Loyalty is not often rewarded by financial institutions. We take a look at three big names with reputations for taking care of their customers.
When I was talking to some of my colleagues yesterday about how loyal Nationwide customers are, they started talking about its TV adverts. I just nodded and grinned, then watched one on the Internet later to find out what on Earth they were talking about.
Watching the advert did two things. Firstly, it reminded me why I got rid of my TV. Secondly, it showed that Nationwide has nailed its colours to the mast when it comes to treating existing customers just like new ones. But then again I've read from several sources today that Nationwide had done a U-turn on its 'New Customers Only' campaign.
However, it seems that the authors of these reports were jumping the gun a bit. Nationwide is bringing out a new range of mortgage products from 1 December, but existing customers will be offered exactly what new customers are offered.
According to David Hollingworth of mortgage broker London & Country, the main change is that, if you're getting a mortgage to purchase, you'll be offered different products (i.e. different interest rates and fees) than if you're remortgaging. However, an existing customer will be offered the same products that a new customer is offered, e.g. if you're remortgaging, you'll be offered the same deal as a new customer who is remortgaging.
Hollingworth also said that there's not a great deal in it between the purchase and remortgage products, although this may change in future; for example, if Nationwide wants to get more remortgage business then it'll offer better remortgage rates.
Nationwide throws in a sweetener for existing customers, who will get a £100 discount from the arrangement fee.
I still think it is living up to its advertising promises and the new pricing structure is not a concern. Halifax has been doing it for years. Nationwide's only mistake was to not make this clear.
The same can't be said for some other companies though. We usually find that existing customers are scorned, derided, disdained, left in the dirt, kicked when their down, and then pointed at and laughed at.
Two other consumer champions are said to be First Direct and ING, which have both acquired respectable followings. These companies have shown a different side recently, however.
In Is Free Banking Doomed? we explained that from 1 February 2007, if First Direct current account holders fail to maintain a balance of £1,500, or if they don't pay in at least this amount each month, they will be charged a monthly £10 fee, unless they get another First Direct product, such as a credit card or a savings account. From being one of the best liked banks, it has now upset a lot of people.
ING customers have also been given cause to grumble. It recently decided that it was not going to raise the interest rate on its savings account, despite the Bank of England base rate going up by a quarter of a point earlier this month to 5%. After maintaining a decent interest rate for many years, it now lags behind with a rate of 4.75% AER. However, other easy-access savings accounts pay as much as 5.45% AER.
So while Nationwide's reputation for good value appears to be intact, First Direct and ING are at risk of losing theirs.
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