David Prosser: Proud to be different? Not any more

Nationwide Building Society's halo is slipping. Britain's biggest society has a reputation for fair play; five years ago, it made the ground-breaking decision to stop offering new mortgage customers cheaper deals than existing borrowers. After that, it fought a worthy battle against fee-charging cash machines, and its popular "Proud to be Different" adverts, starring Mark Benton as an evil bank manager, have cemented consumer perceptions of Nationwide as one of the good guys.

However, it seems Nationwide isn't all sweetness and light. Two weeks ago, soon after First Direct said it would begin charging many customers for their current accounts, Nationwide's chief executive, Philip Williamson, refused to rule out doing the same . Then, on Monday, Nationwide unveiled a complete U-turn on its mortgage policy. Different customers are now to be offered different rates.

The society argues that it has broken no promises. People borrowing money to move home - whether they're new or existing customers - will get cheaper deals than those rearranging a mortgage they already have - either from another lender or Nationwide itself. In other words, new and existing customers will still have access to the same ranges of rates.

The argument is disingenuous. For one thing, a greater proportion of new customers than existing borrowers will be taking a mortgage in order to move home. Existing customers are much more likely to be remortgaging. This means more new customers than existing ones will get the cheaper deals.

Moreover, existing customers will be able to see new people joining the society at cheaper interest rates than they can access. This is exactly the sort of penalty for loyalty Nationwide said it was so keen to avoid five years ago.

If you've been a customer of an organisation for some time, there is little that is more galling than seeing it offer new customers something you can't get. Why should it take your business for granted while people who have never given it their custom before get preferential treatment?

Setting itself up as a consumer champion was always a risky strategy for Nationwide. It has further to fall, in reputational terms, than most financial services companies - this week's U-turn is the sort of thing that wouldn't be a surprise had it happened at another company, but the building society was supposed to be better than its rivals.

It's not just the mortgage issue that will worry customers. If Nationwide can U-turn on something as important as this, what else might it be prepared to do?

When Williamson said he couldn't rule out the society ever introducing bank charges, analysts assumed he was just being careful not to say something that could come back to haunt Nationwide in the distant future. But maybe fees for current accounts are more likely than was first thought. And maybe Nationwide isn't quite so proud to be different after all.

I'm pleased that the Office of Fair Trading is to crack down on the methods of doorstep lending, requiring its representatives to provide better information to customers about the inflated cost of their loans. But with so little competition in this market, it is difficult to see prices coming down.

Two weeks ago, after I wrote about the collapse of Farepak, several readers wrote to Save & Spend suggesting that credit unions would be a much safer way for less well-off people to save for Christmas. Quite right. This would seem to be a good time to point out that they can be a much better way for people to borrow, too, particularly for those who normally end up with expensive doorstep lenders.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own