Financial jargon confuses consumers

Financial jargon confuses consumers

Consumers don't understand the financial jargon used by banks and building societies, according to a survey by National Savings & Investments (NS&I).

The poll of more than 1,200 adults found that 67% of Brits know what a BACS payment is and 38% know what AER stands for. More than half (53%) know what ISA means and 55% understand the term gross.

The survey reveals:

50% are confused with jargon on company websites

25% of people who find company websites difficult to understand admit this stopped them saving with the bank or building society

41% are confused by call centre staff

49% think application forms are too complicated

51% said there is too much jargon used in letters

18% 'strongly agree' that language used in product brochures is too confusing.

The survey also revealed that 60% of Brits would think about switching their bank or building society because of complicated terms and conditions. The top reasons customers would change their bank or building society:

no guarantee that your money is safe (74%)

bad customer service (72%)

uncertain rate of return (66%)

complicated terms and conditions (60%)

no call centres in the UK (58%)

confusing language and financial jargon (54%).

Nearly two-thirds (62%) use search engines to decode jargon, while 27% ask friends or family and 1 in 10 guess the meaning of the term.

Nigel Holland from Holland & Co Chartered Accountants said:

“ The information included in the survey issued by NS & I shows that many customers are unhappy with financial jargon. This is an interesting point because it could mean that if a potential customer believes that the jargon used by a business is difficult to understand then the customer may decide not to use these services.

It is important that language used by firms is easily understood otherwise the firm may lose customers. On the other hand whilst customers need to be aware that information provided by firms is not always the most interesting read, it is important that the customers take time to study this information otherwise they could be buying something which they do not really want.”