Skipton building society denies ‘sharp practice’ after moving an investor’s money into a new bond
What happens when a savings bond matures? Skipton building society has angered one Guardian Money reader after it took his £37,000 and rolled it into another of its bonds, flatly refusing to give him access to his cash.
George Butler, who is retired and lives in Bedford, has accused the society of “sharp practice” after being told that he can’t access the £37,000 he deposited with the society in September 2011 because it has automatically been moved into a one-year bond, paying an attractive 3.06% interest, but which will not mature until September this year.
He says he was aware the bond was due to mature, but unaware that he would be automatically moved into a new bond unless he asked not to be: “I’d originally chosen a one-year bond as a balance between getting a decent rate of interest and not tying my money up for too long, as I had in mind that we might move house in 2013, and need the money.”
He says that when the Skipton bond expired he was in London volunteering at the Paralympics. He researched the market and found a four-month notice account at another bank. But when he tried to move the money over he was told his cash had been converted into the new one-year bond.
“The Skipton has told me their terms and conditions state that if I did nothing for 21 days after the bond expired the money would automatically be rolled into another bond,” he said. “It was rather buried and certainly wasn’t made clear when I took this out, otherwise I would have remembered. To me it’s sharp practice and unreasonable.”
He says he is not against the principle of moving savers’ money into higher-paying accounts, but believes customers should still be able to access their money, even if there is a penalty of, say, three months’ interest.
On the Skipton website it says: “Our ‘do nothing’ option is a new feature, which continues at each maturity unless you tell us otherwise. Previously our fixed-rate bond customers who did not respond to the maturity notice [were] transferred to an easy access account with a lower rate of interest.”
The society says this warning was in place when Butler took out his original bond. He says if it was, it did not register with him.
Guardian Money raised the case with the Skipton which said its practice of shifting maturing money into a new product is common across the industry. A spokeswoman said: “We emailed Mr Butler 14 days prior to his bond maturing, reminding him that, unless he instructed us otherwise within 21 days, his money would roll over into another fixed-rate bond. We then sent two further emails the day after his bond matured, reminding him his 21-day cooling-off period had begun.
“However, given Mr Butler’s circumstances, as a gesture of goodwill, we have agreed to move his money into a variable easy-access online account we had available last September. This allows him access to his money, and he is happy to accept this compromise.”