MSE News: Savers' compensation hope after Santander bond defeat

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Savers not warned when their rate is due to dive following the end of a fixed term could be due compensation ..."

Read the full story:
Savers' compensation hope after Santander bond defeat

plunt

no surprise here, yet another mess up by santander! imagine if they spent their money on training and customer service rather than building sneaky rates and clauses

jimjames

Slightly misleading title I feel.

The story seems to be that compensation is due not directly as a result of the rate dropping but that it was rolled into a low paying product and locked in for another year preventing access to a better rate.

With normal accounts having bonus rates that drop after a period of time there is an element of personal responsibility to check the rate you are being paid. This case is slightly different as the bank appear have tied you in although the article then says this was a mistake by the staff (no surprise there when its Santander!)

Consumerist

Automatically rolling a maturing bond into a fixed-term account is nothing less than a calculated and deliberate trap.

This tells me all I need to know about Santander's ethics from the very top of the bank.

hermante

I don't know about this one, firstly, a senior legal figure can't keep track of his own money?

I had a similar bond and was told that if I did not give instructions for maturity, it would be placed into a "1 year fixed bond" which could be closed at any time, so only fixed in the sense of no money in or out. I did actually get a letter about this, but if the complainant did not receive a letter then I guess incompetent staff might have read the word "fixed" and misinformed him.

grumbler

Santander says it always sends such warnings, adding it can trace the letter in this case. However, it could not prove to the Ombudsman it actually sent the letter.

So, do banks have to start sending letters by recorded signed for mail then? RM will be happy.

Eve_Markey

Surprise surprise. I had a fixed bond with Santander and was told about its maturity AFTER it had matured. Fortunately I am a 'rate tart' and had already set in motion what I was going to be doing with the funds that became available.

Consumerist

grumbler wrote: »

So, do banks have to start sending letters by recorded signed for mail then? RM will be happy.

Perhaps the Ombudsman is trying to discourage the practice of these automatic roll-overs into fixed-term accounts entirely. I sincerely hope so; their only purpose is to deliberately catch people out. It's about time life was made as difficult as possible for banks who deliberately intend to lay traps for its customers.

ses6jwg

Santander DO NOT automatically roll maturing fixed rate bonds into another "sticky" bond if you do not provide instructions.

If you do not provide instructions to Santander up to 30 days BEFORE the bond matures, it is automatically placed into a "Fixed Rate Reward Bond" which pays 1 % plus an additional bonus on 12 month maturity, usually around 1.5 - 1.75% depending on balance. The FRRB can be closed at ANY time during the 12 months but the customer will only earn 1% if closed before 12 months is up.

What this means, is that if a customer forgets about their bond and it is left for another year, it will still earn a nominal rate of interest of 2.5-2.75%.

Most banks will simply let the account default into an easy access account paying 0.5% or less and that's where it stays.

I know for a FACT that they inform customers when a bond is maturing because I see customers coming in with the letters! It may have been a case that the letter was simply lost in the system as they are not send recorded or anything like that.

It sounds to me like the customer in this instance recieved incorrect information however from a member of staff in that the bond could not be closed early.

Consumerist

ses6jwg wrote: »

Santander DO NOT automatically roll maturing fixed rate bonds into another "sticky" bond if you do not provide instructions. . . It sounds to me like the customer in this instance recieved incorrect information however from a member of staff in that the bond could not be closed early.

Failure to properly train staff does not excuse Santander from its responsibilities. If a customer is incorrectly advised by Santander staff then Santander should take full responsibility for its failure without there being a need to involve the Ombudsman at all.

It seems to me that when the formal complaint was raised, Santander had no intention of taking responsibility for incorrect information given out by its staff but preferred instead to rely on sending a letter as a substitute for proper training.

As far as I am concerned, Santander got somewhat less than it really deserved but I doubt whether they will have learnt anything positive from the experience.

Jarlawuk

Santander's 2.75% bond is an open ended access bond which is used when clients who don't provide instructions on what they want to do with their bond.

In this instance it is clear that the staff member did not know what they were talking about and failed to deal with the issue properly.

I know that all clients get letters sent from head office 30 days prior to maturity, they also get phone calls to invite them into their local branch to discuss the options available to them.

Disclaimer: I work for Santander so I am commenting based on my experience of what I have to do every month.