Notice of interest rate reduction on notice accounts

refluxer

slinger2 said:

Barkin said:

sunflower_5901 said:

I have a 90 day notice account with Vanquis Bank.
They have confirmed that they will give only 30 days' notice of a reduction in interest rate on this account.
This is clearly an unfair term and contrary to all the other banks mentioned above.
I have contacted both FSCS and Bank Of England and neither body can point me to any rules which stipulate that Vanquis Bank should provide a minimum of 90 days' notice of an interest rate reduction on this account.
Can anyone offer any advice?

This is covered in their T's&C's. You can withdraw your money and/or close the account without serving the notice period. 

https://www.vanquissavings.co.uk/pdf/general-terms.pdf section 19 says "If we reduce the interest rate that applies to your account, we’ll tell you at least 30 days before doing so." There is a section "Your options if you’re not happy with a change we’re making" but it's not clear to me that it covers interest rate reductions.

In those Vanquis terms, 'Changing interest rates' and 'Changing other terms' are both sub-headings in the 'Changes we can make' section so, as both are classified together as changes, it definitely will be possible to close the account in-between the date the notice is given and the date it comes into effect without having to give the required amount of notice.

This is actually quite common when a notice account provider gives a shorter notice period for interest rate reductions than the withdrawal notice period on the account - I closed a Melton notice account (without giving notice) on exactly the same basis a few years ago, after a rate reduction was announced. I actually left it until a few days before the deadline in order to benefit from the rate for the longest time possible however it pays not to leave it until the last minute, as missing the deadline due to it being on a non-banking day or something unexpected like an early customer support number closure wouldn't be desirable !

slinger2

refluxer said:

slinger2 said:

Barkin said:

sunflower_5901 said:

I have a 90 day notice account with Vanquis Bank.
They have confirmed that they will give only 30 days' notice of a reduction in interest rate on this account.
This is clearly an unfair term and contrary to all the other banks mentioned above.
I have contacted both FSCS and Bank Of England and neither body can point me to any rules which stipulate that Vanquis Bank should provide a minimum of 90 days' notice of an interest rate reduction on this account.
Can anyone offer any advice?

This is covered in their T's&C's. You can withdraw your money and/or close the account without serving the notice period. 

https://www.vanquissavings.co.uk/pdf/general-terms.pdf section 19 says "If we reduce the interest rate that applies to your account, we’ll tell you at least 30 days before doing so." There is a section "Your options if you’re not happy with a change we’re making" but it's not clear to me that it covers interest rate reductions.

In those Vanquis terms, 'Changing interest rates' and 'Changing other terms' are both sub-headings in the 'Changes we can make' section so, as both are classified together as changes, it definitely will be possible to close the account in-between the date the notice is given and the date it comes into effect without having to give the required amount of notice.

This is actually quite common when a notice account provider gives a shorter notice period for interest rate reductions than the withdrawal notice period on the account - I closed a Melton notice account (without giving notice) on exactly the same basis a few years ago, after a rate reduction was announced. I actually left it until a few days before the deadline in order to benefit from the rate for the longest time possible however it pays not to leave it until the last minute, as missing the deadline due to it being on a non-banking day or something unexpected like an early customer support number closure wouldn't be desirable !

See Aldermore's terms by comparison: "If we reduce the interest rate on your Aldermore Notice Account, we’ll let you know at least 14 calendar days before the rate change. You’ll have at least 30 days from the date that we let you know to tell us you want to close your account or switch to a different account. If you do that, you won’t have to observe any notice period, pay any charges or suffer any loss of interest that might otherwise have applied. If you don’t contact us, we’ll assume you’ve accepted it."

Vanquis: "If you’re unhappy with a change we’re making, you can tell us but you may need to close your account. You must tell us before the change comes into force. If your Product Information document says you have to give us notice to close your account, this won’t apply from the date we give you notice until the date the change is made."

One is crystal clear, one is not.

refluxer

slinger2 said:

See Aldermore's terms by comparison: "If we reduce the interest rate on your Aldermore Notice Account, we’ll let you know at least 14 calendar days before the rate change. You’ll have at least 30 days from the date that we let you know to tell us you want to close your account or switch to a different account. If you do that, you won’t have to observe any notice period, pay any charges or suffer any loss of interest that might otherwise have applied. If you don’t contact us, we’ll assume you’ve accepted it."

