Customer receives compensation from HSBC
November 26, 2007
A banking customer has received compensation from his bank, HSBC, after making a complaint over the marketing materials relating to the bank’s savings account, stating that it was misleading.
It is thought that the bank’s decision to pay out the compensation to the customers could lead to a flood of claims from other customers using the same savings account. The bank paid out over £100 to the customer after he claimed that the marketing material relating to its 8% savings account was misleading.
Sixty seven year old Ian Kemp, who opened his account last year, thought that he was able to pay £250 a month into the account up to a maximum of £3000 a year, and could earn the full 8% interest on the deposit. However, a couple of months ago he realized that after tax he had earned a sum equal to just 4.31% of £3000 as a result of compounded interest. He made a complaint to the bank about this, and in order to bring the interest up to the full 8% that he had been expecting they made a payment of over £110 into his account.
The marketing material used to promote the account states that customers can pay between £25 and £250 into the account each month up to a maximum of £3000 a year, and that on these deposits they will receive 8% AER. Although interest is compounded, which affects the actual interest that you do earn over the course of the year, the term ‘compound’ is not mentioned in the literature according to reports.
Mr Kemp stated that this was misleading and is urging other savers to claim compensation if they have found themselves in the same situation. 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.’
Alan Wright
26th November 2007
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