Barclays named the only jargon-free bank
Barclays is the only account provider to have customer-friendly terms and conditions, according to a review of 18 leading banks.
The terms and conditions supplied alongside Barclays bank accounts were found to be "jargon-free" and laid out in a way that is "accessible for customers" by Fairer Finance, which conducted the research.
Of the 17 remaining banks, Nationwide was the only other to have T&Cs considered to be free of jargon, but Fairer Finance deemed that they could be made easier for customers to find their way around.
TSB and Metro Bank were found to have gone some way to eliminating unnecessary jargon but while Halifax's document starts off well it then lapses into "pages of legalese".
"Apart from those few exceptions, the majority of banks have terms and conditions that were written by lawyers or compliance officers who clearly didn't the have customer in mind," James Daley, managing director of Fairer Finance, told Moneywise.
A recent survey by the consumer group found that 73% of consumers don't read all of their policy documents, with many blaming this on them being too long.
As part of the transparency ratings Fairer Finance give banks and insurers, it measures the length of their T&Cs. Among the banks, HSBC was the worst offender with the document accompanying its accounts running to 34,000 words. That's 5,000 words longer than John Steinbeck's classic novel Of Mice and Men.
Halifax, Metro Bank, Natwest and Norwich & Peterborough Building Society, all exceeded 25,000 words. Meanwhile, Nationwide was the most concise among its peers at just over 11,000 words.
As for car insurers, Endsleigh, Esure, M&S Bank and Sheila's Wheels each took more than 30,000 words to explain their policies - that's longer than George Orwell's Animal Farm. LV= was the most succinct, with a supporting document of 6,901 words.
Only 27% of people Fairer Finance surveyed said they had read the T&Cs of their account and policy documents in full – and only 17% understand them.
"Bank accounts and insurance policies are complicated products and banks and insurers need to work much harder to give customers all the information they need in a format that they can understand right at the beginning of the sales process," said Daley.
"As things stand, it's fair to say that most of these documents are pointless. Few people are reading them, and of those who are, ever fewer are able to understand them."
The group is now campaigning for an end to "incomprehensible terms and conditions". The Financial Conduct Authority has recently admitted that Ts&Cs are an area of potential detriment for consumers.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.