Direct Line misleads savers

by Gill Montia

Story link: Direct Line misleads savers

Direct Line has been embarrassed by press reports that it has been comparing its current interest rates for savers with competitors’ rates that are almost a year old.

In its online advertising material, Direct Line compared its current offering to savers with interest rates from Halifax, Lloyds TSB, Nationwide and Abbey.

However, the competitors’ rates dated from September 2006, since when the base rate has risen by 1%, to 5.75%.

In one comparison Direct Line quoted Nationwide’s Cash Builder rate at 1.4% (before tax), when it actually pays 2.65%.

Not surprisingly, Direct Line managed to use the correct rate for its own product, amounting to 5.05% (before tax) on its Direct Access Account.

The error is particularly embarrassing for the online bank, which has been running an advertising campaign claiming that price comparison sites are unreliable.

In addition, its savers have so far failed to benefit from the 0.25% base rate increase in July and informed consumers will be aware that Direct Line’s attempt to establish itself as the leading savings provider is currently being thwarted by Sainsbury’s Bank which is paying savers 6.25% (before tax).

Direct Line has publicly apologies for the errors in its online advertising and is busy amending its comparison tables.