West Bromwich Building Society

aw42

Opened a fixed term bond with West Brom in 2009 and in 2010 they offered a very competitive rate for a further 1 year renewal but changed the bond to an automatic rollover into a similar bond on maturity. I did not receive any correspondence from them until I received a notice of automatic renewal some 18 days after maturity. The interest rate payable had been reduced from 3.35% to 2.05% although they were offering 3.05% on an e-saver instant access account. I immediately asked to have my bond repaid but they have refused as they say I was informed some 2 weeks before maturity of the revised terms. Similar investment with the Post Office matured around the same time and offered a rate of 3.41%. Needless to say I received their correspondence and responded immediately. This rollover bond is solely for the benefit of the Society so be careful if you have this type of investment with this Society.

Ifts

2.05% for a year is about 1.5% below whats currently available for a 1 year fixed term bond. But 2.05% is what West Brom are offering on their 1 year fixed rate bond to new customers on their website.

If you had found out what rate you were going to receive on the rollover bond in the first 14 days, (T&Cs from West Brom website) you could have cancelled:

Cancellation period

Except in the case of fixed rate bonds opened in a branch, if you decide within 14 days of opening your account that you wish to change your mind, you can do so without incurring any charge. You may transfer to another account or close it.

but like you said unfortunately you did not receive any correspondence from them until you received a notice of automatic renewal some 18 days after maturity.

Depending on the amount of money you have in the bond, if it was a large amount then put in an official complaint to WB (explaining you could not cancel within 14 days as you didn't receive any communication from them until some 18 days had passed), and then if you don't get a satisfactory response from WB maybe take it up with the FOS.

Automatic rollover into a similar bond on maturity is OK only if you remember to check what rate it will rollover to before maturity, and if you don't like it you can ask to have your funds returned.

Christmas57

The same thing has just happened to me. I did not get a letter telling me of my maturity options. The first I know about it was when I rec a certificate for a 2 year fixed bond at a rate of 2.15%. Ihave found a rate of 3.5% today. I rang West Brom who were not very helpful. R they within their rights to do this.

premierfella

There is an obvious flaw here in the automatic renewal system.

Just to balance things a little and support the theory that West Brom do indeed send out communications prior to maturity of accounts (which presumably get lost in the post!) my Fixed Rate Regular Saver matured a couple of days ago. I received the maturity mailing a few weeks ago advising me of my options and where the funds would default to. I sent back my instruction to withdraw the funds by faster payment on maturity and (whilst I did not get the promised text message confirming that they received the instruction) the funds were in my current account as expected yesterday.

Chadsman

premierfella wrote: »

I sent back my instruction to withdraw the funds by faster payment on maturity

Was there a charge for sending the Faster Payment?
:beer:

notbritishgas

Also to confirm that West Brom do send out notification.
My 1 year bond matures on 30 June and I received my option letter during this last week.

The bond reinvest options were so small (just over 2%) that they cannot think anyone would take them up on the offer.

Like a previous poster I have already let them know I wish to withdraw on maturity, this wil be done by BACS, whether it will be by faster payment who knows.

opinions4u

Do people not use diaries these days?

I've got numerous electronic devices that I could get to remind me to act ahead of a term deposit maturity. Stick it in your iTabMobile or whatever it's called.

Don't rely on your postman!

oldvicar

The practise of locking people in for a further term with no way out is reprehensible.

The government have acted to stop this practise with annual telephone contracts. The same needs to be done for savings accounts/bonds.

I have no qualms that these bonds may roll-over into accounts paying inferior rates of interest. But unless savers have actively opted for a new bond then they should have access to their funds after maturity - but IMO a penalty of up to all the interest paid since maturity would be reasonable.

Time for MSE to campaign for government/regulator to act. Or maybe a test case for 'unfair terms' legislation?

In the meantime savers should do the sensible thing and only choose term accounts from providers which give some sort of break clause (which may be OK even if onerous) from the outset.

opinions4u

oldvicar wrote: »

The practise of locking people in for a further term with no way out is reprehensible.

The government have acted to stop this practise with annual telephone contracts. The same needs to be done for savings accounts/bonds.

I have no qualms that these bonds may roll-over into accounts paying inferior rates of interest. But unless savers have actively opted for a new bond then they should have access to their funds after maturity - but IMO a penalty of up to all the interest paid since maturity would be reasonable.

Time for MSE to campaign for government/regulator to act. Or maybe a test case for 'unfair terms' legislation?

In the meantime savers should do the sensible thing and only choose term accounts from providers which give some sort of break clause (which may be OK even if onerous) from the outset.

While I think I agree with your sentiment in the main, perhaps the concept of sticking the funds in to a holding account paying 0.1% is an equally poor alternative.

Cheltenham and Gloucester use auto rollover. But they have four things in their favour.

1) they write a month before maturity

2) they write within 14 days of maturity to say they've done it

3) they allow you to back out without penalty and with full payment of interest within 30 days of the rollover.

4) they allow you to back out after this date subject to a charge of (I think) 120 days interest.

Customers should do their homework and use their diaries. Maturity processes do differ between providers and the Post Office or email spam filters are not always reliable!

steady__eddie

"The same thing has just happened to me." Snap, although I do keep an electronic diary thingy and posted on here (sticky regsave thread) to remind folks who may have had a 4.1% regsave that it would be maturing shortly and that the rollover options were carp. A fellow MSEer closed their a/c on maturity only to receive a letter from WBBS upon return from the branch which said that they had granted an additional 14 days at 4.1% before miskey mouse rates kicked in

oldvicar

opinions4u wrote: »

While I think I agree with your sentiment in the main, perhaps the concept of sticking the funds in to a holding account paying 0.1% is an equally poor alternative.

Cheltenham and Gloucester use auto rollover. But they have four things in their favour.

1) they write a month before maturity

2) they write within 14 days of maturity to say they've done it

3) they allow you to back out without penalty and with full payment of interest within 30 days of the rollover.

4) they allow you to back out after this date subject to a charge of (I think) 120 days interest.

Customers should do their homework and use their diaries. Maturity processes do differ between providers and the Post Office or email spam filters are not always reliable!

C&G seem to offer a reasonable / fair set of options.

Of course la creme de la creme (or Rolls Royce if you prefer English) for looking after customers and treating them (more than) fairly is good old NS&I. They auto roll-over savings certificates to the best of either the rates when they write before maturity, or to those on the day of maturity if better. Then they provide immediate no-penalty access, and all the interest benefits accrued on a monthly basis (whereas new customers effectively have a penalty during the first year). Sadly they aren't taking on new customers at the moment.

Generally though people need to look at all the differences between accounts when taking them out. Mid term access and what happens at maturity are clearly important. Its not as simple as just choosing the highest AER or top of the 'best buy' table..