/ Money

We deserve better banks

Better Banks campaign logo

Our surveys have once again found that the big banks aren’t getting customer service right. Standards aren’t being driven up across the industry due to a lack of competition, so today we’re launching a campaign calling for better banks.

Have you ever thought about your bank account and why you need it? Because you love banking? Life would be interesting if you didn’t have one. I suppose you could keep all your cash stuffed in the mattress and take a bit out to pay the gas man (except he doesn’t visit anymore).

So yes, everyone needs a bank account these days. And the banks know that. Maybe you don’t think about your bank too much – the money flowing in and out. But is that all we expect from our bank – somewhere to put our money and make payments? Surely there’s more that they can be doing?

Your bank can see when you’re about to go over your agreed limit, so why don’t they tell you? Some banks automatically text you the moment your payments exceed the limit on your account, and give you time to get your account back into balance before applying charges. But too often we see banks hitting customers with disproportionately large fees for unauthorised overdrafts.

And what about when you fail to pay a bill because your bank’s IT systems have gone down and you can’t get access to your money? Banks can do better and they know it.

Big banks struggling to keep up

So today we’re launching a campaign calling on the regulators, government and banking industry to get banks to listen to us – their customers. There’s a certain quality we can expect from any of our service providers and many of the UK’s biggest banks are struggling to keep up with their smaller rivals.

Some of the smaller banks are getting it right, like First Direct and Metro Bank. Their customers are the happiest, as we found in our latest survey of more than 20,000 customers. But a lack of competition means this isn’t driving up standards across the whole industry.

We want to put customer service in the spotlight for all banks. We want alerts, apps and other tools that would help us manage our money more easily. And we want unfair unauthorised overdrafts to be tackled too.

Sign our petition for better banks

The Competition and Markets Authority’s major inquiry into the current account market is due to conclude in the next few months, but we don’t think current proposals will reform the market. That’s why we’re calling for a collective effort from Government, regulators, and the banking industry to raise the standard of service we receive. And the competition inquiry needs to ensure that banks are held to account for the way they treat their customers.

We know that banks have started to change their culture in response to the mis-selling scandals of recent years, but now is not the time to congratulate them on a job well done. Sorting out the worst practices should be the bare minimum of changes we need to see to create better banking for customers. If you agree, please sign our petition and then tell us how your bank treats you.


[UPDATE 16 FEBRUARY 2016] – Two of the big banks have come out in support of our Better Banks campaign. Les Matheson, CEO of Personal and Business Banking at RBS and NatWest, said:

‘We agree that Britain needs better banks and that is why over the last few years we’ve been challenging the industry to help our customers out, not catch them out and we’re proud of how we’re making banking simpler and fairer for our customers.’

In response to our customer satisfaction survey, Les Matheson added:

‘Whilst we are disappointed in these results, we are determined to do more and we are working with Which? to support their campaign, including raising awareness and education of products – not just for our customers, but across the banking industry.’

Terry Kaye, Divisional Director for Customer Experience at Nationwide Building Society, said:

‘As a mutual, Nationwide is owned by and run for the benefit of its members meaning they are at the heart of what we do. The Society already has the highest customer satisfaction scores amongst its banking peers, but we aren’t complacent and are always striving to further improve the level of service offered to our customers.’

Comments

I haven’t a problem with my bank because I do not borrow from it in any way. I don’t buy things unless I have the money to pay for them. Easy credit is most peoples downfall . I bank with TSB

Exactly bishbut -your banking philosophy–word for word –is mine but maybe you shouldnt have mentioned the name of your bank , a hacker could start sending you emails telling you your account has been stopped -so — click on this link to supply your banking details . although I do agree with the part that Pedro says about them taking care of your finances . But if you think about it we own the banks in part at least –who bailed them out –the government and where does the government get its money from –thats right UK tax payer . This is imported from the US philosophy–banks are too big to fail – but seemingly UK heavy industry isnt.

Even worse, Duncan – it is not even taxpayers’ actual cash that has been used to bail out [or bale out perhaps] certain banks but the infinite phoney money created by quantitative easing and its illusory repayment terms. This has led to minuscule savings rates and various other unfortunate consequences and one day will have to be reconciled with our hard-earned. I recognise that it was probably the only policy that was going to produce a soft landing after such a colossal financial implosion but it has left us all with a massive IOU. The treatment of overdrafts is but one action the banks are taking in order to increase their deposit ratios and rebuild their reserves and, hardly surprisingly, they are going for a sitting target that is not in a position to move.

