Secure Trust Bank 183 Day Tracker Account

buffman

About 3 years ago I opened a Secure Trust Bank 183 Day Tracker Account as it guaranteed to pay 3% above base rates for ever (i.e. no end date)[FONT=&quot].

I received a letter this morning stating that they will be lowering the rate to 2.11% from April due to market conditions.

Is anybody else in a similar condition and can they really do this? [/FONT]

SnowMan

Don't have an account myself but I remember this discussion when the account came out

https://forums.moneysavingexpert.com/discussion/comment/43444068#Comment_43444068

Makes interesting reading especially as dalbum said at the time that he/she had been told the rate was guaranteed as long as he/she held the account.

buffman

I spoke with one of their customer services representatives at the time (I have date/name) and was told that the guarantee applied for as long as the account was opened.

Any idea how I should persue this? Write to a national newspaper money section, the Financial Ombudsman?

What could I hope to achieve? Secure Trust Bank are made to honour their rate guarantee? (my prefered option)

Had I known at the time that the guarantee was only 2.5 years, I may have invested in a higher paying fixed rate bond instead.

opinions4u

Link to product summary:

http://www.securetrustbank.com/savings-accounts/withdrawn-accounts

(do a CTRL F and enter 183 to find the section).

No mention of "guarantee". But it does call it a "tracker".

T&Cs below:

11.8 We may, at our discretion, vary: a) our charges, internally managed rates of interest, banking hours, banking practices and similar matters by written notice to you; b) our base interest rate, which will be the rate published from time to time by Secure Trust Bank PLC as its base rate by general notice on our website and c) any of these Terms and Conditions.
We will give you at least 2 months prior notice of any change to these Terms and Conditions. If you continue to maintain an Account or Bond with us after such notice you will be taken to have accepted the changes. Please also refer to the additional conditions for specific Terms relating to the different types of Savings Accounts or Bonds.


28. 183 Day Notice Tracker Account (Issue 1)
28.1 You can close your Account by telling us in writing. In the case of joint Accounts, all Account holders must sign.
28.2 You can make a withdrawal from your Account by giving us 183 days’ notice in writing. The notice period is calculated from the day we receive your instruction. Any fee and notice period will not be applied where a customer is deceased, or moving to a Fixed Term Bond with Secure Trust Bank.
28.3 These Terms and Conditions and the Variable Interest Notice Account Application Forms, together with any conditions which the law implies, apply to your Account.
28.4 The minimum amount for subsequent deposits is £1,000.
28.5 The maximum balance, excluding credit interest applied to the Account is £1,000,000 for personal customers and £2,000,000 for Business, Charity, Trusts and Societies. An Account holder may only have one 183 Day Notice Tracker Account Issue 1. The maximum number of interest withdrawals allowed in any calendar year without incurring a penalty is 4.The maximum number of capital withdrawals allowed in any calendar year is 3.
28.6 Withdrawals can be made each year from any notice account without penalty, provided the required notice period is given as described in these Terms and Conditions. Where we deem that there are exceptional cases (e.g. terminal illness) the Bank, at its discretion, may agree that a withdrawal can be made without notice.
28.7 Interest will be calculated according to the Bank of England Base Rate as published by the Bank of England and be 3% above that rate.
28.8 The tariff applicable to the Account can be found on our website at www.securetrustbank.com

http://arbuthnotgroup.com/savings-accounts/savings-terms-and-conditions

They will argue that condition 11.8 gives them the right to vary. Do you have a PDF or other document the promoted the account?

SnowMan

buffman wrote: »

I spoke with one of their customer services representatives at the time (I have date/name) and was told that the guarantee applied for as long as the account was opened.

Any idea how I should persue this? Write to a national newspaper money section, the Financial Ombudsman?

What could I hope to achieve? Secure Trust Bank are made to honour their rate guarantee? (my prefered option)

Had I known at the time that the guarantee was only 2.5 years, I may have invested in a higher paying fixed rate bond instead.

Starting point is a letter of complaint asking Secure Trust Bank to honour their guaranteed rate.

