RaboDirect article: "Who are they fooling? It’s not you, is it?"

[MysticX]

RaboDirect have posted an article on the savings market:
http://www.rabodirect.ie/blog/advertising-financial-products/default.aspx

I'm sure AAM regulars will find it very intriguing.

Here's some of my views on it:

Now that the dust around Irish banks seems to have settled a bit, I am amazed to see most of them go back to their old marketing behaviour.

Mmm I could probably spend a bit more effort on this but I honestly can't think of any marketing difference with the pre and post banking crisis. Maybe some banks emphasised that they're covered by guarantee X but that's it.

Surely it’s time for the Financial Regulator to address the lack of transparency in the advertising of, not only savings accounts, but banking products in general. I fully endorse this need for clarity.

Alright need help here. Never had trouble understanding the specifics of product X. Never had to wade through pages of T&Cs or spend time ferreting out hidden clauses etc. In fact from experience I'd say all the product information I found online clearly states all you need to know in brief, direct uncluttered detail; usually on the first page. Any additional relevant information is usually clearly marked / linked. I'd say the Financial Regulator is doing fine... at least for me and I don't consider myself especially gifted upstairs.

My personal view is that promotional rates are not in the long term interests of the consumer.

Promotional by nature is implicitly not long term. Post promotion, customer inertia comes into play though it's my opinion that more and more people are not giving into inertia (AAM is undoubtedly helping here).

There is too much potential to mislead the consumer. Isn’t that what got us into this mess in the first place?

Alright no one can deny the banks are part of the mess but you really can't point the finger at a single entity (Financial Advertising in this case) and say that's the source of the misery?
http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932009#Cause_of_the_financial_crisis

Regarding their listed examples:
-Does anyone think that listing a current account ina savings article isn't right? Sort of like like comparing hammers with pipes? I'm sure there's a unique reason why AAM doesn't in the best buy threads.
-For all the other examples I had little trouble identifying the specific products they were speaking about and the specific banks which were offering them. Nor did I have to read through huge quantities of information with a magnifying glass or struggle to find the specifics of each product that was detailed (it might have been very different if I totally ignored the first page). How could this be so if there's a lack of clarity and transparency in the market?

And we will strive to offer competitive rates.

That remains to be seen... However it is my personal opinion that RaboDirect is currently more focused on trying to retain their customer base by means other than competitive rates.

 

[camlin90]

More of the usual guff from Rabo.

Articles like these are an insult to people's intelligence.
I have absolutely no problem understanding that the bonus saver account pays 3.5% on balances over €25,000 - thank you very much.

Of course, Ulster Bank could make it clearer by saying you'd lose €281 net every year by putting €25K in Rabo instead of the bonus saver.
But perhaps their marketing tactics are a little less shoddy than Rabo's, which seem to revolve around manipulating fear and stupidity to keep deposits at the bank.

 

[thedon]

Well written MysticX, totally agree with you, Rabo keep rolling out their "AAA" status and their "compare like with like" line but as you said I also have never had a problem with "sneaky" terms and conditions? whats sneaky about putting the relevant info and t+cs on the first page of the web site?

I have personally been on a crusade to ensure all my family and friends have moved their money from Rabo to other far more profitable and secure accounts and am happy to say have got most people to do so, however having said this I also was initially encouraging people to put their money into their fixed term accounts due to their fantastic term deposit rates, long since gone!

It appears Rabo are more like the herd than they care to admit, great interest at first to draw people in then slowly lower their interest rates to avail of customer inertia, seems to me Rabo are just like everyone else!

 

[Lightning]

Some good points above about Roel van Veggel latest blog post.

Roel is making the problem out to be far worse than it is. There is an implicit suggestion of a blanket labeling of all competitors as been dishonest which is not the case.

Statements from RaboDirect like ...
"So sure, if you have loads of free time to spare to browse all offers out there …want to check on an almost daily basis if you are still within the range of the Terms & Conditions of the various products on offer" are very misleading. You don't need to check T&C's daily and you don't need to check best buys daily to get a better product than Rabo's offering.

I strongly dislike this attitude from Rabo that seemingly suggests "we are honest and every other bank lies" and the misleading statements that they use to back this up.

However, I agree with Roel that there is a need for more regulation in the advertising of all financial products including savings and mortgages. Most AAM posters don't need it, I don't need it but Joe public needs it.

1) Take for example, Bank of Ireland's recent mortgage advertising campaign, where they advertised a discounted rate for year one in big bold print and the amount for one month of payments but failed to properly mention their rates and the amount for year two to year 30/40 of the mortgage. That is the kind of advertising of short term gimmicky introductory discounted rates that caused the sub prime crisis.

2) A lot of savings products don't make their T&C clear enough in their adverts. Take the Halifax 3.75% Flexisaver product for example. The rate is for year one only and only up to 10,000 EUR. I was always fully aware of these T&C but it was never clearly started to me during the account opening process. I know people who were completely unaware of what happened after year one.

I believe that there is a need for more regulation in the display of T&C's and the advertising of financial products but does not mean you should take a low rate with Rabo.