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 HSBC pays up over unfair 8 percent account
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Posted - 23 October 2007 :  10:03:26  Show Profile  Reply with Quote
HSBC pays up over 'unfair' 8% account

HSBC could face a rush of claims after it paid more than £100 in compensation to a customer who complained that the marketing material on its 8% Regular Saver account was misleading.

Ian Kemp, 67, opened the account last summer in the belief that he could pay a maximum of £250 into it per month and receive 8% (6.4% after tax) on the maximum deposit of £3,000 at the end of the first year.

However he learned in August that he had received a sum after tax equal to 4.31% of £3,000, as the interest was compounded over the year.

After complaining to the bank several times, he received additional payment of £110.58 to bring his total return to £240 or the full 8% of his £3,000 deposit.

In promotional literature for the account, HSBC says that the Regular Saver offers an annual interest fixed rate of 8% AER and that savers can pay in sums from £25 to a maximum of £250 each month.

The account interest is compounded, which means if you invested £3,000 over 12-months, you would only receive interest on the sum as it accumulated over the course of the year. However the word 'compound' does not appear in the marketing material.

Ian, a retired sales manager with an international mining company, who divides his time between Hailsham in East Sussex and Israel, said he felt that the advertising for the account was misleading and said other savers should appeal.

He said: 'When they were selling me the account, they said it pays 8% and didn't mention anything about compound interest. They said it would pay 8% at the end of the 12-month period.'

HSBC said bank accounts only only ever pay interest on the sum held in the account at any given time and no bank account would pay interest on £3,000 unless the entire sum was deposited in an account for a year.

However in two separate calls to HSBC's savings account helpline, This is Money was told the account was not compounded and paid 8% interest on the balance held on the first anniversary of its opening.

Source: thisismoney.co.uk

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Posted - 16 February 2010 :  00:05:28  Show Profile  Visit bankinol's Homepage  Reply with Quote
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Edited by - Skippy on 16 February 2010 08:48:50
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