Hinckley & Rugby Interest Rate Reduction.

subjecttocontract

I was under the impression that the t&c's require H&R to provide a minimum of 14 days notice of interest rate changes. They posted my notification on 19th April, 2nd class......it only arrived today, 21st April. That's a day less than required so they haven't complied with the 14 day notice requirement.

allegro120

subjecttocontract said:

I was under the impression that the t&c's require H&R to provide a minimum of 14 days notice of interest rate changes. They posted my notification on 19th April, 2nd class......it only arrived today, 21st April. That's a day less than required so they haven't complied with the 14 day notice requirement.

Mine arrived today too.  Good that they waved a period of notice so we can withdraw on 4th May.

ForumUser7

Mine arrived today as well, also dated 19th April.

@subjecttocontract - If you decide to pursue them re giving only 13 days notice, let us know what they say please. I'm interested, as it feels like it must've been an oversight. If they'd posted 1st class, and it arrived today - they could blame it on the postal system I suppose, but they sent it out a day too late to arrive in time.

Hattie627

I've got this account but I haven't received the rate reduction letter yet. Presumably I will get it tomorrow (22 April) or even into next week (Monday 24 April). 

Hattie627

Here are the circumstances in which Hinckley and Rugby may change variable savings interest rates (from their savings terms and conditions):-

7.6 We may change interest rates at any time if we reasonably believe that the change is needed for any of the following reasons (which may relate to circumstances existing at the time or those that are expected to apply in the near future):- 7.6.1 to respond to changes in the Bank of England base rate (including the interest rate paid on similar accounts by other providers of financial services); 7.6.2 to respond to changes in the law or the decision of a court or Ombudsman; 7.6.3 to meet relevant regulatory requirements; 7.6.4 to respond to new (or changes to) statements or codes of practice or industry guidance to enhance consumer protection; 7.6.5 to respond to changes to our costs, including administration costs and costs incurred in providing the account; 7.6.6 to respond to a change in tax rates; 7.6.7 to respond to changes our competitors make; or 7.6.8 to enable us to maintain the competitiveness of interest rates paid by our mortgage customers while having regard to the interests of our savings customers. Any changes we make to interest rates will be proportionate to the circumstances giving rise to the change.

It would be interesting to know which reason(s) they are relying on for this reduction. The only possible ones would be 7.6.5 or 7.6.8. I don't see how 7.6.7 can apply as there have been no reductions in similar accounts by competitors since this one commenced. Are we entitled to know which reason is being relied on and the detail behind the reason? 

dcs34

ForumUser7 said:

Mine arrived today as well, also dated 19th April.

@subjecttocontract - If you decide to pursue them re giving only 13 days notice, let us know what they say please. I'm interested, as it feels like it must've been an oversight. If they'd posted 1st class, and it arrived today - they could blame it on the postal system I suppose, but they sent it out a day too late to arrive in time.

This is what I sent to them by Secure Message:

Dear H&R,

I understand from a letter received today (21/04/2023) that H&R will be reducing the rate of interest on this account. This is most unexpected and disappointing given rates are generally rising across the market following numerous BoE base rate increases, as well as continued inflation.

I understand the reduced rate of interest will apply from 4th May 2023. The terms say I would have 14 days notice before the new rate comes into effect. Allowing 14 days prior to 4th May 2023 means I would expect to receive the letter on 20th April 2023. This would not be realistically possible given the letter dated 19th April was sent by second class post and hence only arrived today, 21st April 2023. I therefore am also concerned that H&R sending a letter dated 19th April by second class stamp does not provide the required 14 day's notice period and that H&R would have been aware of this reasonable likelihood when it sent the letter.

In summary given the above disappointments I would therefore like to close the account immediately with full payment of interest on the current balance. Please can this be paid to my account (12345678, 12-34-56) which was used to make all prior deposits.

ForumUser7

Hattie627 said:

Are we entitled to know which reason is being relied on and the detail behind the reason? 

I doubt it - it's probably commercially sensitive.

If I had to guess, H&R required some more funds, above what they already had, due to increased defaults. They released the new rate, and didn't keep an eye on the number of applications. It got out of hand, and now they have more cash than they needed to mitigate the defaults. They can only get 4.25% at the Bank of England, not the 4.75% they were paying, so they are reducing this to the maximum rate they can get on the cash, and then pass it on in full to us.

The best chance of getting a comprehensive answer would be to politely email the CEO. Best to include you got the details from the BSA directory in your email. Colin's details can be found here ~ https://www.bsa.org.uk/media-centre/press-office-contacts/contacts/hinckley-and-rugby-building-society

ForumUser7

dcs34 said:

ForumUser7 said:

Mine arrived today as well, also dated 19th April.

