UK-based Lombard Direct, part of RBS Group, has drastically cut thousands of customers' savings rates without warning as a side-effect of refocusing on its loans business.
Despite the reductions coming into effect in early May customers have yet to be told, reports the Mail on Sunday. Rates of between 3.46% and 4.16% have plunged to just 0.49%.
The group is only now, almost a month after slashing its rates, planning to distribute letters to its customers, telling them they have three options, the newspaper claims.
The Mail reports that customers can leave their funds where they are, close their account, or have their money transferred into a Direct Line account paying interest of between 4.05% and 4.25%.
Lombard claims anyone choosing to transfer to Direct Line, another RBS subsidiary, will get at least the same rate as they did before May 10.
A spokeswoman for Lombard admitted the delay in sending notification was not what we would have wanted, the report added.
She continued: We intended to inform customers by post at the same time as the rate was reduced, but unfortunately, due to internal problems this did not happen. We apologize to accountholders.