Can the Halifax do this?

Mullington

My mother received a letter today advising her that her tracker bond taken out in June 2013 at 1.7% AER/Gross was wrong and that they had sent the wrong Certificate of Investment.

Today they have sent her a duplicate Certificate Of Investment which advises that the AER/Gross interest rate will now be 1.19%

How can this be so? She took out the product because 1.7% was attractive to her at the time and the bank base rate which the tracker is linked to has remained constant at 0.5%.

I have attached a link to the letters. How do we stand with this and what action should we take please?

https://drive.google.com/folderview?id=0B3cFkgG08MhqdmY3blIwNGtSeG8&usp=sharing

YorkshireBoy

http://www.halifax.co.uk/contactus/how-to-complain/

opinions4u

No, they can't reduce your rate unless the BofE rate also reduces.

This looks like a minor technical error being corrected and made even worse.

Follow Yorkshire Boy's link and complain.

I suspect you'll be getting a gross rate of 0.50% plus 1.19% = 1.69% (which equates to an AER of 1.70%). It's just the letter doesn't say this.

Moan a bit. Ask for it to be fixed and an appropriate payment by way of apology. Good luck.

Gromitt

Mullington wrote: »

My mother received a letter today advising her that her tracker bond taken out in June 2013 at 1.7% AER/Gross was wrong and that they had sent the wrong Certificate of Investment.

Today they have sent her a duplicate Certificate Of Investment which advises that the AER/Gross interest rate will now be 1.19%

You've read it wrong. It says the AER will be the fixed interest rate (1.19%) PLUS the current BoE base rate, so it'll be 1.19% + 0.50%, so 1.69%. They even give an example of how to calculate the interest rate applicable to the savings.

The only difference is that the old letter said the whole interest rate was fixed for the 18 month term.

Considering unemployment is down, the interest rate may rise, which means your interest will increase rather than be fixed. If you don't like this you can complain.

Mullington

Cheers for the replies. From what you have explained it appears the correction letter doesn't explain itself as well in terms of the overall % AER as the first.

Given the murmurings yesterday in the news that the BofE base rate "might" edge up I dare say my mother is best to stick it out. I'm pretty sure though Mark Carney won't boost her pot before the maturity of the bond however but one can live in hope.