Banks will tell savers when teaser rates f inish

BANKS and building societies will be forced to end sneak cuts in interest rates paid on savi ngs accounts t hat have snatched billions of pounds from customers.

The move has been announced by the City watchdog, the Financial Conduct Authority (FCA), as part of a wider crackdown designed to restore the nation’s trust in saving.

The finance giants routinely tempt people with attractive high interest rates on new cash savings accounts, including ISAs, only to slash them by stealth a short time later.

As a result, millions of customers, most often pensioners, find their money is sitting in a ‘zombie’ account paying derisory rates of interest or nothing at all. Now, the FCA has told the firms that they must give clear warnings of rate cuts and clearly state the rate being paid on all documents and emails sent to customers, rather than hiding it in the small print.

The City watchdog will even ‘name and shame’ those firms paying poor interest rates to long- standing customers. Banks and building societies will also be required to allow dissatisfied customers to transfer their cash ISA account within seven days, so boosting competition.

The measures are a victory for Money Mail, which has highlighted how savers have been confused, confounded and cheated by the finance giants for years.

The Get Britain Saving campaign revealed how people trying to put money aside have suffered mis- sell- ing, received appalling advice, been fobbed off with derisory rates of interest and pathetic investment returns.

Research by consumer group Which? calculated that customers lost as much as £4.3billion a year because their savings are sitting in savings accounts offering poor returns.

Executive director Richard Lloyd said: ‘Today’s move from the FCA is a significant win for savers. With many never switching because they don’t think it will make a difference, it’s good that the FCA has listened to our calls to make savings providers do more to help customers get a better deal.’

Personal finance expert Andrew Hagger, of Moneycomms.co.uk, said the changes were long overdue.

‘Providers should have been doing these basics as a matter of course and it shouldn’t have needed the regulator to step in,’ he said.

‘Too often banks and building societies offer best-buy deals for new customers whilst loyal savers are left with long-forgotten deals paying next to nothing.’

The British Bankers Association said it was wrong to blame its members for poor returns on savings, adding that the rates reflect the Bank of England base rate, which has been at a record low 0.5 per cent since 2009. ‘We always encourage customers to review their savings regularly and to shop around for a better deal,’ said a spokesman.

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