Lloyds TSB - Do they need to advise you of interest rate increases/decresses?

[blackpoppy]

My son has a savings account. It's been open for 5 years and has been paying 0.5% interest for the last 3 years. Apparently for the last year Young Savings accounts have been paying 3.0% but my son was still only receiving 0.5%. Does anyone know if it's a legal requirement of the bank to advise the customer that their rate has gone up or down? It's only when I opened the same sort of account for my daughter 3 weeks ago that discovered the problem. The bank said they would look into it and to expect a phone. Of course I've heard nothing and am now chasing them but not getting anywhere!!

Any advise would be greatly appreciated.

Have they got exactly the same sort of account? Is the 3% a one year introductory offer?

No longer advising you individually.

They must advertise rate changes in newspapers I think.

Am just looking at it and it says 3% up to 20k and 0.5% on any balance over 20k. Also, is your son under 16?

Thanks for the responses LadyKooKoo & PerAspera

LadyKooKoo, yes they both have the Young Savers Account. The interest rate doesn't seem to be an introductory offer because when I pointed out that I wasn't receiving 3% on my other child's account he amended it immediately. My problem is for the last year I have missed out on the difference in interest on £6000 and I feel like they should back pay the amount I missed out on! My son is 5 years old and it was a gift from a family member.

Just kicking myself that I hadn't looked into it sooner!

When did you open the account? I found this showing the 3% is only for accounts opened since August 2011.

If they have amended it now then I would suspect that they can backdate it to August 2011. If they can't do it over the phone for you then get an address to write to.

Once you have what you are entitled to then look at this for an even better rate moving forwards.

Thanks for your advice Lady, those links are very useful!

Lloyds customer service has never been great but I feel after this last experience I want to close all my accounts and move elsewhere.

I have a feeling though that they are all the same!!

Very grateful, thanks again

Yes we do have to inform you of a change of interest rate usually by letter but if you choose to ignore or not read the letter as most customers do we do not have an obligation to put you onto a better rate. It is the customers decision to either call us to discuss further savings products or leave as it is. Harsh I know but we have millions of cust some with several savings and to phone each individually would take the whole of telephone banking off of normal calls to deal with it and as a business that is not feasable as there would be no one to ans normal day to day calls.

sarahih what you're saying totally contradicts itself.

"we do not have an obligation to put you onto a better rate" because the system can't cope.

The minute interests rates decrease the "system" seems totally capable of dealing with automatically moving customers onto the lower rate. You can't have it both ways!

Banks could help themselves by providing a better service to their customers instead of the corrupt system they are dealing us with currently. I'm not one of these people who generally see the bankers as the "bad guys" but there are still not enough systems in place to protect the consumer.

blackpoppy - there is no contradiction. The bank has no obligation to move you on to a better rate full stop. it's nothing to do with whether the system can cope or not and as you point out the system could almost certainly cope - it's just not in the bank's interest and they have no obligation.

sarah's point about system's not coping was in that they couldn't phone everyone to check whether they wanted to be moved onto the better rate.

a more sensible approach might be to assume that everyone would want the higher rate unless they told you otherwise - but this would cost the bank more so clearly they won't do this unless they have to.

it's another reason why you shouldn't ignore letters from the bank, even if they look like junk mail.

I've always assumed that it's primarily my responsibility as a customer to make sure I'm getting the best deal. That applies to financial products the same as is does utilities or consumer goods. Every so often it's important to take stock and shop around rather than rely on the provider to alert you to the best deals.

I'm sure that I read that it is our responsibility to check our accounts on a yearly basis - to ensure that we are getting the best rate available.

Interest rates are published in newspapers and are readily available on the internet.

Chages in rates must be advertised in 2+ national press/newspapers and if there are changes to the product then they are supposed to write to you (or email these days I suppose). Well that was the rules when I worked in banking many moons ago.

Just so it's clear I haven't ignored any post or emails. I just haven't received any communication from the bank on this matter. Mind you if they do only need to advertise in the newspaper I may have missed it.

Anyway, thanks for all your advice posters! I think it's a lesson learnt the hard way and if anything I feel most annoyed at myself for not paying more attention.

I'm slinking off now to check my other accounts and to check out some of those 6% ones that Lady mentioned :)