Direct debit to qualify for Santander 123 Current Account INTEREST?

Rodders289

Yes I agree will probably not be compensated. I just set up the 2 direct debits and thought no more about them.


To anyone out there who are setting up new direct debits, ensure that you check with your online banking that they are showing, if not there is a problem and you will not be paid your interest

Rodders289

Well I contacted the Council Tax people who refused to compensate me stating that they sent the paperwork to Santander the next day in February. I contacted Santander and complained stating that they had been informed of my direct debit but had not set it up. Result is I was contacted today by Santander to say that they cannot find any paperwork from the council tax people but as a goodwill gesture have calculated my lost interest and are paying me it. :-)

OPENSPACES

I have just had three successful complaints to Santander about opening a 123 account. Firstly not all their links on their web page mentioned the need for deposits from an external bank. This lost me a months interest. They agreed to put this right and gave me £50.
I then complained that it appeared that when you came to change your tax status you could not change individuals something they claimed you could. Eventually they told me that each party could do it by going in under their own customer ID number. When I complained this was not explained on the web site they admitted it needed changing and gave me £35. This morning I enquired about the direct debit issue. they replied by telling me the DD s which qualified for cash back. I hit the roof gave them both barrels and they came back saying categorically that any old DD qualifies. They gave me nothing except apologies. I have now referred matters to the FCA. They still cant tell me why the need for the monthly deposits or DDs are needed at all for interest seeking depositers. Any ideas (money laundering?) . Santander's marketing and customer service are crap

colsten

OPENSPACES wrote: »

This morning I enquired about the direct debit issue. they replied by telling me the DD s which qualified for cash back. I hit the roof gave them both barrels and they came back saying categorically that any old DD qualifies. They gave me nothing except apologies. I have now referred matters to the FCA. They still cant tell why the need for the monthly deposits or DDs exist at all. Any ideas (money laundering?) . Santander's marketing and customer service are crap

How confusing. What direct debit issue did you enquire about? Why do you require an explanation why there is a need for the monthly deposits or DDs - they can make the rules and they do not have to justify them to anyone. (Hint: to earn interest, you need both, monthly deposits and DDs (which don't need to pay monthly). See the T&Cs.). If you find their T&Cs not acceptable, you have the choice of several other current accounts. Though you might find the T&Cs of those also unacceptable since many stipulate conditions without giving a reason for the conditions.

What have you referred to the FCA, and how?

OPENSPACES wrote: »

Santander's marketing and customer service are crap

Does that include the customer service that just paid you £85?

YorkshireBoy

colsten wrote: »

What have you referred to the FCA, and how?

On a positive note, at least this complaint won't affect the workload of the FOS.

eskbanker

I think it's fair to say that their marketing is largely targeted at those for whom open spaces doesn't refer to the bit between left ear and right ear and who can read Ts & Cs!

OPENSPACES

You ask why I need to know why qualifying criteria are stipulated? I am a retired gentleman who with my wife have three accounts one in her name one in mine and a joint. My pension comes into my account, I transfer money to her and our joint account pays the bills on which I have 10 direct debits. As that stands I can open three 123 accounts but none of them qualify as none of them meet all the criteria. I ring up and say look I want to invest £60K with can you make a commercial decision. No they said you must move your DD from accounts A to B and C and you must pay in money from an external source into your non pension accounts. So I ask what is the marketing need for insisting on the criteria bearing in mind that they should be a customer led business. They are unable to say why the criteria exist. As regards the direct debit bit the T and Cs state absolutely nothing so there is no reason for needing them. If you ring up their helpline you will get different responses. Surely the main aim of any bank is to borrow money off you as cheaply and efficiently as possible. In my opinion Santander could make it much more customer friendly. As regards them paying you money that seems the norm now and an excuse not to continue the discussion. I gave up yesterday trying to open an Internet bank account with Tescos after an hour as their web site was so slow. The next day they rang up and gave me £25. Going back to Santander in each of my three complaints they have agreed to change their web site so I have no problems with what's between my ears

eskbanker

OPENSPACES wrote: »

As regards the direct debit bit the T and Cs state absolutely nothing so there is no reason for needing them.

The published Ts & Cs clearly state that two DDs are needed on each account in order to qualify for interest (and they have no obligation to explain themselves any further than that).
You asked them to bend these rules on the basis that you're putting £60K their way.
They say no, we'll still to our published Ts & Cs.
What do you think the FOS are going to say or do?!

OPENSPACES wrote: »

Going back to Santander in each of my three complaints they have agreed to change their web site

It's still not clear to me exactly how you believe their website is deficient regarding the DD and monthly funding requirements?

