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Pensions minister calls for FSA action on “misleading” banks

Pensions minister Steve Webb has called for the FSA to intervene to stop banks offering “misleading” savings accounts.

In an interview with The Telegraph, Webb said pensioners were being offered poor returns from accounts with labels such as “gold”.

He said: “Some of these accounts’ labels are highly misleading, the FSA and others need to make sure they are doing a better job here.”

“There are an awful lot of pensioners getting 0.1 per cent or something on a ’gold’ savings account or one of these other ludicrous labels.”

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There are 12 comments at the moment, we would love to hear your opinion too.

  1. An interesting example with “Gold Savings accounts”from Steve Webb however one of the features of holding Gold as an investment is that it pays no income, no dividends or rental income so in this example the Bank’s are perhaps not being as misleading as he suggests.

  2. The Nat West ‘paper and string’ or silver ‘account. Maybe people are just too ‘status’ obsessed and the banks realise they are stupid enough to be taken in by this marketing, ‘Gold’ ‘Silver’ ‘Platinum’ ‘Premier’. Similar with airline loyalty cards, blue, silver, gold, black and credit cards. Time for people to ask what they actually get and will they actually use the services they are paying for.

  3. Mr Webb later called for a ban on bears nipping to the toilet in the woods and requested that Judith Chalmers gave up her passport.

  4. Tis has been going for years and only just noticed! I dont beleive investors are that naive; However i would agree that a product name should give some idea of what the product is aiming to do.
    How about the lead balloon account, or the risk free rollercoaster investment fund. Gauaranteed to take your breathe away.

  5. Nice try Steve.

    Obviously, don’t hold your breath.

    Interest rates will be 8% eventually and then the problem will have gone away…

  6. Yeah right, the FSA will listen to a here today, gone tomorrow politician.
    What other futile gestures will we be reading about this week?

  7. This has been going on for years but it doesn’t mean it’s right.

    The language used within building society accounts should be clearer and there should be a greater emphasis on the building societies and banks to make their clients aware that interest rates on these accounts suddenly drop after the special offer.

    This is a shameful practice that has gone on for years and has been made worse with the muddying the water with structured bonds being sold like deposit accounts

  8. I wonder what the reaction would be if MPs had to prove Level 6 competence in “everyday reality”.
    If the FSA can’t cope with banking crisises and risk management I suppose getting them to read every piece of bank, insurance and investment literature would give them something to do they could cope with, though I doubt it would justify their salary levels – or make any real difference to life outside Westminster.
    Do we really pay Ministers that amount to be so dumb.

  9. Now isn’t this the guy that was telling us all a few months back how well his mother had been served by her bank vis a vis savings and investments. Perhaps now a few months into the job the ‘scales are falling from his eyes’; it is a shame that with such naivete he was launched into and remains in such an influential position. Mind you, as Pensions Minister he has lasted than most under the previous regime, almost everyone ‘had a go’. BTW, what is the Pensions Minister pontificating about savings accounts for anyway?

  10. Why is it that when a politician makes a constructive suggestion, there are those who can’t resist making a destructive and pointless comment ? [e.g. ‘old dog’ ]

  11. Here we go again – nanny state – for goodness sakes if the elderly have managed to get through life and accumulate some capital, surely they still have the intelligence to check the interest rate they are getting and not rely on pretty colours or nice names to entice them? Are we seriously suggesting that customers are completely thick & uneducated? If so, that kind of explains why the dole queues are so long, and the state of the economy in this country. Come on folks, we don;t need more regulation and more politicians interfering in this industry, what we need is better education for the consumers of tomorrow.

  12. Premier Shareholders Group 22nd September 2011 at 7:25 am

    A financial product’s name (or a company’s trading title) should provide the public with accurate indication of the product’s services.

    The Isle of Man based Premier Low Risk Fund plc gave pensioners an indication that the fund’s investment strategy is “low risk”.

    A high court judge ruled that it is “high risk” (using bank loans up to a value of 50% of the fund’s net asset value to speculate in TEPs)

    The Isle of Man “regulators” refuse to take any action

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