Senin, 18 Juni 2012

JEFF PRESTRIDGE: Keep it simple to halt rash of mis-selling

JEFF PRESTRIDGE: Keep it simple to halt rash of mis-selling

By Jeff Prestridge

PUBLISHED: 16:05 EST, 16 June 2012 | UPDATED: 12:51 EST, 18 June 2012

Simplicity is something the financial services industry does not do well.

Over the years it has dreamt up ever more complex products or introduced more onerous terms and conditions to the bafflement of most customers. The result has been an unhealthy cocktail of mis-selling and consumers being short-changed.

Leading the change: Yorkshire Building Society

Leading the change: Yorkshire Building Society

Nowhere is unnecessary complexity more prevalent than in the deposit savings market.

As my colleague Jo Thornhill reports, most variable- rate savings accounts now come with short-term bonuses, principally to ensure they either end up in best-buy tables or look better value than they really are.

Although there are short-term benefits for savers to reap, the providers of these accounts offer them because they want as many customers as possible to stay with them once the bonus has expired. It is then that providers start to short-change customers and amass profits.

Thankfully, there are some organisations that are going against the grain and striving for simplicity and long- term value. Yorkshire Building Society is leading the charge.

Last week, the country’s second largest building society confirmed that its no-nonsense branch- based variable account, Triple Access Saver, has been its most popular with customers over the past year â€" more successful than online or postal accounts.

Triple Access comes with no bonus. It currently pays 2.25 per cent interest and the only conditions are that a minimum £100 must be put in the account initially and that only three withdrawals are made in any one year.

It also comes with a passbook. ‘Customers appreciate the straightforward terms, ease of use and an attractive, competitive rate without any introductory bonus for a limited period,’ says Mike Helliwell, the society’s savings product manager.

Yorkshire, one of the country’s few deposit takers to be investing heavily in its High Street network, has struck out for fairness. It would be nice if rivals trod the same path.

Although Nationwide is not as committed to the High Street as Yorkshire â€" it has just announced the closure of 23 branches much to the annoyance of many customers â€" the country’s largest building society is trying desperately hard to be the saver’s friend.

In late 2010, as exclusively reported in Financial Mail, it launched a seven-point charter designed to give savers a fairer and more transparent deal. The overriding aim was to reward customer loyalty.

So, for example, existing savers would benefit from superior ‘exclusive’ deals and would never be precluded from offers previously available only to new customers (a nasty unfair practice still carried out by many rivals).

Nationwide also promised to pay interest on balances transferred from a rival into one of its cash Isas as soon as an application form was received.

The society has honoured these commitments and it is no coincidence that customer complaints are a fraction of most of its rivals. Now the mutual is offering an email or text alert ‘SavingsWatch’ service that will tell savers with variable-rate accounts when their interest rate changes (up or down).

It will also inform them of new Nationwide savings products as well as when a bonus on a particular account is about to be withdrawn.

Of course, savers will not get alerts when rival banks and building societies launch superior products (for that, readers should use the excellent rate tracker facility at savingschampion.co.uk). But it’s a good move that hopefully will persuade more savers to get a better interest rate on their money.

Like Yorkshire’s commitment to fairness, it would be wonderful if other institutions copied Nationwide’s savings initiative. We might then bring to an end the situation where hundreds of thousands of savers are stranded in accounts paying derisory rates.

On the issue of Nationwide closures, which extend across all its savings brands (Cheshire, Derbyshire and Dunfermline as well as Nationwide), Financial Mail would like to hear from readers who are unhappy about their local branch shutting.

From the comments on our sister site thisismoney.co.uk, the closures, which will be completed by the end of August, have caused a lot of discontent.

Financial Mail will be visiting some of the communities hit by these closures. If you would like us to call, drop me an email. We’re here to fight your corner.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

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The Yorkshire is NOT "leading the charge" with this account. It only allows withdrawals on three days per calendar year, so it is very restrictive and is typical of the sort of account that Thisismoney usually criticises. Also, the Nationwide is NOT "trying desperately hard to be the saver's friend". Nationwide is busy paying its executives eye watering salaries and bonuses while cheerfully carrying on with asset stripping the former Derbyshire and Cheshire building societies, paying Nationwide savers rotten rates, and giving members lousy service. The writer of this article seems to have swallowed Yorkshire and Nationwide PR press releases whole. The two insititions must be laughing.

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Here is a straight forward question I had four credit cards ........ And five years ago I was fortunate to pay them all off and I now have no old card or paperwork to approach the the card provider One was MS. The other was BHS and I do not know if PPI was included in it ....how would I find out !!!!

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