Santander First Home Saver - final response to complaint over interest calculation

7sefton

I've just received Santander's 'final response' to an ongoing complaint I had with them over how they calculate the interest on my First Home Saver account (which is now a closed issue).

I opened the account with £5000 at the end of April 2010, and have made £300 deposits monthly by standing order from the beginning of every month since (sometimes on 1st, sometimes as late as 4th depending on weekends etc).

My complaint centred on the fact that every time I spoke to a member of staff about the terms & conditions on this account I was told something completely different: one day I was told the payments had to be made between a certain window in a month, others told me it was simply required in a calendar month. Branch staff couldn't supply me with a detailed month-by-month breakdown, so I complained.

Their final response has left me even more confused and angry. The letter opens with generic waffle about how important customer service is at Santander (yeah right). Then they say if I want a monthly breakdown I have to visit a branch and pay them £10 for the privilege of checking they have done their sums right after confusing me so much. But the bit that really gets me is this:

"It may help if I explain that you are only allowed one payment per month into the account. Our records show that your account was opened on 21 April 2010, therefore, your payment may be made into your account from 21 of one month of the 20 of the following month."

!!! Although far from clear, this seems to suggest that it isn't calendar month that matters, but the month from the day the account is opened. This is in conflict to the previous response from the complaints team (which said calendar month). I made my first deposit of £300 on 1 May 2010 to maximise the interest, but now it appears this was against the rules and affected my interest calculation. To make matters worse I can't check this for myself without paying £10 to Santander!

Please, does anyone have any advice (or personal experience) about this matter because it is driving me mad.

curly_cabbage

Call their customer complaints direct No. 01908 375039, don't give up if they have !!!! up they need to compensate you. If they arn't intrested go to the finacial onbadsman with as much info as possible regarding dates and time's of call's and who you spoke to if possible. Good luck

CC

spikyone

Have they actually made a mistake with your interest payments? You should be able to calculate this quickly, if you think they have made a mistake. Bear in mind that interest is paid annually, and that you won't get 5% gross on the entire balance at that point. It will be roughly 5% gross on the average balance over the year - something like £340 pre-tax interest based on £5k initial deposit followed by monthly £300 contributions, which is £272 net interest if you're a standard rate taxpayer.

If they have made a mistake, you will need to start a new complaint about this. Your original complaint seems to be that their customer service isn't very good and they're a bit confused, which isn't really a reason for the FOS to intervene as it hasn't cost you anything. Please correct me if I've misunderstood though!
I would disagree with curly cabbage though - if this does need to go to the FOS at some point, you'd be far better keeping all correspondence in writing.

7sefton

spikyone wrote: »

Have they actually made a mistake with your interest payments? You should be able to calculate this quickly, if you think they have made a mistake. Bear in mind that interest is paid annually, and that you won't get 5% gross on the entire balance at that point. It will be roughly 5% gross on the average balance over the year - something like £340 pre-tax interest based on £5k initial deposit followed by monthly £300 contributions, which is £272 net interest if you're a standard rate taxpayer.

If they have made a mistake, you will need to start a new complaint about this. Your original complaint seems to be that their customer service isn't very good and they're a bit confused, which isn't really a reason for the FOS to intervene as it hasn't cost you anything. Please correct me if I've misunderstood though!
I would disagree with curly cabbage though - if this does need to go to the FOS at some point, you'd be far better keeping all correspondence in writing.

Like you say, I'm deeply unhappy with Santander's level of service (including how the handle complaints) but my main concern is that I've been paid the correct amount of interest over a year.

Just checked my annual statement from April 2011:

On 21 April 2010 I paid £5000 into the new account. Then, starting on 4th May and then every month after that (give or take a few days for non-working days) I paid £300 in by standing order. My net interest paid on 22 April 2011 was £271.86: does this sound correct, as if I have been paid the full 5% gross over the entire year?

If so, at least my mind is at rest. Shame Santander couldn't do the same after numerous branch visits and letters...

7sefton

Thanks for that,

Looks like I should be owed 278.40 but Santander only paid £271.86 (used the FT calculator with a £5000 lump sum then monthly payments of £300 at 5% minus basic tax)... unless I've missed something?

ses6jwg

Was the £5000 lump sum paid in as a transfer, cash or cheque?

The T&Cs definitely stated payment had to be made to the account between the 2nd and the 21st of every month.

*cassius*

my 1 year anniversary is in october 2011 so ill be keeping an eye on what interest is paid, ive done the same amounts with maximum deposit and monthy £300 maximum so it should be around the £270 mark, ill just wait and see what gets paid in.

7sefton

ses6jwg wrote: »

Was the £5000 lump sum paid in as a transfer, cash or cheque?

The T&Cs definitely stated payment had to be made to the account between the 2nd and the 21st of every month.

This was exactly what my complaint was about: nowhere on the information I was given when I opened the account does it state this 2nd-21st rule, nor is on the specific terms and conditions of their website. It's only MSE forum users and the odd Santander staff member who have mentioned this. Even more confusingly, the complaints office have told me further conflicting advice: the first response says just calendar month, the final response says it is an 'account month' (i.e. from the date you open the account to the next).

And my initial deposit was by cheque.

Please, can anyone advise me for sure if I've been paid correct interest?

Hasty1991

It seems pretty much about right to me.

Rough calculations for a 12 month time period - first month at £5000 and subsequent months increasing by £300 - my rough estimate £342.71 gross - £274.17 net.

ses6jwg

If your initial deposit was by cheque, there would have been a few days where the money would not have been earning interest. You need to factor this in as well.

It seems to me a hell of a lot of hassle and time bothering to chase up what you believe to be 3 or 4 pounds.

spikyone

ses6jwg wrote: »

If your initial deposit was by cheque, there would have been a few days where the money would not have been earning interest. You need to factor this in as well.

It seems to me a hell of a lot of hassle and time bothering to chase up what you believe to be 3 or 4 pounds.

Given that the "penalty" for not paying in at the right time is that they pay you naff-all interest for that month, it would lose the OP much more than 3 or 4 pounds. In the first month, a rough-and-ready £16-£17 if you get the dates wrong. The amounts sound right, and very similar to everyone's ball-park calculations - mine were pretty crude too...

The OP also says deposits were made "give or take" a few days, so this is likely to have had an effect. So, bad service but nothing the FOS will be too interested in.