Auto rollover of fixed term deposits

Discussion in 'Deposits' started by carmel65, Dec 6, 2016.

  1. carmel65

    carmel65 Registered User

    Again just looking for some advice regarding a problem I have with Permanent TSB.

    I invested an amount in a one year fixed deposit account with TSB in September 2014. When it matured in September 2015 I reinvested an smaller amount for a another 12 months, I did this transaction online.

    Unfortunately I did not notice at the time that reinvesting online resulted in my money being invested in a different account type.

    The accounts are identical in every way including the interest rate, however there is ONE fundamental (and crucial for me) difference between these two account types

    1) one year Fixed deposit account
    If we don’t hear from you before your fixed term account matures it automatically converts to the Instant Access account for matured fixed term deposits until instructions are received from you

    B) one year Online fixed deposit account
    After the term you will have the option to roll over into the same account again at the rate available at that time. If this account is no longer available, your account will roll over into a similar term product unless you instruct us otherwise.

    I suspect that the online process required me to tick a box, but I can not be sure. I had only ever reinvested previously in my branch.

    The only communication I ever received regarding this account was a letter on 15 August 2016, 11 months later, thanking me for opening my account?

    My money automatically rolled over in September, while I was out of the country and I only received the maturity letters on 1st November, and as I expected my money to move to an instant access account, I did not make any arrangement before I went away.

    It was never my intention to roll over this money. It is not an option for me to lock away this money for another 12 months. A product such as this, would clearly have been unsuitable for my needs, as I need immediate access to this money for day to day living expenses and as I travel regularly, there would have been a high possibility that I would not be in the country when it matured.

    I have been through the TSB complaints process, but no luck.

    So now I am gearing up for taking the matter to the Finacial services ombudsman and/or the small claims court.

    Any help or suggestions would be most appreciated. Some questions I have are ;

    Should I have received a cooling off notice in September 2015?

    Should this have highlighted the changes to the terms and conditions?

    Should I have been given the option to "opt out" of the automatic rollover.

    Is it "fair" that this fundamental and key difference in the account type is buried in the small print and not brought to my attention in a "clear, unambigous and prominent manner".

    I know that these days it is a case of "buyer beware" with regard to all Financial services, but you would have to ask why Permanent TSB choose to have only ONE difference for the same product depending whether it was and opened in the branch or online?

    Why do Permanent TSB think that someone who invests for money for one year in the branch wants no automatic rollover, but someone who invests money for one year online will benefit from an automatic rollover?

    Is the difference betweeen the two accounts in the best interest of the TSB customer? or is there another reason why they have altered this one specific condition on this account type?

    Is it misleading that only way you can tell the difference between the two products is the ambiguous use of the word "online".

    I know I should have been more careful, lesson learned, unfortunately I come from a generation that "trusted" financial institutions, sad to say those days a clearly long gone.

    I would really appreciate any suggestions as to how best to progress this.
  2. CiaranT

    CiaranT .

    Last edited: Dec 7, 2016
    I have always being strongly against the practice of automatic roll overs. It is not ethically right. A consumer should have to opt-in to automatic roll overs. The default option should be moving matured money into an instant access account. A bank should not make a decision to lock your money away without your prior opt-in consent. It is an absolute disgrace that some, but not all, financial institutions do automatic roll overs.

    I don't know but it is normal practice to send a letter saying you have entered a cooling off period. Virgin Media recently got in trouble for not doing this. I don't see why financial services would be any different. It might be worth asking the CCPC who seem to have expertise in this area.

    You moved from one product to a different product. Different products have different T&C's. The reason for different T&C's is often the fact that one product was created at a different time than the other i.e. more recent T&C's attached to the newer product.

    You need to prove that PTSB broke some law. Maybe reading up on cooling off period notifications is your first step.
    Last edited: Dec 7, 2016
  3. carmel65

    carmel65 Registered User

    thanks CiaranT can't agree with you more. This is my first time to encounter "the auto rollover" and there is no way I would have agreed to it. Having scanned the web, I can see I am not the first person to discover it too late.

    I have been reading up and researching this, in preparation for my next step. In the case of PTSB the T&Cs are different only for online accounts.
    I suspect that this may have more to do with the consumer protection code, rather than any product development timeframes.

    In particular the area of "knowing the consumer/suitability" rules which may be more relaxed for online products (still looking into this). I was advised by the staff in the branch that "next year you will be able to do this online yourself" and having spoken to them again, it appears that some branch staff were not aware that the online account operates completely differently, they even admitted to me that this product would have been wholly unsuitable to me! The guys in the branch have done all they can, it appears that similar to more recent PTSB practises this decision has come from "head office".