Does your bank talk to you in Gobbledgook?
All banks publish their terms and conditions for standard current accounts, but have you ever tried to read them? If you have, it is highly probable that you found to be frustratingly complex and extremely difficult to understand.
A recent national survey, put the terms and conditions of standard current accounts from eight major banks and building societies to the test, asking people a series of questions to see if they understood their bank’s terms and conditions.
Baffling Terms and Conditions
Despite the interviewees being given unlimited time to answer the questions, no one could answer all questions correctly, including accountants and solicitors. The percentage of correct answers across all banks averaged 60%.
Also, in many cases the interviewer had to spend a significant amount of time to discover the right answers. Whilst the average was 3 minutes, many people took 15 minutes or more, despite the fact that all people interviewed were of average or higher, intelligence.
Few consumers can face reading bank T&Cs
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. Only one in ten people said that they had read their bank’s T&Cs thoroughly when they opened their account, which is unsurprising when research suggests shows that it would typically take between 25 minutes and over an hour and a half to read a set of terms and conditions from the ten major banks.
HSBC topped the table for the longest terms and conditions running to nearly 30,000 words which would take an average person over an hour and a half to read. First Direct and Halifax would also take more than an hour to read with both of their T&Cs at over 20,000 words.
Examples of banking gobbledygook
- 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 and should have been 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 account without telling you beforehand.’
Totally Unrealistic
In my opinion, it’s totally unrealistic for banks to expect their customers to plough through 30,000 words of financial jargon and small print. 
Banks should radically reduce the length of their terms and conditions, so that customers are not put off from reading them in the first place, and ensure they are clear, jargon-free and easy to understand.
It’s also important that banks present their T&Cs in a clear, concise, well-indexed and jargon-free form that is easy for customers to use. My concern is that people will either be too baffled to understand what they’re buying or take on a product that’s not right for them; which is why the banking miss-selling scandals of recent years happened.
Do you want an accountant that speaks your language, then talk to David Jones Shrewsbury Accountant
David Jones is the Senior Partner and Founder of Morgan Jones & Company. Born in Liverpool and an Accountancy graduate of the University of Wolverhampton, David spent twenty years working for the Customs & Excise in London then Shrewsbury before starting his own business. David's depth of knowledge of the UK tax system and his ability to communicate this learning has seen Morgan Jones & Company grow into Shropshire's most respected Accountancy Practice.