Morgan received a letter from his bank advising it had introduced a policy that required customers wanting to access their term deposits before they expired to give a month’s notice. The policy applied to existing and new term deposits.

Morgan complained to the bank that, in applying the policy to existing customers, it was varying the contract without customers’ consent. The bank said the change was necessary to comply with liquidity level requirements and applied to banks worldwide. Morgan understood this explanation, but still did not accept that it should apply to existing term deposits. He asked us to investigate. 

Our investigation

We noted that, generally speaking, a contract cannot be varied without the consent of both parties. In this case, the contract was the terms and conditions of Morgan's term deposit account. We reviewed those terms and conditions and concluded that the bank had not varied them by introducing the policy. The terms and conditions did not give a customer a right to break the term deposit before the maturity date. A customer could request early withdrawal, but the bank had the discretion to accept or reject the request. No existing rights or obligations had changed.

Outcome

We could not uphold the complaint.