Thanks for that John thats some info I didnt know about will keep that in my “knowledge bank ” –phoney money –never a Truer word !!!

If everyone was like you there would be almost no money left because our money is created as debt and destroyed when loans are repaid. Mind you it is not a bad idea for us all to refuse to take on new loans. It would cause an enormous recession but it might just be worth all the pain if people finally woke up to the fact that we have a money system that is not fit for purpose. For more information and short explanatory videos see positivemoney.org.uk/videos

Allan says:
16 February 2016

I have just moved my account to the TSB

Allan says:
16 February 2016

I too, don’t buy anything unless I have the money to pay.

Likewise, Bishbut.

Here we go again – another campaign: “we want unfair unauthorised overdrafts to be tackled too” [I think the word “charges” is missing].

I don’t have a problem with charging a loaded fee or higher interest when a customer takes money out of the bank that they don’t have. The terms are clear. Most current accounts have generous authorised overdrawing allowances built-in. I understand that some people “slip into the red” [which is what the authorised overdraft is for] but nobody just slips into the unauthorised zone. People have never had better and more up-to-date methods of managing their money with all manner of facilities available via the internet, the telephone, and the ATM, as well as actually going into a branch.

Pedro says:
13 February 2016

On the whole I think Banks do a fantastic job; Paying all our bills, receiving payments due to us, keeping any money we have, safe (we hope). On top of that, loaning us money to purchase large items like cars etc.
Like John Ward says, we have never had it so good really. Though I do sympathise with anyone who is struggling financially these days. It is often very hard to get along compared to years ago. Families used to help one another, jobs were plenty etc, but everyone is hit these days with big mortgages or ridiculously high rents. That is the main area that government needs to tackle. The housing market is out of control with rents, and house prices way beyond what ordinary people can afford or hope to afford in the future. That would be a good campaign – to get house prices cut by law!
But we are ALL greedy aren’t we,and want the best price for our property.

Ah; were it that simple, John. The young man whose income is irregular because he holds down several jobs and is paid hourly cannot, with any degree of certainty, predict when he will slip over into the unauthorised zone, particularly when the bank restricts his authorised overdraft facility to a pittance. DD payments for his accommodation and utilities will easily tip him over and the first he hears about it is the moment he gets the text message from the bank, by which time it’s almost certainly too late to do much about it.

The obscene charges for going into that forbidden zone are savaging the very people who are most vulnerable: the young, hourly-paid, multiple job holders. These, of course, are the very people who are least able to pay the extortionate charges, and levying them simply puts the youngster into the red again, whereupon more charges are levied.

If the banks had a scrap of sense, they’d realise these youngsters are the well-paid workers of tomorrow, but sadly, it seem they lack both that and any sense of social responsibility. So yes: we do need a better banking system, a more sympathetic system and a system that doesn’t attempt to punish those who are least culpable.

The banks argue they’re behaving in this way to avoid the horrors of another global crash, but they should not forget who caused that crash. It wasn’t the hard-working youngsters, attempting to scrape by doing every job they can find: it was, in fact, exceptionally well-paid bankers.

I share your concern over the kinds of cases you have described , Ian, and we have all been there at some point. But I think there are plenty of others where there is less or no justification and where lifestyle choices have created the problem and we all know that lifestyle choices are the most difficult to reverse. The Nationwide account described by Li below seems to be one answer but I expect many would see it as too restrictive. I remember the days when I was called in to the bank for ‘managerial guidance’ – in the days before computers and ATM’s, I was somehow managing to run my account too close to the limits for the bank’s comfort since there was never a debit balance on my account but to the bank’s distress rarely a credit balance either. I think my gross annual income was £575 at the time but the Midland Bank was clearly worried and thought I should be reminded of what banks were for. Banking wasn’t free in those days either and one had to anticipate and cover the six-monthly charges.

