The executive director of Which? said he was “shocked” after the consumer group undertook a mystery shop study of 13 major retail banks and building societies, revealing that not a single member of staff was pro-active in telling customers about the Financial Services Compensation Scheme, or warned that only £85,000 would be protected in the event of a bank’s collapse.
Which? tested staff in 13 of the biggest providers, posing as new customers with £100,000 to deposit into a savings account. Even when prompted, at most banks and building societies not all staff knew the correct amount protected by the FSCS, while several admitted they had “no idea” and a third of HSBC staff got this wrong.
Overall, HSBC came bottom with a score of just 51 per cent and Yorkshire Building Society came top with 88 per cent, followed by Britannia Building Society with 82 per cent and Halifax with 81 per cent.
Which? also revealed that many staff did not explain that if customers have savings with more than one member of the same banking group, the full amount may not be covered – only one provider, First Direct, managed to score more than half marks on this question.
Mr Lloyd said he would petition the FSCS to cover individual brands, which people recognise, rather than authorised providers.
He added: “It is inexcusable that bank staff can’t give customers basic information about the compensation scheme if their bank goes bust.
“In the event of a collapse, this bad advice could cost people many thousands of pounds from their life savings. We hope this is a wake-up call to the banks that they need to improve staff training.”
Colin Low, managing director aat Suffolk-based Kingsfleet Wealth, said: “In any correspondence we send to clients, should we notice that they have in excess of £85,000 with one institution, we have a line notifying them of the risks.
“It should be really simple. More shocking still is that we have also seen some existing clients walk into a bank with £100,000 and walk out with £60,000 invested when they didn’t want any risk.”
Right to reply
- A spokesman for Halifax said: “Customer-facing colleagues are required to understand the features and benefits of available products and we have a rolling training programme in place to support them.”
- A Yorkshire Building Society spokesman said: “It is very encouraging to see that Which? has placed us top in this survey.”
- Mark Oakes, head of communications at the FSCS, said: “It is important firms give people accurate information about FSCS and the protection it provides. Front line staff can make a real difference to consumers.”
- Britannia declined to comment, while HSBC had not responded to requests to comment by the time of going to press.
| Which bank staff knew the most about your FSCS rights? | ||||||
| In early 2014, 12 Which? researchers each called 13 banks to test bank customer service staff knowledge of the FSCS. Researchers asked five questions on each call. The table shows the results of four of the five questions we asked – the first has been excluded as all providers failed to tell us about the FSCS unprompted. | ||||||
| Limits | Licenses | Joint accounts | Cash Isas | Total % correct | ||
| Out of 12 | Out of 13 | Out of 14 | Out of 15 | |||
| 1 | YORKSHIRE BUILDING SOCIETY | 12 | 6 | 12 | 12 | 88% |
| 2 | BRITANNIA BUILDING SOCIETY | 11 | 5 | 11.5 | 12 | 82% |
| 3 | HALIFAX | 12 | 4.5 | 10.5 | 12 | 81% |
| 4 | BANK OF SCOTLAND | 11 | 6.5 | 8 | 12 | 78% |
| 5 | NATWEST | 10 | n/a [a] | 6 | 11 | 75% |
| 6 | ROYAL BANK OF SCOTLAND | 11 | 3 | 9.5 | 12 | 74% |
| 7 | FIRST DIRECT | 10 | 7 | 6 | 11 | 71% |
| 8 | THE CO-OPERATIVE BANK | 10 | 4 | 9 | 10 | 69% |
| 9 | SANTANDER | 11 | 0 | 10 | 12 | 69% |
| 10 | BARCLAYS | 11 | 1 | 11 | 9 | 67% |
| 11 | NATIONWIDE BUILDING SOCIETY | 10 | 1.5 | 7.5 | 12 | 65% |
| 12 | LLOYDS BANK | 10 | 1.5 | 8.5 | 10.5 | 64% |
| 13 | HSBC | 8 | 1 | 6.5 | 9 | 51% |
| Footnotes: NatWest was excluded from this question because it doesn’t share a banking authorisation. | ||||||
| Cash savings market study |
Last week the FCA published a letter from its chief executive Martin Wheatley to Peter Vicary Smith, Which? group chief executive, responding to concerns raised by the consumer group that customers were being forced to pay a premium for calling complaint and customer service lines. The letter, dated 13 February 2013, confirmed that the regulator planned a market study of the £1tr cash savings market, announced last October and due to report in autumn this year. In the letter Mr Wheatley thanked Which? for its “interest in working more closely with the FCA” on this study, but said: “We consider it important that where the potential consequence of a study is regulatory intervention, the FCA carries out the relevant research independently.” |
