Rock caves in to OFT

NORTHERN Rock, the former building society turned bank, yesterday announced a complete surrender after becoming the target of an outspoken attack by Office of Fair Trading over the way it cut interest on savings accounts last month but left customers liable to interest penalties if they wanted to move their money elsewhere.

All notice periods on its savings accounts will be suspended for 30 days from today, so that savers who are not happy with their new rates of interest will be able to transfer or move funds without penalty or notice up to the close of business on 18 June.

Northern Rock has also pledged to write to individual account holders every time it changes rates or launches a new product in future. With immediate effect they will receive written notice of any changes at least equivalent to the notice period on their accounts, allowing them to move money without penalty.

The move came after Northern Rock shares slipped a further 20p yesterday morning, bringing total losses since the OFT launched its attack last Friday to 70p. The shares later rallied to close 6.5p down on the day at 548.5p. The OFT will continue its investigation into unfair treatment of savers by banks in general.