Pedro says:
13 February 2016

Ian makes a good point. Perhaps the banks should provide an account for low-paid workers, and monitor it carefully to see whether they pay back the overdraft in a reasonable amount of time and only charge a low amount in that period.. But obviously they cannot allow it to go on for ever, as the cost would have to be passed on to all customers eventually. Sadly there is no bank that is just a pot of money at the end of the rainbow, they are all there to make money!

I see overdraft facilities – whether authorised or unauthorised – are a service offered by banks. I don’t know if banks offer the option simply to decline a payment if there is insufficient money in a current account, or whether customers would choose this option, but it would be one way of avoiding overdraft charges.

Banks are often criticised for the high charges for overdrafts. We really need to know whether the charges can be justified or if providing overdrafts is a major source of income for banks. If overdrafts are lucrative then this should be addressed.

I have no problem with companies making large profits on luxury goods but I class banking as an essential service these days, like energy supply and food.

Paul Fisher says:
13 February 2016

When you open a bank account you are told the rules and given updates. People should be more careful with their financial issues. However, I think the banks should give a better margin before pouncing.

Actually Nationwide has an account that almost hits the mark, it’s basic account now sends you a text to tell you a payment is due to go out and there’s not enough money to pay it, gives you until 2pm (I think ) to put funds in and if you don’t bounces it BUT crucially makes no charges if it payment is returned or you go slightly overdrawn. Of course you have absolutely no overdraft facility and you cannot have a credit card, but they too have UK call centres that are now open 24/7. Also once they see that you are running your account in a way that satisfies whatever criteria they have they offer you a credit account but it is up to you whether you decide to take it or continue with the no charges/no overdraft account instead.

That sounds very sensible Li. Of course, it presumes that the customer can afford to have and use a mobile phone.

The change I would like to see is having the choice of your current account being an overdraft account or interest paying account.

Current accounts with First Direct used to give interest but they stopped it and gave free overdrafts instead as that is what customers supposedly wanted. They didn’t ask me though.

Chris says:
13 February 2016

I get the feeling that banks encourage their staff to make use of all possible bases for making account charges in order to bolster profits – with the result that bonus-chasing staff then exploit opportunities over which account holders have little or no control e.g. from variations in direct debit activation dates. Accordingly I suggest that there be a cap on variable charges as a % of account debit activity – say month on month.

The scandalous actions of the senior UK banking fraternity has left a huge void in everyone’s trust and confidence. There is still a long way to go to restore our faith in them as decent, safe and trustworthy people. Where are those people now, no doubt living the high life at our expense! Why now legal retribution for them to pay back a large part of their fortunes gained at so many innocents expense?
As much as I hate excessive rules and regulations, ways and means to curb the greed and frankly illicit activities of those few senior irresponsible individuals must be established otherwise it will happen again before too long.

I agree William ,and yes corruption isnt just ongoing its flourishing ,just more discrete . It will upset some here but ,and you wont read it in UK “news ” but London is the Global Centre for money laundering as well as New York -you get highly skilled professionals like lawyers and accountants but you also get off-shore centres through London such as crown Dependencies like Jersey -Guernsey -Isle of Man -British Virgin Islands and the Cayman Islands so London has everything you need (source of info supplied if required ) . And according to the Scottish Independent newspaper Edinburgh is just as bad. Realism brings you down to earth. There have been lots of banks that have been fined lately for money laundering . A “review body is set to complete its findings in 2018 -Financial Action Task Force (FATF ) , now if that was Joe Bloggs -UK citizen -he would have been arrested , and given massive publicity , and thrown in the clink BUT we are talking powerful people (who I wont name ) Its a world of 2 sets of legal rules =poor-jail -rich (extraordinarily rich ) a quiet word in the ear .

Corruption is like beauty……………It is how it is viewed in the eye of the beholder………
People can fall for people because they are rich………….They will see people in an enhanced way not in a deliberate fashion but in an unconscious fashion
Some years ago a TV doc was made on the subject………………….Some of mostly British older and old men were featured………………
They were not very attractive until everyone realised they were wealthy as in stinking rich
They all of a sudden they became handsome and attractive………….

