On April 8 2011, whilst doing some banking as POA on behalf of my mother inside her Halifax on-line bank account, I was tempted by a banner advertisement which purported to be a promotion for a new limited offer account called the Web Saver Reward with an interest rate of 2.8%, paid annually.
At that time my mother had a savings account with Halifax delivering 2.3% interest, *holding about £40,000, so it seemed sensible to take advantage of an extra .5%
Clicking the ad. led straight to an on-line application form, entitled Variable rate Web Saver Application.
Within that form there was a question:
Would you like a cash card? With Yes and No button options.
I clicked Yes ( even though we didn't really require one – and in the event, never used it...). By doing so, I inadvertently reduced the interest rate to .25%. I did not realise that I had done this for almost a year.
The account that opened on April 8th*was visible in my mother's internet banking and titled Reward Saver. For most of the next year it had a balance of around £50,000.
When I discovered in March 2012, that the interest rate was much lower than I thought it should be, and there was no discernible reward, I contacted Halifax Customer Services, who told me that it was because I had clicked the card option. That had apparently converted the account from being a Web Saver Reward into a Variable rate Web saver.
I wanted proof that I had made an error, and so they sent me screen captures of the application that they said I would have filled out. Twice they sent me the wrong ones, because they sent me versions that would only have been visible either to new customers, or to someone not logged in.
Finally they sent me screens that would have applied to someone who was already logged in.
On the screens there was among the small print at the top of the form:
Important: Please note that if you are applying for a Web Saver reward you must select the no card option.
These screens may have been the application we filled in – but it is impossible to verify as they are not dated.
They were the only screens Halifax ever sent us which showed the application process for someone already logged in.
We had already requested and been sent the wrong screens twice.
(The wrong screens were also later sent to the financial ombudsman...)
I note that they amended the application form for new customers and those not logged in 9 times
between the date that we applied for the product in April, increasing the emphasis each time until August 7th,
when they finally made clear that selecting the card option reduced the rate.
Excerpt from August 6th application:
IMPORTANT: Please ensure that you select the no card option within the application form.*
Choosing a cash card will open a*Variable Rate Web Saver*with a rate of 0.25% AER variable.
This last re-vamp was perhaps as a result of Halifax's admission that their application could be clearer and their promise to review the application form,
made after Jo Thornhill published her article on thisismoney:
*Beware catch on Halifax online savings account - one wrong click and your rate drops 0.25%
on 3rd July 2011
At the time that we applied, we were not aware of the importance of selecting the no card option.
There was no clue given as to why it was important, and I missed the small print Important disclaimer at the top of the form.
It was difficult to discern the name of the product being applied for: Web Saver reward, or Variable rate Web saver.
I expected the application form to be product specific – and there was no clear presentation of the fact that customers would be
applying for a different product if the wrong option was clicked.
The warning is in a very small type size, given far less prominence than the 2.8% rate promised on the banner which it contradicts.
When I did click the card option, no tooltip arose to warn us of consequences.
The product we received was titled Reward Saver, not Variable Rate Web Saver, and so appeared to be what we had applied for.
There was no obvious clue that we had switched products and would be receiving a lower rate.
Throughout the gruelling complaints process, we requested that Halifax send us a copy of the original banner ad.
They first ignored our request and finally refused, saying they couldn't.
We requested that the Financial Ombudsman request it, but if they requested it, it was never sent to them either.
From Halifax advertising stored on the on-line archive ,it is possible to see the 9 increases in emphasis that took place in the application form
for new customers between April and August 2011. It is available to view them, but as I'm new here - I can't post links -
all the archived versions of the application that I could find are for new or unregistered customers only.
The archive reveals that the bank were aware that the product was misleading.
As the unnamed Halifax representative said in the Jo Thornhill article: '‘We accept we could make the process clearer.”
However despite their own admission and the concerns raised on-line, their avowed policy of 'Giving a little extra help' did not include contacting customers
who had taken up the product to check whether they were receiving the rate they expected.
Anyone viewing our account set-up might have thought it strange that we had moved £50k out of an instant access savings account earning 2.3%,
into a 'Reward' account earning only .25%...
but previous ineptness at the branch had discouraged us from ever doing business there
– and Halifax appeared to find it impossible to set up and maintain telephone banking on a POA account.
So there were few opportunities for anyone but ourselves to view the account.
It appears that had we not already been an on-line banking customer, we would have been provided with much more complete information.
This would have been less misleading, especially if we had applied after August 6 2011.
(This does not explore the business ethics of pretending you are giving extra help,
but then using an application form designed for one account to serve as the application form for another,
instead of creating a separate form.
But it is clear from the textual additions made that Halifax had the capacity to adjust the code, and thus could have made the application clearer, much sooner,
by highlighting the rate drop, adding a tooltip, etc. They just chose not to – at least until after August 6, and the appearance of the article on thisismoney.co.uk.)
I would suggest that Halifax advertising is thoroughly misleading and dishonest.
Not only did it inform us that applying for the Reward Saver will deliver a Reward of 2.8% interest
- and kept silent about the catastrophic drop in interest if one clicked the card option,
but their messages are underpinned by the corporate messages: 'A little extra help'. 'Always giving you extra', and the Bank of Scotland's 'With you all the way'.
In our view, Halifax and particularly Halifax customer relations have been the diametrical opposite of these sentiments.
We have pursued our complaint as far as we can; Halifax Customers relations now refuse to speak to us beyond saying that the complaints procedure has been exhausted,
that they they are bound by the decision of the financial ombudsman (although the ombudsman says they are not...)
and refusing to allow us to view the offending ad. They say they 'can't' do this.
Halifax withdrew the Web Saver Reward on 10 Sept 2011.As a result of their misleading promotion we lost somewhere in the region of £1000.
Do you think that may be found to have breached BCOB standards and we might succeed in a court case?
We look forward to hearing your view, thank you,