My wife and I have a self-directed personal pension scheme. The investments (and related transactions, such as dividends and stock splits) are handled for the pension by a bank in New York. A bank that’s not part of the Royal Bank of Scotland.
Our pension consultants advised us that we needed a small current account for the pension scheme. An account to be used for the occasional non-investment transaction. This account rarely has more than about £750 on deposit. And we’ve only written 20 cheques on the account to date (in a four year period).
The Royal Bank of Scotland — parent of Coutts — has always charged a £5.00 quarterly fee for this account. This seems a bit excessive when there are many banks who’d handle this small account for nothing. But our pension consultants have a good relationship with the RBoS — and each cheque needs four signatures.
I was a bit surprised to open an advice from the Bank the other day and see that the service charge would be £2,206.52. The same advice indicated that both the turnover and the number of transactions on the account were zero:
I contacted our pension consultants and explained that we should possibly close this account. They said that this was a Bank error, and that we would receive an apology letter from the Royal Bank of Scotland.
Sure enough, the letter — a photocopied letter that wasn’t even addressed to me (or anyone else) — arrived in the post today. The undated, unsigned letter arrived on September 14, 2006, and it says that the overcharge was “a Bank systems error.” The letter goes on to say that the error “has regrettably altered the quarterly service charge you currently pay from £5.00 to £3,625.00.”
Even the photocopied apology from Mike Siddall is wrong: the earlier bank advice said the service charge would be £2,206.52 — not £3,625.00. It’s like the accuracy of numbers doesn’t much matter.
If it were me, and if I’d made a 725% overcharge, I’d have sent a personally addressed and personally signed letter. It makes you wonder how many of these letters the RBoS had to post out.
I’ve blacked out the two telephone numbers in this letter. Otherwise, this is how the letter arrived — unaltered.
Personally, I’m glad the RBoS made this mistake. As we don’t bank at Coutts now, it’s rather difficult for me to get new material for this website.
The letter says the QUARTERLY charge was altered to £3,625.00; the £2,206.52 was a pro-rata figure – lucky you!
P.S. The overcharging isn’t 725%, it’s 725 TIMES, which is then 72400%!!!
Also, the absolute amount of overcharging is actually ‘only’ £2,203.48. They wanted to charge you £2,206.52, calculated pro-rata from a quarterly charge of £3,625 – this suggests they’re charging you for 56 days out of 92 (they must have split the year into 3 quarters of 91 days and 1 quarter of 92: (3 x 91) + 92 = 365), so the amount of overcharging is 56/92 x (3625 – 5) = £2,203.48.
Just so you know, I’m not a huge fan of Coutts/RBS – they rejected my application to be a Private Banking Assistant, but it looks like they could have used my talents after all!
P.P.S. Just realised from looking at the first letter that they split the year into quarters running from June to August, September to November, December to February, and March to May, inclusive. Hence the quarters are 92, 91, 90 – or 91 in a Leap Year, as we now are – and 92 days long, respectively. I should really have noticed this before posting my P.S. – d’oh!