The same can be said of money…………It’s allure and it’s sense giving power of security does funny things to people
Many in the UK today are fine with great wealth as in the London and business sectors because they believe it has a “spin off”
So we’re even happy to not have the money just as long as we think it is in the country and we might get to touch a few pence of it………..
The problem is that that is a myth……………The big money does not stay around………..The owners of the money take it elsewhere because they want it all for themselves……….
The Russian oligarchs and other wealthy beings buy London property like its bread driving up the price for the common man but those properties sit empty often all year……..
The big money seldom if ever pay tax and the big money itself moves away taking any benefit with it

Even as surprised me where the money goes it does not benefit as I was surprised to see in a recent doc on off shore tax havens where the ordinary people of Caymen are in abject poverty…Even me with my interest in everything did not know this…….

It has in the past and will in the future cause civil unrest…………..It is not controllable although many think they have a hand on it as such but the power and attraction blinds all before it

Today the money men are happy to print money that doesnt exist so long as thye can have more of it……………But there is a limit and we will reach a limit………….When we do money for a time will be worth nothing or a very small fraction of its current value…………..

Its all a con…………….

Your right Dee the money printing capital of the World the US is as told $19 Trillion in debt but many financial analysis say its more than $39 Trillion . Never before has the US been in so much debt so the last thing they need is anybody questioning their financial control of the world ,their physical control of it and a uni- polar world . So WW3 coming up for money as US senators say Putin has no right to all that land -Exceptionalism gone mad.

Removed from reality………………..I am convinced
Imagine looking at another country half a world away and thinking “they have too much land”…………………..Thats what happens when your brought up in Playstation world………….anything goes………we are always right……………There are some of those closer to home and they’ll be the first to complain about others having the last word just the same as bullies at work being the first to gripe and complain………….Cover up’s

My husband had his wallet stolen during a train journey in France. He had mobile signal long enough to contact me in Belgium and I then had the task of contacting various banks. Full marks to Nationwide (answered immediately and understood the situation) and to Halifax (also quite efficient). However, I spent 15 minutes on a mobile phone from Belgium trying to get Asda Credit Card Services to answer their lost/stolen card line. This is unacceptable in my view. I always prefer to deal with a business with call centres in the UK and those who answer their telephones promptly, especially when you are reporting possible fraud.

Malcolm says:
13 February 2016

I had been a customer with Natwest since 1961, and also had a Natwest Mastercard. In October 2015 Natwest abolished the Your Points scheme on Mastercard, so I now have a John Lewis Partnership Mastercard which gives vouchers on purchases. Natwest charged over 2% on overseas purchases so I intend getting a card which makes no charges. Our Natwest branch in Lewes has now been “automated”… not appreciated since I often need to use a “human faced” till. When I closed my account at Natwest I was told I “needed to move with the times”…..so much for their appreciation of a customer of 55 years… they appear to be a totally uncaring bank.

If you’ve ever had an account with a bank that changes your payment dates to the day before you get paid,you already know why the banks need a total reform…

I am very happy with my bank, like many previous contributors. So if you are not happy with yours, and feel strongly enough, move to a better bank.

What I do not like about about Which?’s campaign, and its attitude, is that it appears to support people taking unauthorised overdrafts. When you open an account you agree to its conditions. You have the option of arranging an authorised overdraft with a limit. If the bank thinks you are credit worthy then they will agree to this. If you do not ask for an overdraft facility. or if it is refused, and you go into the red on more than just isolated occasions, then you are taking money (mine and others) that you are not entitled to, and with the assumption you may not be able to repay it. The charges are spelled out clearly, in the case of my bank anyway, so you should not be surprised at what you have to pay. No doubt they help to offset losses made by defaulters. I do not want to support such people financially; I have quite enough to do to support my own family.

If your financial situation is precarious, my advice is to look hard at your money, do a budget, talk to your bank, and find a mutually acceptable solution. But do not take money without consent.

Which?, I would like you to give more responsible advice. The least you could do would be to help people organise their finances. Perhaps a guide you advertise on tv. But you should not condone taking money without agreement. 🙂

I wholeheartedly agree with Malcolmr. Which? would be better serving those who have difficulty in managing their money by educating them rather than beating up the banks. I understand that in France it is normal banking practice to just not pay if you have insufficient funds. If you write a cheque with insufficient funds it is fraud, If you do that in France you will be prosecuted and you will have your bank account(s) closed. They also, as in most other European countries, charge you for current accounts.
For retail customers the UK banks are excellent. Good service, plenty of competition and easy to change to another if you don’t like the service from the one you are with.
I have been using banks for 69 of my 73 years and never had a problem. I move from bank to bank to get the best deal for me, just as I move from any other supplier if I can get a better deal. Whether that is buying a car or buying potatoes.

