Building society calls for early warning on introductory bonuses

Savings account providers operating an introductory bonus should write to customers before their special deals come to an end and they are moved to a lower rate of interest, says Nationwide building society, which has proposed a voluntary code of conduct.

At present, only when an account is opened do providers have to let a customer know the date on which any bonus comes to an end. A Nationwide spokesman said that providers were relying on consumer apathy, with many people failing to switch accounts after the introductory period.

Matthew Carter, director for savings at Nationwide, said: "Some providers seem more interested in boosting profit and achieving 'best buy' status [in league tables] than in offering long-term value to their customers. Homeowners are told when their mortgage deals are due to change and it shouldn't be any different for savers."

However, the chances of the savings industry adopting Nationwide's proposal are virtually nil. A spokesman for the British Bankers' Association said that customers were provided with all the notice they needed on opening an account. Likewise, a spokesman for the price-comparison website Moneyfacts, which produces separate best-buy tables for accounts with and with-out an initial bonus, said Nationwide's proposal "would not receive sufficient support".

One official, who wished to remain anonymous, from a bank that has used introductory bonuses, went much further. He described the building society's proposal as "publicity seeking" and nothing more than a gimmick.

Comments