Savers losing £3bn because of misleading marketing, says consumer group

Savers could be losing up to £3bn a year because of misleading promotional campaigns, according to an independent consumer watchdog.

Consumer Focus claims banks and building societies are “luring in” new customers for their tax-free ISA savings accounts with “bait pricing” – headline interest rates that lapse and leave customers on “uncompetitive” rates of interest.

Banks and building societies spend most of their ISA marketing budgets in February and March ahead of the end of the tax year on 5 April. According to Consumer Focus, advertising spend on cash ISAs in 2008-09 was £9.7m with the most money (50%) spent on press ads.

The consumer group makes its claim in a “super-complaint” lodged with the Office of Fair Trading (OFT). A “super complaint” made to the OFT must be investigated and responded to within 90 days.

In it, the group claims that “bonus” headline savings rates in excess of 3% often drop significantly to less than 0.5% after a year. It adds consumers are less likely to switch their account to another provider because they are “baffled” by the lack of information provided about their interest rate or account name and put off by “unfair” bureaucratic barriers

The group estimates that consumers who do not switch to ISAs with better interest rates could be losing 1-2% interest on their savings, which equates to between £1.5 and £3bn per annum in lost interest.

A spokesman for the British Bankers Association says that Consumer Focus has “chosen to launch its super complaint without any discussions with the banking sector”, which he claims is working with banking watchdog, the Financial Services Authority, to “help ISA customers”.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here