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Consumers could receive low savings rates text alerts under FCA plans

 

Individuals who receive poor interest rates on their savings accounts could be sent text or email alerts notifying them of better deals, under a proposal put forward by the Financial Conduct Authority (FCA).

 

The plan, termed the ‘Sunlight Remedy’, aims to expose poor savings rates: new FCA research revealed that some savers have been receiving an annual return of just 0.01%.

 

This means that those with £1,000 to invest are potentially earning as little as 10p a year.

 

As a part of the plan to combat these low rates, the FCA trialled sending consumers text alerts and email reminders, which proved to have a positive effect on prompting them to switch accounts to receive a better interest rate.

 

As a result of these trials, the FCA intends to consider the idea in greater detail in the forthcoming months.

 

Christopher Woolard, director of strategy and competition at the FCA, commented: ‘In a well-functioning market, providers should be competing to offer the best possible deal to consumers.

‘Our Sunlight Remedy data shows that some consumers could be better off by opening a different account.’