Banks and building societies should immediately refund the £12.8 billion in lost interest to consumers who have missed out on payments because their “teaser rate” of interest has expired, a leading law firm said today.
Banks and building societies increasingly offer relatively high savings rates that expire after a year, leaving customers languishing in accounts paying low returns.
The Financial Conduct Authority has just announced that it will investigate the conduct of banks and building societies and focus on how clearly the offers are explained and how customers are treated when their account interest rate falls to a lower level.
A team of solicitors from Slater and Gordon Lawyers working on bad banking practices and behaviour are already working on a case where a saver missed out on interest after Nationwide Building Society reclassified an account with substantial funds as non interest bearing.
Slater and Gordon Head of Group Litigation Fraser Whitehead called on the Financial Conduct Authority to demand the banks and building societies pay full compensation to the individuals who have been disadvantaged by these “teaser rates” and other bad practices over interest rates.
Fraser Whitehead said “Ordinary savers have missed out on millions of pounds in interest because of a lack of transparency by the banks. Now is the time for the FCA to take a different tack and start this review with a hard line approach to this bad behaviour and ensure a speedy and just result for the thousands of savers who have unfairly lost out on interest as a result.
"This is just the latest example of the banks’ culture of greed and the ‘it’s our right to take it’ mentality which appears to be ingrained in their management ethos and which has already seen thousands of ordinary small business owners and consumers mis-sold financial products they neither needed or wanted.
"It’s up to the FCA to hold the banks and building societies accountable for their destructive actions, but above all to ensure redress is delivered quickly and that means without any delay. The banks and building societies took the money at a stroke and it should be returned at a stroke.”
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