Vanquis: "If you’re unhappy with a change we’re making, you can tell us but you may need to close your account. You must tell us before the change comes into force. If your Product Information document says you have to give us notice to close your account, this won’t apply from the date we give you notice until the date the change is made."

One is crystal clear, one is not.

In the context of the whole 'Changes we can make' section in the Vanquis terms, it was pretty clear that the paragraph you quoted applies to both types of changes (interest rates and terms) they describe.

I agree that the Aldermore terms spell it out a bit better with respect to a change in interest rate in particular, though.

Presumably, Aldermore then have a separate paragraph outlining what happens if they change the terms in other ways, whereas Vanquis have just decided to apply the same terms to both types of changes - hence the more generic quote above, which isn't quite as clear as Aldermore's when it's taken out of context of the whole section.

boingy

I haven't had many notice accounts over the years but I think all of them either promised me enough notice that I could withdraw without penalty before the change or had a clause that allowed me to close the account completely without penalty. And that seems fair enough. I'd be a bit peeved if I had a 90 day notice account but only got 14 days notice of a rate drop with no "get out" clause. 

I suspect we're going to learn a lot more about such scenarios over the next year or two!

sunflower_5901

Thank you very much for your replies.  I would prefer not to have to withdraw my money from Vanquis as their rate is better than other rates currently available elsewhere. 
On Vanquis T&C's section 19, I agree with slinger2 - this sentence appears to me to refer to changes in terms other than the interest rate.

sunflower_5901

Thank you all for your helpful replies and interpretation of the Vanquis t&c's.  I will find out the answer for sure when they actually announce a rate reduction....

Barkin

sunflower_5901 said:

On Vanquis T&C's section 19, I agree with slinger2 - this sentence appears to me to refer to changes in terms other than the interest rate.

Even though the first sub-heading in the "changes we can make" section is "changing interest rates" ??

As Refluxer says above, you shouldn't read individual paragraphs in isolation - but rather as a whole with correct context. 

masonic

sunflower_5901 said:

Thank you very much for your replies.  I would prefer not to have to withdraw my money from Vanquis as their rate is better than other rates currently available elsewhere. 
On Vanquis T&C's section 19, I agree with slinger2 - this sentence appears to me to refer to changes in terms other than the interest rate.

A while back the OFT issued clear guidance that changes to rates and fees were considered a contract variation that would give consumers the right to dissolve a contract without penalty. This guidance has subsequently been used by the Financial Ombudsman Service to award compensation where firms have forced customers into variations without a route to avoid moving onto them. Firms have (or should have) learned from this.

sunflower_5901

Vanquis notified me on 17.09.24 of a reduction in interest rate from 5.40% to 4.75% on their 90 day notice account.
This rate reduction will take effect 22.10.24 (ie. they have given me only 35 days notice of the change, even though I am unable to withdraw money from the account for 90 days).  As discussed above, this is clearly an unfair change, although it is technically within their published terms & conditions which state that they need to give only 30 days notice of a reduction in interest rate.
To add insult to injury, in the SAME email as the email in which they have notified me of the rate change, they have also informed me that their general terms and conditions will be changing with effect from 21.11.24 to:

"If we reduce the interest rate that applies to your account other than a notice account (i.e. one that requires you to give us notice before making a withdrawal or closing the account), we’ll tell you at least 14 days before doing so. If we reduce the interest rate that applies to a notice account, then we will tell you about the change at least 14 days plus the account’s notice period before the change takes effect. The additional notice we give you will ensure that you have sufficient time to exercise your rights to close the account (without loss of interest or additional charges) before the reduction in the interest rate comes into effect. See below “Your options if you’re not happy with a change we’re making”."

ie.  AFTER they have unfairly reduced the interest on my 90 day notice account, they will alter their terms and conditions to be fair (in connection with giving notice of interest rate reductions).
It is as if they have realised that their terms are unfair, but have chosen to make use of the unfair terms before they change them.

I would be grateful for any advice as to how to withdraw my money from my Vanquis 90 day notice account on 22.10.24.

dali21

I have a notice account and an easy access saver account with Vanquis.  However I have only received an email about a rate reduction to the easy access account from 5.1% to 4.75% from 22 October.

Is your rate reduction definitely for the notice account?