Don’t be lazy when renewing accounts or subscriptions!
My Term Deposit with St George Bank matured today. Using their Internet Banking facility I clicked on the ‘renewal options’ button and was offered the choice of 0.7% to renew the account over the same 12 month term as the default and highlighted option, or to choose another option. I intended to renew for 12 months, but elected to click on the ‘other’ button just to see what my options were. When I selected the option to renew for 12 months using the full balance of the account (ie exactly the same as the default), the rate offered included a bonus of 0.22% - ie St George Bank’s reward for a customer selecting the recommended renewal offer is to deprive them of 24% of the annual interest that was available to them!
I find this behaviour to be unconscionable, and, if the fact that the bank highlights a particular renewal option should be considered to be a recommendation, almost certainly falls short of legislation with regard to providing ‘best advice’. But this sort of behaviour is not only found in banks:
I own a couple of internet site URLs, that must be renewed at least annually. This year I received a renewal notice from Netregistry, and when clicked in the email to renew, was presented with the default/recommended option to renew for 2 years for something like $50. When I looked at the option to renew for 1 year, the price was around $20, and for 3 or 5 years were more or less $20 per year. So the option ‘recommended’ by Netregistry was the most expensive of all available options!
The lesson is not to blindly select the option recommended by your existing provider - they don’t always recommend the option that’s best for you (and often do quite the opposite)!