Swamped by the small print

As savings accounts grow absurdly complex, we expose the worst — and most verbose — offenders . . .

SAVERS are being forced to decipher thousands of words of jargon-filled small print to make sense of accounts.

Analysis of banks and building societies’ terms and conditions has found one runs to more than 20,000 words. Others are so convoluted they are incomprehensible to many. As part of our Stop Short-changing Savers campaign, Money Mail is calling for savings to be simplified and for an end to interest rates paying a pittance.

Last week we named and shamed FirstSave for an account paying 0pc. Now research from campaign group Fairer Finance has ranked banks and building societies on the clarity of terms and conditions.

Its small print scores were based on factors such as word count, use of jargon and clarity of language.

Principality Building Society’s terms and conditions run to more than 20,500 words — the same as a 100-page novel.

And those of Yorkshire Bank require a reading age of 31 to decode, although the National Literacy Trust says text requiring a reading age of 11 is most likely to be understood by all.

Kent Reliance, which pays as low as 0.1 pc, has the worst rating for its terms overall. Cumberland, AA and Aldermore set out their terms in a tiny six-point font — cramming up to 1,500 words on one page. Others were criticised for using running text without providing a contents page, tables or colour-coding.

Critics fear the excessive and long-winded terms and conditions used by many banks are yet another barrier preventing savers from getting a fair deal.

If they cannot understand the small print they could be penalised for making too many withdrawals or not realise that their money will be moved to a poorer paying rate after a year.

Fairer Finance managing director James Daley says: ‘We have analysed hundreds of terms and conditions every six months for five years now, and have seen very little improvement.

Most still run to tens of thousands of words.’

He adds: ‘A small number of providers have taken the time and care to get to grips with this as they realise it is the right thing to do.’

Justin Modray, of Candid Financial Advice, says: ‘Banks and building societies should focus on making things simpler, not more complicated, although I suspect the latter tends to be more profitable for them.’

TSB is rated top for its personal banking terms and conditions, which includes ordinary current accounts, with text simple enough for children. But it is nearly 15,000 words long.

Coventry Building Society’s savings terms, although over 10,000 words long, were ranked second for their clear style.

Rachel Springall, finance expert at data analysts Moneyfacts, says banks should offer an easy to understand summary of terms for savers.

She says: ‘It is highly unlikely savers will go through longwinded terms and conditions. But this could lead to overlooking important details of managing the account.’

Money Mail wants to see banks forced to pay a basic savings rate and to end the loyalty penalty where banks pay their best rates to new customers. We are also want a no-hassle switching service and an end to marketing tricks that aim to sell savers unsuitable short-term deals.

Anna Bowes, co-founder of advice website Savings Champion, says: ‘Surely saving needs to be simpler than this?

‘Not only are there hundreds of savings accounts to choose from, but in many cases there are Ts&Cs that could catch out even more experienced savers.

‘Banks and building societies should help their customers by keeping Ts&Cs as succinct as possible and in plain English.’

Ms Bowes warns savers to ask their bank questions to ensure they understand where they are putting their money before signing up to a new account.

She says: ‘If you are not sure, ask questions until you understand the key points.’