THE wrath of the Office of Fair Trading director-general John Bridgeman has descended upon Northern Rock.
Bridgeman has accused the Newcastle-based bank of taking a cavalier attitude towards savers after the former building society decided to restructure its accounts with the 11 on offer rolled into a choice of three.
The move has left some customers tied to interest rates as much as 2% below that which they had been paid before.
Bridgeman said that the nature of the market is such that interest rates will fluctuate, but that it cannot be acceptable for consumers to be sold a high-interest account and then find that the product has changed to something less
advantageous and that they are locked into it.
He is investigating the bank under the Unfair Contract Terms in Consumer Contracts
Regulations, which will enable him to take the matter to court if he believes consumers are left at a disadvantage by the change of terms.
He added that if he found unfair terms imposed by one bank, it will allow him to look at similar terms in other contracts and that he is prepared to do this if any bank fails to put its house in order.
The OFT has received more than 20 complaints from
Northern Rock customers but the Banking Ombudsman has been received almost 400 objections from angry depositors.
Northern Rock's chief executive, Leo Finn, is to meet with the OFT on Tuesday.
In a formal statement, he said that he believed the bank had acted with the highest standards of probity. He added that the matters the OFT has raised are industry-wide.
A spokeswoman for the Royal Bank of Scotland that it would not be affected by the Bridgeman move as it had four core
savings accounts.
Two new accounts had been introduced last year and depositors in older accounts had been transferred to benefit from both higher rates and reduced notice periods.
The Bank of Scotland said that it was not affected.
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