Moving savings to another account with higher interest

Tostig

It's worth mentioning that in these rising interest-rate times, moving substantial amounts of savings from low-interest accounts to new higher interest accounts may not be as easy as is made out.

One is likely to have to submit to a searching and time-consuming security review phone call to ensure that your movement is your own choice after your own research, and not some kind of coercion by skilled scammers. This interrogation can be quite unsettling to someone who is already wary of moving their savings to a new place.

It's understandable that the banks want to protect their customers from fraud, but it does seem that there is a tendency to assume that older people are so feeble that they can't recognise a scam phone call, or scam email, or a scam cold-caller, and can actually make their own decisions. I'm certain these kind of frauds to occur, but it's hard to take one's veracity being questioned.

General_Grant

It's not just banks which think older people are simple minded.

Sister of a friend was being admitted into hospital for a procedure recently and went with her daughter for company for the journey and initial time there.  The hospital staff then asked the daughter whether her mother could feed and toilet herself.  The mother is 66 yo.

Band7

I share your annoyance about the interrogations if/when the Fraud Police select you for a review of the payments you want to make. It is worth reminding ourselves that the prime reason is not that the banks want to protect their customers but an effort by the banks to limit their own liability. This liability has been forced on banks by consumer rights campaigners who got the regulators to impose mandatory refunds for APP scams. This is all due to an astonishing number of witless people who are still falling for fraudsters who make them transfer their money to 'safe' accounts. Grin and bear..... It will probably soon be over, anyway, as interest rates will inevitably come down again.

TheBanker

Tostig said:

It's understandable that the banks want to protect their customers from fraud, but it does seem that there is a tendency to assume that older people are so feeble that they can't recognise a scam phone call, or scam email, or a scam cold-caller, and can actually make their own decisions. I'm certain these kind of frauds to occur, but it's hard to take one's veracity being questioned.

The bank I work for doesn't think this. We know that anyone, of any age, can fall for a scam. There are different types of scam and it is true that fake investments do tend to target older (but not necessarily 'old') people, simply because they have more to invest. But this is not exclusively true.

In the 'olden days' a bank was responsible for making sure any payments made had been properly authorised by its customer, so security checks would focus on making sure the person who'd requested the payment was the real customer.

Now, banks have a responsibility to protect their customers from falling victim to scams as well. In H1 2022 these scams resulted in losses of over £208m (source: https://www.ukfinance.org.uk/system/files/2022-10/Half year fraud update 2022.pdf). So you can understand why banks need to check.

In my bank recently I am aware of a recently retired police officer being scammed out of their life savings. Many of the victims we deal with have professional jobs, and are not the kind of people who you would assume would be vulnerable to scams. I even know of bank staff who have been scammed. So unfortunately everyone has to go through the checks when they're making payments that share characteristics with scam payments. I know the questions are frustrating but they are there for a reason.

Where there is a scam, the FOS expect the bank to have interrogated the customer prior to allowing the payment. There are loads of published decisions - e.g. https://www.financial-ombudsman.org.uk/decision/DRN-3775019.pdf

eskbanker

Tostig said:

it does seem that there is a tendency to assume that older people are so feeble that they can't recognise a scam phone call, or scam email, or a scam cold-caller, and can actually make their own decisions

What makes you think that such controls are applied only to 'older people', on the basis that they're 'feeble'?

km1500

we need a switching service for savings in the same way as we can switch isa accounts

TheBanker

km1500 said:

we need a switching service for savings in the same way as we can switch isa accounts

I don't think we do. ISA accounts need a switching service to protect their tax free status. Current accounts need a switching service due to the need to move Direct Debits and incoming payments. Savings accounts don't really need these.

All it would remove is the need for the customer to initiate a transfer of funds to the new account - it might make life slightly easier but isn't really needed. The roll out of Confirmation of Payee to remaining banks will help with the fraud concerns to a degree.

Personally I would like to see a central 'flag' which identifies an account belonging to an FCA regulated entity used to collect investment funds, and a similar flag for solicitors client accounts. This would make it easier for the sending bank to judge the likelihood of it being a scam. 

Band7

km1500 said:

we need a switching service for savings in the same way as we can switch isa accounts

I don‘t think we do. 

As annoying as it can be if some of your payments, especially to new payees, are held for checks can be, it‘s rare that this happens, and it can usually be resolved quite quickly. Most times, there’s no issue, and it’s a quick and painless thing to do in my experience. Shifting large sums of money from one savings account to another is also not something lots of people need to do lots of times.

There are also plenty of practical reasons why it would not be easy / universal to implement such a switch service. For example, deposits to some savings accounts can only be made from a nominated current account. 

A savings account switch service would be a solution looking for a problem. 

dealyboy

I'm slightly narked at some recent comments regarding older people to be more likely to be scammed, or are perhaps feeble minded. The suggestions being that financial companies / banks do not discriminate on age and indeed we are all equally likely to be the target of a fraud.

Whilst I accept that banks do not use age as a factor in their fraud and security procedures, it is undeniably true that there is a direct correlation between mental capacity decrease with increasing age. I should know, as an older person I have noticed slow changes in myself, which I consider to be a totally natural process, I make more mistakes, I am more forgetful and lose concentration sometimes. I have to own up and accept that some things are my fault (it's not easy).

Whether we like it or not, age is a factor in any risk assessment, just as it is with our favourite analogy of driving. Should we gear our financial life towards safety first? (we are part way down an already cautious approach in some areas), should we put barriers up around every street corner?

Maybe age should be one of many factors in determining likelihood of fraud or simply a mistake. I am certainly not going to complain if I have a 'did I mean it conversation' just as I am very happy when Marcus returned two attempted transfers yesterday, with accompanying courteous e-mails, when I'd forgotten about the linked current account.

eskbanker

dealyboy said:

I accept that banks do not use age as a factor in their fraud and security procedures

[...]

Whether we like it or not, age is a factor in any risk assessment

These comments seem contradictory to me, but it's the first one that's relevant to this thread.

Band7

dealyboy said:

Whether we like it or not, age is a factor in any risk assessment

I trust septuagenarians like myself get a lot of brownie points for their immense experience which can rarely be matched by younger people😂😂😂