Super-complaint: Cash ISAs
On 31 March, Consumer Focus launched its first Super-complaint (PDF 995 KB) on the subject of Cash ISAs.
What is a super-complaint?
In the Enterprise Act 2002, consumer bodies were given the power to make super-complaints to market regulators if they think a market appears to be significantly harming the interests of consumers.
The Act specifies that the Secretary of State decides which consumer bodies have super-complaint power. A super-complaint must meet the criteria set out by Office of Fair Trading (OFT) guidance and legislation before being issued.
They are a powerful tool available to consumer organisations to ensure that regulators and Government look seriously at an issue, shed light on a market and, ultimately, act to address the problems that are occurring. Super-complaints are used as a last resort when all other avenues have been exhausted, and when no other solutions present themselves.
There is an online survey if anyone wants to provide feedback on their experience of cash ISAs – good and bad.
We have received the following messages of support for our complaint:
UK cash ISA market not functioning for consumers, agrees Which?
As Consumer Focus issues a super-complaint to the Office of Fair Trading (OFT) about the UK cash ISA market, Which? chief executive, Peter Vicary-Smith, says,
‘For the market to function properly, consumers need to know what interest they are receiving and to be able to shop around and transfer their money in order to get the best deals.
‘For too long, consumers have had to endure savings rates being reduced by stealth and lengthy delays in transferring between ISAs to get a better interest rate.’
Martin Lewis, from MoneySavingExpert.com
‘Historically low interest rates mean the millions who rely on savings for income, now earn derisory amounts. That’s why we desperately need action against companies who profit by keeping savers in the dark; they deliberately avoid printing the interest rate on paper and online statements to stymie competition, and launch many similarly named accounts so even looking up the rate is an exercise in confusion – over 30,000 signed our petition objecting to this practice. Even if you do get through that miss-mash, the process of transferring to increase rates, especially in the cash ISA market, is a nightmare. It’s a delight that Consumer Focus has decided enough is enough and are going to tackle this head on.’
Consumer Panel welcomes Cash ISA super-complaint by Consumer Focus
The Consumer Panel welcomed today’s action by Consumer Focus, to stand up for consumers in one of the many areas where it seems consumers are not getting a fair deal from their bank.
Adam Phillips, Chairman of the Financial Services Consumer Panel said:
‘Here is yet another example of banks being more interested in making money than in their customers getting a fair deal. We have seen it with sales of PPI, with unauthorised overdraft charges, and now with cash ISAs. We fully support the action of Consumer Focus issuing a super-complaint to the OFT on the basis that the market is not working for consumers.
‘At the same time we will press the FSA to take action. It cannot be a fair outcome for consumers – or what the Government wanted to achieve in providing this tax incentive – that people end up with little more interest from their tax free account than they would get from an ordinary account.’