If they won't agree to this then on a final response or 8 weeks whichever is earlier refer the complaint to the Financial Ombudsman Service.

You can also try the press etc, not sure how interested they would be.

Clearly it was badly advertised and you were mislead but I'm not sure how the FOS will view it and what the basis for calculating redress would be if they think redress is due. As was suggested at the time they will argue that they can use term 11.8 but they gave every indication the guarantee was permanent for example when you queried it. And what is the point of a guaranteed rate if it is not guaranteed; any limitations to the guarantee on the interest rate should have been pointed out in the key information.

buffman

No mention of "guarantee". But it does call it a "tracker".

The word 'guarantee' is not used. However under the list of benefits of the account that I printed at the time, it states ' interest will be 3% over the Bank of England Base Rate'

This is similar to their T & C's and fairly clear to me.

SnowMan

buffman wrote: »

No mention of "guarantee". But it does call it a "tracker".

The word 'guarantee' is not used. However under the list of benefits of the account that I printed at the time, it states ' interest will be 3% over the Bank of England Base Rate'

This is similar to their T & C's and fairly clear to me.

I didn't mean to suggest that they had used the word guarantee. However as you say the interest rate was unreservedly '3% over the Bank of England Base Rate' which is effectively a guarantee.

It should have said in the key information something along the lines of '3% over the bank of England base rate, which can be varied to a different formula with 2 months notice'.

VT82

I remember this well from when it was launched, thinking it was a shocking choice on their part to offer such a risky product.

Even if they were to claim the rate that was being tracked wasn't the BoE Rate, but their own internal bank rate which then just happened to be 0.5% as well, they can't now say that they are reducing their bank rate to -0.89%!

They deserve to be hit hard for this one. And they would only have themselves to blame. Very amateur.

atypical

I have this account and was also told the rate was guaranteed for the life of the account when I called (didn't record a name or date though).

I have a screenshot of the website where it says "Interest will be 3% over the Bank of England Base Rate".

I also have a copy of an "Accounts, Interest Rates and Charges" document they sent on account opening which states "the interest rate will Track the Bank of England base rate which is currently 0.50% and will be at an interest rate of 3% over the Bank of England base rate."

Clearly misleading but not sure how they can compensate to put me back in the same position I always thought I was in.

buffman

atypical wrote: »

Clearly misleading but not sure how they can compensate to put me back in the same position I always thought I was in.

By honouring the original terms of the account!

I will firstly make an official complaint to the bank. When I originally opened the account both from the information provided online (which I have a screenshot) and conversations with their customer service department (which I have a record of the name/time and the conversation), I was left in no doubt that while my account was open, I would receive base rate plus 3%. If my complaint is unsuccessful, I will take it to the Financial Ombudsman.

May I suggest anyone else in a similar position do likewise.

I do not currently intend to close my account as this will make it impossible for the Financial Ombudsman, if it rules in my favour, to reinstate the rate guarantee indefinitely going forward.

Dump_Tesco

Dear buffman,

I was so pleased to read your post. I also invested in the 183 Day Tracker with Secure Trust in 2011. My understanding was that the rate of 3% above base was not variable and would be paid as long as the account was open. Based upon this, I also invested a significant amount of money in the same product on behalf of my Company.

Up until now, I have been very pleased with Secure Trust and have even invested in their 5 year fixed account. I was shocked to receive their recent letter notifying me that the rate of the 183 Day Tracker is to be reduced to 1.61% above base with effect from April. I am not convinced that they can do this. I have today spoken with Secure Trust and requested a copy of the original Terms & Conditions for the 183 Day Tracker (i.e., those that existed when the account was launched and not the new ones that they have conveniently written). They have promised to send these to me.

I am really annoyed with Secure Trust. I believe that they launched the 183 Day Tracker without realising what they had committed to - but that is their problem. I expect Secure Trust to honour the 3% rate and shall take this to the Ombudsman if necessary. Please keep up the pressure and keep in touch.

:mad: