Beware the Name Change Bait and Switch

The Wall Street Journal notes High-Yield Savings Accounts Come With an Asterisk

Online-centric banks such as UFB, Capital One Financial and CIT Bank attract deposits by paying rates far higher than typical bricks-and-mortar banks. Rates on these high-yield accounts generally rise alongside U.S. interest rates without depositors needing to take any action. But some customers say these lenders deceived them by advertising competitive rates while paying longtime customers lower ones. In some cases, only customers who were monitoring their bank's every move could notice and respond to the changes.

"You think you'll get a higher rate and it will keep going up," said Ken Tumin, founder of DepositAccounts.com, a website owned by LendingTree that tracks banks' account offerings. "But there are games they play to get deposits without having to pay the highest interest rates."

UFB did this eight times starting with a a product simply called Savings. A few weeks later, the lender advertised Rewards Savings as its main offering, paying 2.21%. It left the rate on the older account called Savings at 1.81%.

UFB did this eight more times. The ironic name Best Savings was followed by Preferred Savings, then Priority Savings. The current offering called Secure Savings, pays 5.25%.