Consumers baffled by banks’ small print

A new Which? investigation reveals most banks’ terms and conditions are too long or complex. 

Our research found that banks frequently fail to present their terms and conditions clearly enough for consumers to understand. Which? put the terms and conditions of standard current accounts from eight major banks to the test, asking people a series of questions to see if they understood the T&Cs correctly.

Despite the testers being given unlimited time to answer the questions, for none of the banks were they all answered correctly. The percentage of correct answers across all banks ranged from Lloyds’ score of 53% to Natwest, who scored highest, with 67%. It also took a significant amount of time for our testers to discover the right answers in some cases, with one person taking 17 minutes to correctly answer a question on First Direct and another taking 15 minutes on Halifax.

Only one in ten Which? members surveyed told us they had read their bank’s T&Cs thoroughly when they opened their account, which is unsurprising when our research suggests it would typically take between 25 minutes and over an hour and a half to read a set of terms and conditions from the ten major banks.

HSBC topped the table for the longest terms and conditions running to nearly 30,000 words which would take an average person over an hour and a half to read. First Direct and Halifax would also take more than an hour to read with both of their T&Cs at over 20,000 words.

Which? wants the banks to work for customers and make their terms and conditions clear, concise and jargon-free.

Which? chief executive Peter Vicary-Smith said:

“It’s completely unrealistic for banks to expect their customers to plough through 30,000 words of financial jargon and small print.

“Banks should drastically reduce the length of their terms and conditions, so that their customers are not put off from reading them in the first place, and make sure they are clear, jargon-free and easy to understand.”

The Which? Big Change campaign is calling for banks to work for customers, not bankers and to put customers at the heart of what they do. With trust in bankers at rock bottom, Which? is calling on the banks to make their products more transparent.

‘Big Change’ is calling for:

  • Banks to put customers first, not sales.
  • Bankers to meet professional standards and comply with an independent code of conduct.
  • Bankers to be punished for mis-selling and bad practice.

The public can support the campaign by signing the Big Change’ pledge.

Notes to editors:

1.     The length of banks’ T&Cs:

Bank Number of words Time to read*
HSBC 29,006 1hr 37 mins
First Direct 25,904 1hr 26 mins
Halifax 20,082 1hr 07 mins
Lloyds TSB 16,293 54 mins
Barclays 15,086 50 mins
Santander 13,651 46 mins
Cooperative Bank 12,593 42 mins
Smile 11,295 38 mins
Natwest/RBS 11,165 37 mins
Nationwide 7,557 25 mins

Time to read is the time it would take an average person to read them from start to finish based on a typical reading speed of 300 WPM.

Research carried out in October 2012. The following changes have happened or are due to happen since our research:

  • HSBC – changes to terms and conditions will take effect from 1st December 2012.
  • First Direct – changes to overdraft terms and conditions coming into effect on 1st December 2012, other changes on 1st January 2013.
  • Halifax – has changed terms and conditions from 2nd November 2012 since research carried out.
  • Lloyds TSB – has changed terms and conditions from 2nd October 2012 since research carried out.

2. Banks’ terms and conditions test:

Bank Questions answered correctly
Natwest 67%
Barclays 65%
HSBC 62%
Santander 60%
Nationwide 57%
First Direct 55%
Halifax 55%
Lloyds TSB 53%

Research carried out between 8th and 15th October 2012:

  • We asked 24 people to answer five questions on the printed terms and conditions of standard current accounts from Barclays, First Direct, Halifax, HSBC, Lloyds TSB, Nationwide, Natwest and Santander.
  • Each person was allocated four banks, so 12 people completed the test for each bank.
  • The five questions covered a range of everyday topics including how to cancel a recurring direct debit, and whether you can use online banking abroad. The questions were multiple choice.

3.  Separately we surveyed 1,373 Which? members for their views on bank terms and conditions between 11th and 16th October 2012.

4.  Some examples of important current account terms and conditions that customers may not understand:

First Direct

What it says: ‘The cut-off time is the time before which on a business weekday a payment or payment instruction is treated as received by us on that business weekday. This means if we receive a payment or a payment instruction after the cut-off time, we will treat this as received by us on the following business weekday.’

What it means: If you don’t make a payment before the bank’s cut-off time, it won’t be processed until the next working day.


What it says: ‘We may transfer, assign, or pass our rights or obligations under this agreement or arrange for any other person or organisation (a transferee) to carry out our rights or obligations under this agreement.’

What it means: Your account could be transferred to another bank.



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