Questions Of Cash: Always read the small print on interest rates


Q. I am receiving a paltry rate of interest on my Santander "Easy Isa". Last year, I received just £22.34 interest, compared to £373.79 the year before. I should have been notified of this reduction in interest rate: I would have switched to obtain a better interest rate. ZG, Leicester.

A. A spokeswoman for Santander says: "We were sorry to hear that [the reader] was unhappy with the interest rate applied to her Isa. We can confirm the interest applied is correct and in her statement mailing in 2009 and 2010 we enclosed a booklet advising [the reader] of our current and previous Easy Isa interest rates. Due to global market conditions interest rates have been falling on savings. The reader's account has a variable interest rate and is subject to change. Rates on our savings accounts are available via Santander UK's website, branch literature or by telephone."

We had several complaints last year about Isa interest rate cuts applied by Santander and its then subsidiaries Alliance & Leicester and Abbey. Since then, the banking standards code has been strengthened and backed by law. Financial institutions must now notify customers by letter, email or text of any reduction in interest rates before they take effect. This reader's situation is therefore unlikely to recur – though careful reading of the material sent to her by Santander should have alerted her to the reduction in rates.

Q. I have a two-year fixed deposit certificate with a nationalised Indian bank, Vijaya, paying 9.25 per cent. Does the Indian government give any guarantees similar to the UK's compensation scheme? AB, by email.

A. The Financial Services Compensation Scheme provides a guarantee for deposits held in UK and some European banks, up to a maximum of £85,000 per institution. As an Indian bank, Vijaya is not covered by the FSCS, but it is covered by India's Deposit Insurance and Credit Guarantee Corporation (DICGC), which operates as a subsidiary of the Reserve Bank of India (the central bank). Under this guarantee, deposits are insured to a maximum of 100,000 rupees – about £1,380. So while you are receiving an attractive rate of interest, a high risk is attached to it. We wrote to the company secretary of Vijaya regarding your enquiry but he failed to reply. It is worth noting that one of the institutions consistently near the top of the best-buy tables at present is FirstSave – a Nigerian bank whose accounts are operated in the UK by FBN, which is registered with the Financial Services Authority and covered by the FSCS guarantee.

Q. In 2006, I made mistakes with my finances which damaged my credit records. I am now 37 with a stable life and job. I would really like to get on the property ladder but I cannot because I have two default notices on my credit file. HSBC issued the notices in 2006 but I was not notified. I believe that if HSBC cannot provide an original copy of the letter to me, showing my full name and address, it cannot prove that I received the letter. If I had received the letter, I would have done something about it.

According to Experian, the two default notices are managed by CL Finance Ltd. I have asked CL Finance for a copy of the default letter but it says it cannot remove the defaults. HSBC says the same. I have complained to the Financial Ombudsman Service, which says it cannot help with cases as old as this. I have proof that HSBC wrote to me at the wrong address: it wrote to Flat 2, No 24, when I lived at Flat 2, No 22. It also says the default letter production is automated and is unable to produce a copy of the actual letter. EZ, London.

A. HSBC rejects your argument. It says your account was passed for collection to an agency in September 2006, at which time a final demand letter, including default notice, was sent to your correct address. It says its records are clear and all correspondence from HSBC was sent to the correct address. It was only when a second collection agency took over debt collection that a wrong address was used – more than a year after the original default notice was sent to the right address. You have not told us the value of the debt, but our advice is that, rather than dispute the legality of the debt record, you should instead now take advice on how to negotiate a mutually acceptable package of repayments. Advisers who might assist you include Citizens Advice, the Debt Advice Foundation and the Consumer Credit Counselling Service.

Q. I am having a problem with O2 about my mobile phone contract and data allowances. I upgraded my contract to an Apple iPhone 4 last July, signing up for two years at £30 a month. For this I am supposed to get 300 minutes and unlimited texts and data, and this is written clearly in my contract. I was never told when taking out the contract that there might be a cap on my data usage. I am not a heavy user of mobile data, only occasionally using it for Facebook and internet browsing.

In September, O2 told me it was introducing a cap on the data allowance on my contract, set at 500MB. I have complained repeatedly that it is unfair to amend my contract after it was agreed and I have had to purchase an extra bolt-on to raise my data allowance: every month I either use more than 95 per cent of my data allowance or go over it. JH, Watford.

A. O2 argues that when your contract was upgraded the tariffs "were clearly advertised as having a data cap", with a promotional period of unlimited data that ended last September. We suggest you contact the industry ombudsman, Otelo, to adjudicate on the dispute.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash@independent.co.uk.

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

Suggested Topics
News
The two faces revealed by the ultraviolet light
newsScholars left shaken after shining ultraviolet light on 500-year-old Welsh manuscript
News
Rosamund Pike played Bond girld Miranda Frost, who died in Die Another Day (PA)
news
Arts and Entertainment
books
News
newsHow do you get your party leader to embrace a message and then stick to it? With people like this
Voices
Björt Ólafsdóttir is a member of Iceland's Bright Future party
voicesIceland's Björt Ólafsdóttir on her decision to take part in #FreeTheNipple
Life and Style
The Clove Club will charge customers when they book
food + drink
News
Lapping it up: a woman feeds felines at a cat café in Japan
newsThe vast majority of cat and dog 'wet foods' contain items not specified on the tin, study finds
Sport
Andros Townsend and Paul Merson
football
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
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Marketing Manager - B2B, Corporate - City, London

    £45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Neil Pavier: Commercial Analyst

    £50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

    Loren Hughes: Financial Accountant

    £45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

    Sheridan Maine: Finance Analyst

    Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

    Day In a Page

    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?
    How Tansy Davies turned 9/11 into her opera 'Between Worlds'

    How a composer turned 9/11 into her opera 'Between Worlds'

    Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
    11 best bedside tables

    11 best bedside tables

    It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
    Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

    Italy vs England player ratings

    Did Townsend's goal see him beat Kane and Rooney to top marks?
    Danny Higginbotham: An underdog's tale of making the most of it

    An underdog's tale of making the most of it

    Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

    Steve Bunce: Inside Boxing

    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
    No postcode? No vote

    Floating voters

    How living on a houseboat meant I didn't officially 'exist'
    Louis Theroux's affable Englishman routine begins to wear thin

    By Reason of Insanity

    Louis Theroux's affable Englishman routine begins to wear thin
    Power dressing is back – but no shoulderpads!

    Power dressing is back

    But banish all thoughts of Eighties shoulderpads
    Spanish stone-age cave paintings 'under threat' after being re-opened to the public

    Spanish stone-age cave paintings in Altamira 'under threat'

    Caves were re-opened to the public
    'I was the bookies’ favourite to be first to leave the Cabinet'

    Vince Cable interview

    'I was the bookies’ favourite to be first to leave the Cabinet'
    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat