If you need to find out an essential piece of info about your bank account, turning to the T&Cs is a daunting process. Yet they’re often into the thousands of words and littered with incomprehensible language.
If you’re baffled by your bank’s small print, you’re not alone. We put the T&Cs of the UK’s eight largest banks and building societies to the test – asking members of the public to find five key pieces of information buried away in the banking tombs. The results confirmed our worst suspicions.
Our candidates failed to find the information they were looking for in two out of five cases. And it took one person more than 17 minutes to find a piece of information in First Direct’s T&Cs.
Lengthy and confusing bank T&Cs
In fact, for the best performer in our tests, only 67% of people answered questions correctly for NatWest’s T&Cs – the worst was Lloyds TSB, in which only 53% of our testers could find the right answers. The results are shown in the graphic below (click to enlarge):
It’s not just searching for the right answers that’s made difficult by your bank. Only one in 10 people told us they’d read their bank account’s T&Cs in full before opening up the account.
Given the length of them, it’s no surprise. HSBC’s T&Cs run to a staggering 29,006 words – just shy of Hamlet, while First Direct’s T&Cs are just over 25,000. If you were handed the financial equivalent of the Magna Carta, would you bother reading them either?
Make your T&Cs clear and succinct
Packed within these lengthy documents were lots of jargon, small text and no contents pages or indices to refer to. And many used terms that just made no sense, or could have been summarised much more clearly. For example, one of NatWest’s terms states:
‘We may transfer, assign, or pass our rights or obligations under this agreement or arrange for any other person or organisation (a transferee) to carry out our rights or obligations under this agreement.’
This could’ve been neatly summarised as; ‘your account could be transferred to another bank.’
Meanwhile, Santander stated that:
‘We can change interest rates providing… we give you no less than 14 days’ personal notice where your account is a Non-payment Account and the change is a decrease to your interest rate that is material…Whether the decrease to the interest rate is “material” will be determined by us.’
This translates to; ‘We can make small cuts to the interest rate on your savings account without telling you beforehand.’
Banking products are complex, so it’s important that banks present their T&Cs in clear, concise, well-indexed and jargon-free documents that are easy for their customers to use. The concern is that people will either be too baffled to understand what they’re buying or sleepwalking into a product that’s not right for them.
Have you read your bank’s T&Cs, and how do you think banks could fix them?