Can Nationwide Building Society Get Away With This?

John_M_Business

Paul_Herring wrote: »

Imagine if all the time spend reading and responding to replies on this thread were spent on researching decent savings, maybe once or twice a year?

You're right... I'm off to find others who think that what I am suggesting is a good idea in terms of calling the banks to be more transparent about rate changes.

Call me old fashioned, but isn't this what they used to do? And isn't this a sensible suggestion?

Lokolo

John_M_Business wrote: »

You're right... I'm off to find others who think that what I am suggesting is a good idea in terms of calling the banks to be more transparent about rate changes.

Call me old fashioned, but isn't this what they used to do? And isn't this a sensible suggestion?

Not from a business point of view for them.

The number of customers that do not notice it and keep money with very little interest, outweighs those that do. So from a business point of viewing, they are getting cheaper money, which they can then lend out to more customers, meaning more profit.

John_M_Business

Lokolo wrote: »

Not from a business point of view for them.

The number of customers that do not notice it and keep money with very little interest, outweighs those that do. So from a business point of viewing, they are getting cheaper money, which they can then lend out to more customers, meaning more profit.

Which is why we need to put this on the radar. Because only legislation will make banks and building societies change for that matter. And whilst I don't know for sure, if your assertion is right, there are loads of people being conned out of their due interest and savings.

And the timing is good - if the banking system is going to be under review, then all the better to get this headlined. Letters to MPs... and so on.

How do you think the bank charges were refunded? By people just saying 'er... that's what banks do!' It was sites like MSE (and people like Martin for that matter) who said 'this needs to change and the banks ain't going to do the changing'.

A website I run displays APRs alongside offers, with a full breakdown of the financing costs and charges. Why? Because it's easier to do it? No, not at all, because the FSA will call us to account if we don't.

I still think it's the right thing to do, but it's a pain to manage!!

Stompa

John_M_Business wrote: »

You're right... I'm off to find others who think that what I am suggesting is a good idea in terms of calling the banks to be more transparent about rate changes.

Call me old fashioned, but isn't this what they used to do? And isn't this a sensible suggestion?

I agree entirely with your suggestion, but it's not a new one, if you search the archives you'll find numerous posts where the same idea has been proposed. But most of us are aware that it currently doesn't work that way, so the onus is on the account holder to check the rates for themselves.

Sceptic001

Am I mistaken in thinking that banks are now required to notify customers when they cut rates under the new Payment Services Directive? I have recently received notice from both Sainsbury's and M&S about rate cuts.

Can someone clarify what the banks are now required to do when they change interest rates on variable accounts?

dzug1

John_M_Business wrote: »

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?
!

I suspect the way the current market works yes it is.

Banks that do it will still lose rate tarts to higher paying organisations and will be paying over the odds to those who for whatever reason don't shift.

John_M_Business

Sceptic001 wrote: »

Am I mistaken in thinking that banks are now required to notify customers when they cut rates under the new Payment Services Directive? I have recently received notice from both Sainsbury's and M&S about rate cuts.

Can someone clarify what the banks are now required to do when they change interest rates on variable accounts?

AFAIK and what Nationwide said to me, all they need to do is to change the smallprint of posters in their branches (and on the external pages of their websites) and occasionally advertise their rates in a certain number of newspapers.

Given they have all customers' home addresses and almost all customers' email addresses, they are perfectly equipped to communicate directly. But they didn't to me and indicated that they are not obliged to do so.

Sceptic001

John_M_Business wrote: »

AFAIK and what Nationwide said to me, all they need to do is to change the smallprint of posters in their branches (and on the external pages of their websites) and occasionally advertise their rates in a certain number of newspapers.

Given they have all customers' home addresses and almost all customers' email addresses, they are perfectly equipped to communicate directly. But they didn't to me and indicated that they are not obliged to do so.

Ah, it seems I have been under a misapprehension. So the answer would seem to be to boycott institutions such as Nationwide which refuse to notify savers personally:

27. Unless the account has a fixed interest rate, we may vary interest rates. We will only vary the rate for one or more of the following reasons:
i. To reflect changes in general interest rates, including the interest rates or terms on which similar accounts are offered by other providers of financial services;
ii. To reflect any changes or anticipated changes in the law, regulations or codes of practice or to respond to a decision by a court, ombudsman or regulator;
iii. To respond to changes in the rates applying to our mortgage business;
iv. To reflect changes to our costs, including administrative costs, costs involved in providing services or facilities or changes in the costs to us of borrowing funds;
v. To maintain our financial strength for the benefit of our members.
28. If we vary the rate for one of these reasons, we will tell you about it by putting a notice in our branches and/or on our website or an advertisement in the press. If we vary the rate for any other reason we will notify you personally at least 30 days in advance and ignore any notice period on your account for at least 60 days starting on the date of the notice to allow you to close or switch the account without loss of interest.

in favour of others (such as M&S) which do:

20.1. We may change interest rates applied to money you
have with us in your Account in the following ways:
20.1.1. if the change is favourable to you, by, within 30 days of
the change, telling you about it personally; and
20.1.2. if the change is not favourable to you, by telling you
about it personally at least two months in advance of
making the change.

EarthBoy

John_M_Business wrote: »

They made the same changes to the eSavings account. And withdrawals were different to internal transfers so as long as you have a linked current account... then you could still manage the cash easily.

They haven't made any changes to the E-savings account apart from reducing the interest rate to very little. It never had any special conditions attached to it. Also, withdrawals are not different to internal transfers at all; they are exactly the same thing. You need a Flexaccount in order to have both the E-savings and E-savings Plus, and the only way you can withdraw money from either account is to transfer it to your Flexaccount. This has always been the case for these accounts.

hugheskevi

FWIW it's precisely because of what they've done that I am not staying with e-Savings Plus.

If you have already moved money into E-Saving Plus and intend to take it out and close the account, then you may want to be aware of the account terms and conditions:

Up to 3 free instant access withdrawals each year. Lower rates apply to customers making 4 or more withdrawals or closing the account. The lower interest rate will apply for the full 12 months following opening or anniversary of opening. Funds can only be transferred online from e-Savings Plus to a FlexAccount on the Internet Bank.

Incidentally, banks are far from the only companies indulging in this behaviour with savings accounts.

All of the following are likely to cost considerably more if you do not monitor them and change account/supplier at least annually:

• gas
• electricity
• home insurance
• contents insurance
• vehicle insurance
• mobile 'phone tariff
• and possibly pension fund, credit card and mortgage provider

Personally I decided years ago that I could complain about how bad the various systems are, or just accept that is the way of things, and do as Lokolo suggests