Consumers call an end to rate chasing

29.06.2005 Customer loyalty is being tested to the limit as financial companies fail to offer existing customers the superior deals used to attract new business.New research from ING Direct reveals that two thirds (61 per cent) of Britons believe they are penalised rather than rewarded for their loyalty by their bank, as new customers are offered better rates on current and savings accounts.

The findings suggest consumers are being forced to take drastic measures as a result of their bank’s two-tier approach to customers. 
A third of (30 per cent) of disgruntled customers have already deserted a financial provider in the last year - four in 10 (41 per cent) doing so as they could not benefit from a deal offered to new customers.  A further 20 per cent will switch in the next 10 months as a result.
Even financially savvy customers are turned off by the constant need to seek out the best rate.  Six in 10 (59 per cent) are calling on the financial services market to put a stop to short-lived, headline grabbing deals, used to attract new business, and instead offers products with consistent rates that are open to all.
However, it’s not just the rate-chasing culture that is having a negative effect on consumers, but also the number and complexity of products introduced to fuel this ‘two tier’ approach to banking.
Worryingly, one in 20 (five per cent) adults are failing to save as the plethora of accounts on the market confuses them into apathy.  This is backed up by a third (31 per cent) of consumers who want banks to offer simpler products to encourage them to save.
Lindsay Sinclair, CEO, ING Direct said: “Consumers are fed up with missing out on superior deals offered to new customers and rightly believe their loyalty should be rewarded.  Our research further shows that the banking population wants an end to rate chasing, with two thirds (60 per cent) saying they shouldn’t have to continually shop around for the best deal and instead want simple, consistently good products.’
“We firmly believe that all customers should be treated equally and should expect to receive a consistent good rate rather than a headline grabbing rate which will be dropped as soon as they’ve signed on the dotted line.”
The ING Direct research asked consumers what they want from a financial provider, with no charges (79 per cent), easy to understand products (78 per cent), easy access to their money (77 per cent) and equal treatment for all customers (59 per cent) among the top requests.
Among the gripes of consumers who have switched financial providers in the last 12 months are, signing up to an introductory deal that was dropped soon after (eight per cent), poor customer service (13 per cent), and no reward for customer loyalty (24 per cent).
The ING Direct Savings Account gives one of the highest rates in the market at 5.0% AER.  Unlike other financial providers, ING Direct is committed to providing a consistently competitive rate to all customers and has done so since launch in 2003.
May 16th 2005