@subjecttocontract - If you decide to pursue them re giving only 13 days notice, let us know what they say please. I'm interested, as it feels like it must've been an oversight. If they'd posted 1st class, and it arrived today - they could blame it on the postal system I suppose, but they sent it out a day too late to arrive in time.

This is what I sent to them by Secure Message:

Dear H&R,

I understand from a letter received today (21/04/2023) that H&R will be reducing the rate of interest on this account. This is most unexpected and disappointing given rates are generally rising across the market following numerous BoE base rate increases, as well as continued inflation.

I understand the reduced rate of interest will apply from 4th May 2023. The terms say I would have 14 days notice before the new rate comes into effect. Allowing 14 days prior to 4th May 2023 means I would expect to receive the letter on 20th April 2023. This would not be realistically possible given the letter dated 19th April was sent by second class post and hence only arrived today, 21st April 2023. I therefore am also concerned that H&R sending a letter dated 19th April by second class stamp does not provide the required 14 day's notice period and that H&R would have been aware of this reasonable likelihood when it sent the letter.

In summary given the above disappointments I would therefore like to close the account immediately with full payment of interest on the current balance. Please can this be paid to my account (12345678, 12-34-56) which was used to make all prior deposits.

Let us know what they say please!

2 things:

1. Make sure you can get a higher return elsewhere - I too thought about closing my account out of frustration, but I realised it would then be getting 3.75%, so decided not to.
2. I imagine they'll request the passbook, and say it will either be by CHAPS or cheque. A nice thing for them to have done would be to offer to waive the CHAPS fee for those who wished to withdraw, but this would cost them a fair bit.

allegro120

Hattie627 said:

Here are the circumstances in which Hinckley and Rugby may change variable savings interest rates (from their savings terms and conditions):-

7.6 We may change interest rates at any time if we reasonably believe that the change is needed for any of the following reasons (which may relate to circumstances existing at the time or those that are expected to apply in the near future):- 7.6.1 to respond to changes in the Bank of England base rate (including the interest rate paid on similar accounts by other providers of financial services); 7.6.2 to respond to changes in the law or the decision of a court or Ombudsman; 7.6.3 to meet relevant regulatory requirements; 7.6.4 to respond to new (or changes to) statements or codes of practice or industry guidance to enhance consumer protection; 7.6.5 to respond to changes to our costs, including administration costs and costs incurred in providing the account; 7.6.6 to respond to a change in tax rates; 7.6.7 to respond to changes our competitors make; or 7.6.8 to enable us to maintain the competitiveness of interest rates paid by our mortgage customers while having regard to the interests of our savings customers. Any changes we make to interest rates will be proportionate to the circumstances giving rise to the change.

It would be interesting to know which reason(s) they are relying on for this reduction. The only possible ones would be 7.6.5 or 7.6.8. I don't see how 7.6.7 can apply as there have been no reductions in similar accounts by competitors since this one commenced. Are we entitled to know which reason is being relied on and the detail behind the reason? 

Definitely not 7.6.7 For me personally it doesn't matter what the reason is, if the new rate is not suitable for me I will withdraw and put my money elsewhere.  I'm not bothered about 1 day delay in notifying either, it's enough time for me to react on their decision.

dcs34

ForumUser7 said:

dcs34 said:

Let us know what they say please!

2 things:

1. Make sure you can get a higher return elsewhere - I too thought about closing my account out of frustration, but I realised it would then be getting 3.75%, so decided not to.
2. I imagine they'll request the passbook, and say it will either be by CHAPS or cheque. A nice thing for them to have done would be to offer to waive the CHAPS fee for those who wished to withdraw, but this would cost them a fair bit.

1. True, but I'm (happily) becoming a higher-rate tax payer this year, so the money would be better placed in an ISA than staying in the regular saver and having 40% off taken off
2. Possibly, in which case I'll ask them to send me a freepost envelope...

ForumUser7

dcs34 said:

ForumUser7 said:

dcs34 said:

Let us know what they say please!

2 things:

1. Make sure you can get a higher return elsewhere - I too thought about closing my account out of frustration, but I realised it would then be getting 3.75%, so decided not to.
2. I imagine they'll request the passbook, and say it will either be by CHAPS or cheque. A nice thing for them to have done would be to offer to waive the CHAPS fee for those who wished to withdraw, but this would cost them a fair bit.

1. True, but I'm (happily) becoming a higher-rate tax payer this year, so the money would be better placed in an ISA than staying in the regular saver and having 40% off taken off
2. Possibly, in which case I'll ask them to send me a freepost envelope...

2. HRBS is one of the few providers I use that refuses to provide prepaid or freepost envelopes for withdrawals. They aught to do it for those affected by the rate increase out of decency, but idk if they will unfortunately