it, then, that Banks and Building Societies have to put APR / Interest Rates on their advertising but then can change whenever they feel like it without informing their customers?

Surely the legislation has just not caught up with them if it thinks that a few adverts is enough? Perhaps we should seek to change legislation in these ways:
- Whether offline or online, banks need to publish both Gross and Net interest rates wherever they user is viewing any representation of balance on a specific account
- Whenever a change in rate occurs, then they also need to communicate both by post and by email that this has occurred. Stating the old rate, the new rate, and when it comes into effect
Whilst I recognise that I have not recompense for their shady activities, it should be their duty to inform (as some banks do!) us of changes otherwise it's another means of conning customers.

And Lokolo, just wondered whether you work for a Bank PR Department? What is legally permitted is not always what is morally acceptable.

Finally, I don't suppose you really considered the 'mutual' aspect of Nationwide. They are supposed to, unlike banks, be putting my needs first. Sadly, they are behaving just like banks.

Lokolo

John_M_Business wrote: »

Why is it, then, that Banks and Building Societies have to put APR / Interest Rates on their advertising but then can change whenever they feel like it without informing their customers?

Surely the legislation has just not caught up with them if it thinks that a few adverts is enough? Perhaps we should seek to change legislation in these ways:
- Whether offline or online, banks need to publish both Gross and Net interest rates wherever they user is viewing any representation of balance on a specific account
- Whenever a change in rate occurs, then they also need to communicate both by post and by email that this has occurred. Stating the old rate, the new rate, and when it comes into effect
Whilst I recognise that I have not recompense for their shady activities, it should be their duty to inform (as some banks do!) us of changes otherwise it's another means of conning customers.

And Lokolo, just wondered whether you work for a Bank PR Department? What is legally permitted is not always what is morally acceptable.

You're kidding right?

As I said, if you don't like the (variable) bit when stating interest rates, change to a fix rate.

John_M_Business

Lokolo wrote: »

You're kidding right?

As I said, if you don't like the (variable) bit when stating interest rates, change to a fix rate.

Not so easy on savings accounts as the best fixed rates are usually bonused and so you know that within 12 months you'll have to move again and again... furthermore, if interest rates rise, then you've got a second problem.

The problem is that I don't have the time to spend days squeezing the extra 0.005% out of a savings account. I just want one that pays fairly and reasonably, which don't do the kinds of tricks that Nationwide have pulled on me. Is that so hard?

For some who has the time to post thousands of times on MSE - you probably don't have the same time pressures as I do and therefore are unsympathetic in your response. Others may understand the time challenges faced!

tomthered

I agree totally with you John, I have just checked my esavings to find it is derisory. I have decided to move my money like you. I thought a mutual like Nationwide would be reasonable, not so!! They have to find the Cheif Execs pay rise from somewhere and its the mugs who pay.

Mickygg

I posted a similar post a while ago about interest rates falling, and unfortunately you will get people on here that are not sympathetic.

I for one agree with you John M Business. I was not in a position as bad as you, but I had an ISA with Nationwide, and realised late in the day that the rate had gone down to 0.5%. As said above this is not just Nationwide doing this, it is all banks and BS's. They unfortunately do not need to let you know individually what their rates are doing.

You have a lot of people on here immediately point you to base rates only being 0.5%, which is only partly true - as the savings rates provided are not purely down to this - other factors include the libor rate, loan lending rates to customers, existing levels of savings banks have to lend etc. I for one feel if banks and BS's SVR and loan/lending rates are still high (way higher than base rates) then existing savings rates should not have plumeted for existing customers to near zero % levels.

If you can bear to stick with Nationwide (I did) I would suggest moving to some fix rate products if possible. Nationwide on these do let you know before maturity what your options are moving forward.

As I found out the hard way, even though its not always possible, we are in times where we have to keep moving savings to gain some form of interest. However as I said, if you can use fixed rates with Nationwide. Interest rates could rise, but at least this way you can keep more on top of things and by fixing for 2,3 years you wont have to keep moving every 6 months or year.

molerat

John_M_Business wrote: »

Not so easy on savings accounts as the best fixed rates are usually bonused and so you know that within 12 months you'll have to move again and again... furthermore, if interest rates rise, then you've got a second problem.

The problem is that I don't have the time to spend days squeezing the extra 0.005% out of a savings account. I just want one that pays fairly and reasonably, which don't do the kinds of tricks that Nationwide have pulled on me. Is that so hard?

For some who has the time to post thousands of times on MSE - you probably don't have the same time pressures as I do and therefore are unsympathetic in your response. Others may understand the time challenges faced!

If you don't notice the rates going down then you won't notice them going up either. If you fix at least you know what you are getting.

It doesn't take "days squeezing the extra 0.005%". A few minutes a week browsing around here will usually get you all you need to know.

bryanb

There is an account around that pays the average of the 5 best High st rates, it's not difficult to find.