Hidden bank account charge leaves people with £1,900 lower balance than expected
A hidden bank account charge could leave thousands with £1,900 less than expected. Recent figures suggest that the average amount in each Child Trust Fund account is £2,200 - but some are finding their cash has been reduced to as little as £12.
The Funds are held in banks, building societies or other saving providers and it means they are subject to each individual bank's charges and fees. The National Audit Office estimates that CTF providers could be earning collectively up to £100million per year through charges on accounts.
Max Prince was among those affected and told the BBC he discovered hidden fees had left him with only £12.39. Columbia Threadneedle said it had written to Max's parents about the fee but the letters had been returned unopened.
READ MORE Met Office says snow could hit UK within days and explains where's set for flurries
Max said: "We'd been expecting this letter for a while, I mean we'd been waiting for it for 18 years basically. So when me and the family one morning opened this letter, expecting to find at the very least £300 or so, we instead saw the number £12.39. Not £120, not anything… just £12.39."
He added that it was "shocking" and "kind of outrageous". The firm said its Child Trusts Funds "require customers to actively make their own investment decisions and without authorisation and communication from customers, we are unable to take action on their behalf".
Max said: "In the grand scheme of things it can't be a lot of money for the company, right? It's only around £300, so it is unfair in my opinion. You could say cruel. It's unexplainable I think would be the best way of putting it."
A spokesperson said: "Our ongoing duty to the consumer is important to us and we continually review our product range and the outcomes they deliver for clients on an ongoing basis. As we assess our Child Trust Funds, we will place a specific focus on identifying other similar situations to assess, as appropriate, what action we can take.
"We were explicit in the letters sent to customers when we introduced the annual charge, using best practice pounds and pence clarity about the costs that a customer’s Child Trust Funds would be incurring, giving 60 days’ notice to allow time for customers to decide if the product met their needs.
"As is evidenced in this customer’s case, our Child Trusts Funds and Savings Plans require customers to actively make their own investment decisions and without authorisation and communication from customers, we cannot take action on their behalf."