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The consumer group warned that savers could be losing between £1.5bn and £3bn each year thanks to ISAs with poor interest rates and is preparing to launch a super-complaint to the Office of Fair Trading.
Mike O'Connor, chief executive of Consumer Focus, told The Telegraph: "Cash ISAs are designed to encourage long-term savings but many people find their rates slashed to next to nothing after a relatively short time. Providers are using inertia and confusion to drop ISA rates faster than on other accounts."
But that's not all. The watchdog also raised the issue of banks and building societies launching new ISAs. Providers often launch a new ISA each tax year and merely change the issue number which can leave savers struggling to find out which version they have and what interest rate they are getting.
Since it's launch in 1999, the cash ISA market is now worth £158 billion and yet banks are still failing to give customers a fair deal.
Have you found yourself "locked in" to a cash ISA or have you moved to a regular savings account to find that it pays better interest?