Questions Of Cash: 'Discount on windows ended up costing me'

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The Independent Online

Q. In December 2008 I took out a finance agreement with Barclays Finance for two UPVC windows I ordered from Zenith Staybrite. I could afford to pay in cash, but the salesman said credit was cheaper – the finance company gave Zenith an "incentive" payment, called the "lifestyle subsidy", for £204, which Zenith passed on to its customers. I was told to obtain a settlement figure after seven months of payments and pay off the debt. But the settlement figure I was given was £976.36, which added to my £100 deposit and seven monthly payments of £17.04 made the total figure I paid £1,195.64 – £65.64 more than the "cash" figure of £1,130. In December I received a goodwill payment of £75 from Zenith, with a letter saying it did not accept responsibility for any problem. JG, Winchester.

A. Andrew Bond, a spokesman for Barclays Finance, says: "It seems there was some confusion around the actual cost of the credit agreement, so to resolve this issue we have refunded the interest paid of £85.24. I would like to apologise for this confusion, but would stress that we don't feel there was any attempt to mislead the customer about the cost of credit." Taking into account the Barclaycard and Zenith goodwill payments, your total cost of the window installation is now down to £969.76 – more than £160 cheaper than if you had paid by cash.

Q. A few years ago I suggested to my wife that she open an ISA with Alliance & Leicester. On her annual statement for January 2010, we noticed she had received a paltry £26.38 interest on more than £11,000 of savings. I knew from The Independent's savings tables that A&L paid one of the best interest rates on an ISA, but on checking I find this is only on the new issue. JC, by email.

A. Several readers have complained about the reductions in interest rates on ISAs taken out with Santander (formerly Abbey) and its Alliance & Leicester subsidiary. Some have also questioned whether Santander is legally allowed to reduce interest rates on ISAs without individually notifying customers. A spokeswoman for Santander says: "We have always informed customers of their rates and interest in the their annual statement."

She adds: "Due to the global market conditions interest rates have been falling on savings. As rates can change frequently, we are unable to inform customers individually of this change. Therefore, we ask that customers check the rates on their savings regularly via our advertisements on our website, branch literature and national financial press. The onus is on the customer to check the interest rates applied to their savings."

However, this may be regarded as a breach of the banking standards code, which specifies that where there is a significant fall in the interest rate paid on a variable rate savings account holding more than £250, then the bank or building society will contact the customer to advise of this "in a reasonable period of time".

Until November last year, the banking code was a voluntary code, without the force of law. Where there has been a loss of interest and a consumer believes this is the result of a breach of the standards code, this can be taken up with the Financial Ombudsman, which may take into account an institution's compliance or non-compliance with the standards code in adjudicating on a case. Since November, the banking code has had statutory force. The Financial Services Authority has also strengthened it and a new code comes into effect in May.

The Santander spokeswoman says: "A requirement, following the FSA takeover of the banking code in November, is to contact customers if there is any material change to the interest rate on their ISA, which we are now doing." When the new banking code comes into effect next month, banks and building societies must communicate to the account-holder any detrimental changes in interest rates (as compared to the base rate) in advance of those rates becoming effective, enabling customers to move money to accounts with another provider. Communication may be by letter, email, or text, according to what is most suitable for the particular customer.

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.

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