Interest rates for TheONE Account staying up

Desperate_Housewife_2-2

I have just read this thread and wanted to add my comments.

I have had a one account for around 8 years now and I am in the fortunate position of having nearly paid it off and thankfully (due to stoozing mainly) am in credit much of the time. However I agree with the majority of the comments on this thread, especially that one account customers should voice their concerns. I have just called them and asked for my complaint to be logged (interestingly I had to wait longer than usual...are there loads of us complaining?).

I reckon that the poster who said they probably want to offload some of us due to the credit crunch may be right.

Sorry to sound downbeat but I think there are hard times ahead and anyone who owes money is in for a bumpy ride.

Batten down the hatches now.......

Going_Digital

I think the main problem from my perspective is that I took out the one account on the understanding that interest rates would go up and down with base rates. I was and still am happy to accept the risks involved in following the base rate as it is a rate that carefully scrutinised by the Bank of England and changes are not made on a whim.

What has happened however is that RBS has simply decided it needs some more money so has decided to help itself to our money by increasing the interest rates. The interest has effectively increased by .5% in the last 2 months by their refusal to pass on the last rate cut and now increasing the rate further this month. I wouldn't be bothered if the base rate had gone up even if it was 3% because that was the risk I signed up to. It is RBS changing the way the account works just to suit themselves after making bad business decisions.

Nothing has changed on my side, I have not suddenly become a higher risk to RBS that warrants increased rates it is solely down to their mismanagement why they need to steal money from us. For a typical mortgage this .5% increase could easily be £500 a year. Would you really had over £500 to the car dealer who sold you a car last month because he decided he needed an extra £500 ? No you wouldn't you made the deal at the time and that is what you agreed to. They may well have been clever in allowing for increases in the Terms and conditions but the product has always promised to follow the base rate and now it doesn't.

I agree with jackarmy that most busy people are apathetic but only because of limited time. But can you afford to just throw £500 a year away ? The trouble is if people don't make a stand then they will just continue to do whatever they like. What if they add another .25% next month, who's going to stop them if nobody bothers to complain ?

wymondham

Whilst I agree with all of the above, I think One Account, like all others consider if customers don't like it they can go elsewhere, which is ultimately the case in the majority of circumstances. When banks raise their rates they know the effects it has and it is all designed to be so - One Account will have a figure of people it wants to leave, with nice projection graphs etc and rates will drop I suspect once this threshold is met......

In my own company, if we don't want someones business we quote way too high... the customer is free to choose. Same principle.

wymondham

jackarmy wrote: »

I've Wymondham, I get the impression you know how to use this account to its full advantage. Would you consider sharing some of your experiences in how best to manage this product effectively?

The only thing I would say is that One Account, like all CAM accounts are short term. Once you have one you throw everything you have at it to get rid of the mortgage within a few years max. It allows you to do this as well as live/eat/drink etc due to it's flexibility. Don't get one if you expect to use it like any other mortgage product - it's a completely different product..

Going_Digital

The thing is they are not going to loose the risky customers they are going to loose the good ones.

By increasing rates for all customers it will be the ones that are a good risk that can find deals elswhere at good rates. My one account balance is currently a mere 36% of my home value so you can't get much lower risk than that. As a result I am looking for another deal and should have no difficulty finding one at such a low LTV rate.

However someone who has a 65% LTV is never going to find a deal so all the low risks like me go elsewhere and RBS simply increases the % of high risk customers they have who they will end up having a higher number of defaults from as they increase rates making it harder for the people already struggling to keep their heads above water pushing them into default for the sake of some short term gains.

Going_Digital

wymondham wrote: »

The only thing I would say is that One Account, like all CAM accounts are short term. Once you have one you throw everything you have at it to get rid of the mortgage within a few years max. It allows you to do this as well as live/eat/drink etc due to it's flexibility. Don't get one if you expect to use it like any other mortgage product - it's a completely different product..

Well yes in part but they are also useful for people like me who started a business a few years back and it allowed me to have a highly variable income. Some months no income and others a good income until the business was established and I received a regular income. So this type of product is good for people who don't want to worry about loosing their home for not being able to pay one month.

chickadee

Going_Digital wrote: »

The thing is they are not going to loose the risky customers they are going to loose the good ones.

By increasing rates for all customers it will be the ones that are a good risk that can find deals elswhere at good rates. My one account balance is currently a mere 36% of my home value so you can't get much lower risk than that. As a result I am looking for another deal and should have no difficulty finding one at such a low LTV rate.

However someone who has a 65% LTV is never going to find a deal so all the low risks like me go elsewhere and RBS simply increases the % of high risk customers they have who they will end up having a higher number of defaults from as they increase rates making it harder for the people already struggling to keep their heads above water pushing them into default for the sake of some short term gains.

I completely agree GoingDigital, I am in a similar position. My current LTV is around 30% and I'm considering looking elsewhere. I am loath to return to an inflexible mortgage however and couldn't now imagine returning to the days when the mortgage was just one among a number of DDs on my current account.

Putting that aside, I do feel unjustly penalised by this increase. I have never defaulted on my mortgage, have always had a steady job and would never be classed 'sub-prime'. I can understand that the One Account might wish to increase rates for new borrowers, which is fine, as I am not one of them! To make it more fair, it could widen the interest rate gaps in its tiers, making the higher LTV a more expensive rate. This would be equally fair for new and existing borrowers where there may be a potential risk of the dreaded negative equity.

You are absolutely right in that it is the likes of you and I who will be in the best position to move lenders, leaving RBS with a higher overall risk.

Gordon_T_2

Yes, like others on here Im what they would call a good customer. My LTV is less than 10%. Never missed a payment, have good balances on deposit and havent defaulted on any accounts.
Now I am looking to get a personal loan at a fixed rate secured on my home instead of the mortgage. I will take this loan because I know what the payments will be and they cant ask for more. Its exactly what Going_digital is on about with the car saleman asking for an extra £500 from you.
As for the other money I have with them (a good healthy sum!), this will be taken out and deposited elsewhere.
They shouldnt be allowed to get away with this. DO SOMETHING. whether its a phone call, letter etc. Let them know how you feel...........G

jackarmy

Its interesting to read other peoples situations and it seems to be as I've said before is that the average one account customer is financially savvy, has a smaller than average LTV and manages his or her account effectively.

Perhaps the bank are taking the same approach as they have been with credit cards. Get rid of people who are financially sensible and keep customers where they know they can make greater gains.

Of course it could be that The One account LTD is not making a great enough contribution to the Group.

Perhaps since Jayne left the whole structure is in disarray.

By the way who exactly is in charge at the Norwich office

Going_Digital

Just got of the phone from their 'Customer Retention' department. I told them that their changes in the interest rate have resulted in my closing the one account. They were adamant that they never sold the one account as a tracker mortgage. I said that is irrelevant, the product was clearly positioned to appear to be a tracker and that they may have protected themselves from a legal standpoint on technicalities in the T&C's but that doesn't change the fact that they are in the wrong for changing the product after years of giving the impression that the account interest was linked to the base rate. No matter what the T&C's say they have made an underhand decision here that will loose customers.

They said they had a meeting and explained that they will loose some customers but more will stay and pay the higher rates than those that would leave so it was better for the financial position of the bank.

Lets prove them wrong !
Even if you can't leave at least consider trying some of the tips in my other thread http://forums.moneysavingexpert.com/showthread.html?t=971855 to reduce your interest rate making their increase a futile exercise.