Personal Finances
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10th December 2008

Consumer Council Calls On Banks to Do the Right Thing

The Consumer Council today gave evidence to the Committee for Finance and Personnel to discuss what local banks can do to help consumers and the economy as the credit crunch continues. They also took the opportunity to record their concern at the local banks and the British Bankers Association not making themselves available to meet with the Committee.

Alison Donnelly from the Consumer Council said, “The banks must play fair by consumers and immediately pass on all benefits to them of falling interest rates – this has not been the case.  The Consumer Council is monitoring the behaviour of these banks and building societies and it is important that we continue to shine light on their unfair treatment of consumers.  Our analysis suggests that some customers are being hit twice by; not getting the cut in their mortgage interest rates and simultaneously having their interest on savings cut. 

“We believe that it is unacceptable that the banks have not taken this opportunity to give evidence to the Committee for Finance and Personnel today and give their customers some assurance that they are working in their best interests.  The banks have a responsibility to advise on all the steps they are taking to help consumers at this time.  We share the real concern of the Committee that the British Bankers Association, as the chosen conduit for the banks, is unable to meet with the Committee until the end of January.  Consumers and the economy cannot wait any longer, banks must take action now.” 

The main points raised by the Consumer Council were:

§        It is unacceptable that some lenders have not passed on the full Bank of England interest rate cuts of 6 November 2008 and 4 December 2008 to their customers.

§        Only three banks have so far said they will pass on the interest rate cuts in full to their Standard Variable Rate (SVR) customers.  Five out of six banks are still to let their customers know whether they will cut the SVR rate.

§        The Consumer Council’s analysis suggests that three banks have used the Bank of England interest rate cut to line their pockets by cutting the interest rate given to consumers with money in their account without cutting the overdraft rates they charge customers for borrowing.

§        Consumers need clear, accessible and comparable information on financial products and the support mechanisms and advice to be available to make sense of it. 

The Consumer Council will continue to take a three pronged approach to supporting consumers during this cost of living crisis:

o      Empower consumers with the skills and confidence to make the best decisions about their money;

o      Provide information to consumers to help them make the best decisions about their money;

o      Apply pressure to businesses and the Government to help consumers carry the load of the increased cost of living.

ENDS

  1. Consumer Council media contact: Paula Gunn, telephone, 028 9067 4816 or e-mail, [email protected]
  2. The Consumer Council is an independent consumer organisation, working to bring about change to benefit Northern Ireland’s consumers. The Council campaigns for high standards of service and protection and a fair deal for all. It also carries out research, gives advice and publishes reports and other publications. It deals with individual complaints about electricity, natural gas, coal and passenger transport.
  3. For more information, visit our website at www.consumercouncil.org.uk