Barefoot Investor Accuses ING of 'Manipulating' Customers with New Savings Account

Financial commentator Scott Pape, known as the Barefoot Investor, has criticized ING's new "Savings Booster" account, asserting that the bank has unnecessarily complicated a product it claims will simplify earning bonus interest. Pape's remarks came after ING announced details of the new account, which offers new customers a variable rate of up to six percent on balances up to $500,000 for the initial four months. This rate is contingent on customers increasing their balance by at least $100 each month, excluding any interest earned.

Pape, a proponent of using ING accounts within a multi-account savings strategy, likened the account's conditions to negotiating with children before bedtime. He drew a parallel to motivating his own children with a reward tied to a lengthy list of requirements, such as setting the table, eating dinner, clearing it, taking a bath, washing hair, brushing teeth, and preparing uniforms for the next day.

"That is your new improved account, Adrian," Pape stated in a direct response to ING executive Adrian Kamellard, referencing the bank's press release that claimed the Savings Booster would "make bonus interest easy to understand and deliver greater value for customers." Pape questioned this assertion, pointing out the account's tiered interest rates: a 0.60 percent Welcome rate for four months, a 3.15 percent Boost rate conditional on a $100 monthly balance increase, and a Base rate of 2.25 percent.

He argued that the advertised headline rate is misleading. After the initial four-month Welcome rate expires, the "up to" rate drops to 5.40 percent. Pape also highlighted that missing the $100 balance increase hurdle in any given month, perhaps due to unexpected expenses like car repairs or holiday spending, would result in the interest rate reverting to the 2.25 percent Base rate.

Pape suggested that ING is employing incentives to influence customer behavior, similar to how parents use rules to guide children through routines. He believes customers will eventually recognize this strategy, stating, "Kids are smart. They wake up to the fact they're being manipulated. And so will your customers."

Despite his criticisms, Pape acknowledged that the account still offers a competitive interest rate and indicated he would likely utilize it himself. "So here's what I'm going to do," he wrote. "I'll set up an automatic transfer the day after payday, clear the $100 hurdle without even thinking about it, and get on with my life. It's a good rate, after all. But let's not pretend you're doing it in my best interests."

ING was contacted by the Daily Mail for comment.