Banks told to stop treating customers like zombies

Simon Read
Friday 09 May 2014 23:38

A new campaign is launched today demanding that banks and other savings institutions free people stuck in poor-value "zombie" accounts.

Research by the consumer group Which? discovered that eight out of 10 easy-access savings accounts and cash Isas are zombie accounts. That means they are closed to new business and often pay very low rates of interest.

For instance, 40 per cent of them pay a pathetic 0.5 per cent or less. If that's not bad enough, two out of five of those pay an even more pitiful 0.1 per cent or less.

Meanwhile, a number of providers also have several different versions of the same account paying a different rate to confuse consumers. The Virgin Money Easy Access E-saver, for example, has five different interest rates across 10 different versions.

Which? executive director Richard Lloyd said: "Savings providers should do more to help their customers get the best deal. They need to be clear about interest rates, let people know when bonus rates come to an end and make it easier for people to switch Isas. Banks and building societies must scrap the savings trap and free savers from poor-value accounts."

Which? is demanding that financial services companies "scrap the savings trap".

They want them to close zombie accounts and move people's money into one default easy-access or Isa account at the end of fixed terms.

They also want companies to stop limiting transfers into new Isas and stop leaving customers in the dark about the best return on their savings.

They say interest rates should be displayed prominently on all statements and better offers promoted by staff and in statements.

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