I think it is fair for Which? to champion consumer issues and to give us, its members, information on the best deals, but not to pander to people that can’t be bothered to make the effort to manage their own money. After all most people reading Which? I assume are doing so to help themselves in making better decisions in managing their money, whether that is buying better products or getting better savings or borrowing rates. It is not for those who can’t be bothered to try.

Oliverj says:
13 February 2016

6 years ago I went bankrupt as I could not keep up with payment of a loan and general cost of living bills. The major contributing factor was bank fees. I was trapped in a cycle, missing payments by £5-10 a time, having those payments reversed and bank charges for going overdrawn. Paying those charges made it even harder to pay the bills. I was often losing £90 a month but one month it was as much as £270. Most of those transactions that took me overdrawn were on the same day.

Don’t get me wrong. I went overdrawn and there should be some deterrent to that, but when I was charged £270 I was overdrawn by less than £60 but charged per transaction. It could have been worse, there are banks who charge per transaction and per day.

That £270 was almost £100 more than my loan repayment. But as I was always catching up with last months bank fees I was unable to fully pay this months bills. My current bank treats you much more fairly when you go overdrawn-although it’s only happened once in 2 years. But I’m very aware of big banks out there charging huge amounts that have no relation to the costs incurred. Practices like these keep people trapped in debt. This needs to change

That is the message that needs to be broadcast far and wide, Oliverj, – that an overdraft is like quicksand and the further in you go the worse it gets. Not enough emphasis is put on this in education and publicity.

I think banks need to take preventive action at the first sign of a customer getting close to the quicksand, not leave it until they are in it up to their necks when even the bank is likely to be a loser as bankruptcy intercedes and out of desperation the customer is driven to illegitimate action of some kind or other.

What this petition has missed, is it allows entering one bank only, whereas these days many have accounts at more than one bank.

The greedy bankers caused the biggest crises to affect ordinary working people, needing to be bailed out by those same people, and just this morning the news tells me they are again awarding themselves with eye-watering bonuses, enough is enough

“What I do not like about about Which?’s campaign, and its attitude, is that it appears to support people taking unauthorised overdrafts.” (Malcolm)

As I said in my first post in this topic I suspect what Which? is doing is questioning whether those who accidentally wander into the unauthorised zone through no fault of their own should be penalised as heavily as they are.

If the bank sets the overdraft limit at a derisory level and the customer then has a DD payment for their rent coming out it can cause of lot of problems for those who are holding down several jobs and being paid on an hourly rate. This is not hitting the salaried, relatively well-off; it’s hitting those on the lowest incomes, working as many hours as they can. It’s massively unjust and the banks need to be held to account.

Ian, I suspect we see this partly in the same way. A relevant bit of my comment that was not in your quote was ” go into the red on more than just isolated occasions”. Those you regularly go overdrawn when not authorised are abusing their agreement with their bank. If they are creditworthy then they should arrange an overdraft facility.

I believe that those customers who in isolated instances go into the red by a small amount should be treated leniently by their bank, and advised, if appropriate, to arrange an overdraft. Not doing so is like taking money from a friend’s wallet without asking.

It is a personal responsibility to understand your finances and arrange your affairs accordingly. When raising a family we had to carefully look at outgoings against income, and managed it successfully.

Richard Everitt says:
13 February 2016

The penal charges for going a few pounds or pence over your limit should be illegal. The charge should be tied to the cost which is minimal. After all many banks are paying US only 0.1% interest!!
It is also ridiculous that whilst savings accounts pay derisory interest current accounts are paying several per cent thus encouraging people to keep all their savings in a current account and be targeted by con merchants as has happened many times recently.

Richard, the bank I am with does not charge if you go overdrawn by up to £10 – whether you have an arranged overdraft or not.

Not sure if you are aware that a bank would not give a over draft on a current account but offered a credit card . Reason given was the over draft on this account did not credit score but passed the credit score on the credit card!!!! Coming from the banking world I know that you use the same credit score system, this is simplely greed , miss selling . They charge for the credit card , the overdraft is free. They need to investigated.