Questions Of Cash: Unhappy customers are kicking the Abbey habit

Over recent months, Questions of Cash has received a string of letters from readers regarding Abbey's treatment of its customers.
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Q. I recently bought a flat and needed to transfer £15,000 from my Abbey savings account to my solicitors, via an electronic transfer. Because my passport and driving licence were with my solicitor – due to money laundering regulations – I presented Abbey with my birth certificate, a selection of the bank's cards and statements and some utility bills.

I was told none of these were sufficient ID – due to money laundering rules. I was told that the bank could not authorise a transfer of £15,000, but it could authorise three transfers of £5,000. I would be charged three fees, totalling £60. Is this just Abbey ripping me off? AW, London.

A. "If the staff in the branch felt there was sufficient identification to carry out the transaction, they should have processed it normally and you would only have been charged one fee," says Abbey's senior customer resolution manager Ray Charters. "Assuming that, because of system restrictions, they had to process three transactions, arrangements should have been made to only charge you for one." He apologises and says that the matter will be taken up with staff at your branch.

The Financial Services Authority confirms that your problems stem from Abbey's staff's interpretations of the bank's own money laundering rules and are not directly related to FSA guidance on money laundering. Abbey is refunding you the full £60 fee.

Q. My husband and I have had a joint account with Abbey for 10 years. This month we accidentally became overdrawn, for the first time, by £67. The charge for this is £120, based on £30 a transaction.

One of those transactions was a £2 donation to charity. When I spoke to Abbey I was transferred to its call centre in India, which gave me an incorrect customer complaints number. After calling again I was cut off. AM-W, Huddersfield.

A. Abbey points out that the charges were in line with its terms and conditions, and says no errors were made. It has reversed one charge of £30 as a gesture of goodwill, but is not prepared to rescind the others. It apologises for your problems with its call centre in India, but says it is staffed by "experts", with a senior management team "whose overriding priority is to ensure the highest levels of service". Your reaction is to say that you intend to move your account. You should read carefully other banks' terms.

Q.I opened an account for my two children in August 2002 to receive a payment from an Accumulation and Maintenance Trust set up by my father's estate. An Action Saver Account was recommended by Abbey, which I opened. In the first year this earned interest of £1,000, but in the second year it only earned £100, despite there being no withdrawals.

When I queried this Abbey said the account had been re-designated to a type paying only 10 per cent of the original interest because my eldest child was 16 in August 2003. I pursued this with Abbey's customer services – it took two months to respond before saying no compensation would be paid. This is despite one of my children still being under 16. My children have now lost £2,100 interest. KD, Wickford.

A. Abbey believes it acted properly. It says that the terms and conditions of the Action Saver account you opened made clear it was only available where all account holders were under 16.

Abbey also says that it would have written to you six weeks prior to the balance being transferred to an Instant Saver account, although it recognises that you have no recollection of receiving this letter. Given the continuing disagreement, we suggest you take your case to the Financial Ombudsman Service.

Q. Early in 2003, I opened a cash ISA with Safeway, administered by Abbey. Later that year I increased the amount in the Safeway ISA. In July last year I opened a cash ISA with Abbey and transferred my Safeway ISA to it. But my Abbey account statement showed that only one of these Safeway deposits had been transferred. I wrote a complaint last August, but apart from one letter of receipt I have had no response, despite further letters. WM, Surrey.

A. Abbey has now completed the transfer and is crediting your account with the additional interest that would have been paid if the transfer had been conducted properly.

We suggested it would be appropriate to pay additional monetary compensation given its failure to respond to your correspondence, but Abbey declined, pointing out that you had now agreed to accept its offer to pay the lost interest.

Q. I have a mortgage and insure my buildings with Abbey. I live in a house with a self-contained attached annex. I let the annex. Until two years ago Abbey insured the whole property as one. Now it insists I insure the house and annex separately.

After a "rebuild valuation" with the buildings insured separately the total premium went down. But on my latest renewal – through CGU – while the house premium increased by 7.9 per cent the annex premium increased by 140 per cent, from £342 to £822. AT, Egham.

A. Abbey argues that the increases are a result of new regulations from the FSA, under which it must "ensure the products we offer are appropriate to the purpose".

The impact of this is that premiums for properties that are being let on a long-term basis can only be reinsured if premiums rise heavily. You have now insured your property through Hiscox for slightly more than you were paying before Abbey's premium hike.

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