Loyalty doesn't bring its own rewards

Loyalty doesn't bring its own rewards

An Abbey customer of more than 16 years has slammed the Spanish-owned bank for failing to offer its best savings rates to its existing customers. Barry Farleigh contacted us after reading about Abbey's new top-paying eSaver Direct account - currently paying 6.5%, the second highest rate on the high street - in last weekend's Guardian Money.

The student recruitment manager, who works for London South Bank University and who has banked with Abbey since around 1992, read the piece and immediately thought he would move a substantial sum over from his existing Abbey account which, he says, pays just 2.5%.

"When I phoned on Saturday I was told that the new account paying 6.5% was only available to existing savers who were moving money into Abbey for the first time.

"I was expressly told that I couldn't move the money over from an existing Abbey account - it had to be from an account at another bank. The best rate they said they could offer me was 5.5%.

"I couldn't believe it - it was like those [Nationwide] adverts on the television which show the customer being made a fool of by the rude bank manager who claims to have caught the new customer like a fish."

He says his complaints to various Abbey departments met with deaf ears - and a look at the eSaver Direct account's terms and conditions shows why. In the small print, it clearly states that "the account is available to new and existing customers depositing money not previously held with.....continued below

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Abbey", although this failed to appease Farleigh.

The move is particularly strange given that there is nothing to stop Abbey savers from moving their money to a rival bank, then switching it back to Abbey's higher-paying eSaver account.

"I'm very unhappy about this and am seriously thinking about quitting Abbey altogether. It makes no sense to me to offer great rates to new customers while penalising its loyal customers, many of whom have been at the bank for years. In my case I'll probably be moving the money to the West Bromwich Building Society, which is paying a higher 6.55%.

"If all the other Abbey customers did the same, they would have a Northern Rock-style run - and then they would be forced to reconsider this ridiculous stance," he says.

A spokesman for Abbey defended the clause in its terms and conditions.

"We believe we offer a competitive range of savings products for both existing and new savers - especially considering that saving is about more than just a headline rate.

"We believe our financial strength and facilities - such as our extensive branch network - are very attractive. Of course it's disappointing if Mr Farleigh wants to move his money away from Abbey - however, we still believe the total package we're offering him is more attractive than West Bromwich's," he said.

One of the outcomes of the credit crunch is that banks are increasingly putting such caveats on new savings accounts in a bid to bring in new cash reserves.

Last month Alliance & Leicester launched a one-year fixed rate savings bond paying 7%.

Again, existing customers were barred from transferring over savings from other accounts. The bond sold out in a matter of days.

guardian.co.uk © Guardian Newspapers Limited 2008