Archi_Bald

OPENSPACES wrote: »

You ask why I need to know why qualifying criteria are stipulated? I am a retired gentleman who with my wife have three accounts one in her name one in mine and a joint. My pension comes into my account, I transfer money to her and our joint account pays the bills on which I have 10 direct debits. As that stands I can open three 123 accounts but none of them qualify as none of them meet all the criteria.

it is dead straight forward to satisfy the monthly deposit, and also the DD requirements, of several Santander 123 accounts in the same name. I know this for certain because I have been doing it for a few years now. If you spend a little time on this forum, you will see that many people have solved the problem with the help of a couple of Tesco savings accounts

OPENSPACES wrote: »

So I ask what is the marketing need for insisting on the criteria bearing in mind that they should be a customer led business. They are unable to say why the criteria exist.

Like any other business, they exist for the benefit of the shareholders. To make the most for their shareholders, they need a lot of profitable customers. People who just use current accounts as savings accounts are not profitable customers, so it is unsurprising that they are not directly inviting people to (ab-)use their current account offerings. Nonetheless, many people have found it very easy to get interest from multiple 123 current accounts. Which is one of the reasons why there is now a limit on how many 123 accounts an individual can have.

Their conditions for receiving interest on the 123 account have most likely nothing at all to do with marketing but much more likely they don't want people to use their current accounts as savings accounts.

As has already been mentioned, they do not need to explain the conditions of their T&Cs to anyone (as long as they remain within the law and their licence terms, obviously). Take them as they are or leave them. Though, as per above, it is dead easy to comply with the terms, and to make interest as well as cashback from the 123s.

OPENSPACES wrote: »

As regards the direct debit bit the T and Cs state absolutely nothing

Not sure what you mean. The T&Cs cannot be any clearer about what is needed to earn interest, and DDs are part of it.

OPENSPACES wrote: »

If you ring up their helpline you will get different responses.

may be you are asking different questions? I'd love to hear the recordings of your calls.

OPENSPACES wrote: »

Surely the main aim of any bank is to borrow money off you as cheaply and efficiently as possible.

They are borrowing money as cheaply and efficiently as possible, and the way to do it has been, for a number of years now, not to borrow any significant amounts from retail customers like you and I. Google Funding For Lending, and/or put your money into one of the many 'proper' savings accounts that don't require DDs and minimum monthly deposits. You have plenty of choices.

OPENSPACES wrote: »

Going back to Santander in each of my three complaints they have agreed to change their web site so I have no problems with what's between my ears

I am sorry to say this, but very often it is a lot cheaper for a company just give a customer a few tenners in full and final settlement of their complaint rather than spending hours trying to talk sense into the customer.

OPENSPACES wrote: »

I gave up yesterday trying to open an Internet bank account with Tescos after an hour as their web site was so slow. The next day they rang up and gave me £25.

So were you after £25, or after some bank accounts? It's a bit telling that you brag about the £25 but say nothing more about your application. Suffice to say, there are quite a few people on here who have had a couple of Tesco current accounts since middle of June, and they will soon have paid more than the £25 you say you got.

Bottom line is that you could have avoided all that upset, and happily made interest from your accounts, if you had come on here and looked up what other people do with multiple 123s (and current accounts from other banks). But seeing you are now targeting Tesco's failure to meet your expectations, perhaps you'd rather make a quick buck from complaining.

YorkshireBoy

OPENSPACES...the way it works is this:

Santander lose money on every 1-2-3 account they open. Why?...well to put things very simply (no offence!), and using your own figures, they're paying out 3% AER (on £20K that's as near as dammit £600) to borrow your £20K. Now I don't know if you've been following current affairs for the last 6 years or so(?), but we've had somewhat of a meltdown in the banking sector and the Government has introduced various measures to facilitate funding for the banks. One of these measures was very cheap borrowing from central funds. I don't know the exact rate, but if I was to hazard a guess I'd say the banks can borrow at less than 1% (if not now, then certainly at some point, and for an extended period, within those last 6 years). Now it doesn't take a rocket scientist (no offence!) to work out that, as I opened with above, Santander are losing money on every 1-2-3 account they open.

With me so far?

Yes you pay them £24 per year in account fees...but then they pay you a lot of money for paying qualifying DDs such as utilities, council tax, etc. This cashback, in almost all cases, exceeds the £2 per month fee (maybe 3 to 4 times the fee actually?), so it's a double whammy for Santander...they're paying more for their funds than they have to, and paying out more in cashback than they make in monthly fees.

So why do they do it?...Well someone who receives an income (in excess of £500) in to, and pays their bills out of, an account is seen as a 'main account' customer. Main account customers are good prospects for loan, mortgage, insurance, credit card, savings, and investment sales opportunities...which is where they do make a lot of money.

The reason they offer just one sole account and one joint account each is that such an arrangement will satisfy most households, ie each has their own account (receiving income and paying personal bills such as mobile phone contracts, spectacles, dental, transport, etc, and covering personal spending. Then they have one joint account for the household bills.

Does that help go some way towards explaining why they do what they do?