19 September 2012 / Money

Let down by the banks? It’s time for a Big Change

Richard Lloyd Executive Director

Comments 223

Five years on from the start of the credit crunch, almost three-quarters of people don’t think that the banks have learnt their lesson and only one in ten believe that bankers act in our best interests.

We thought we’d seen banking at its lowest point when the public were forced to bail out the banks but since then we’ve seen the Libor rate-rigging scandal and continued mis-selling. All the while the bankers who presided over corruption continue to enjoy hugely inflated pay and bonuses.

The ‘Big Change’ campaign

Consumers are continually being short changed – we need to see Big Change in banking now. We’re setting out three simple asks to kick-start this change.

Customer service should come before sales, standards and ethics must improve, and bankers must be held to account. We want banks for customers, not bankers.

If we can achieve these three goals we’ll go some way to restoring the public’s faith in the banks. And so for the detail:

Bankers should put customers first, not sales. We want pay and bonus schemes introduced at all levels within banks to prioritise customer service not sales.

Struck off for malpractice

Bankers must meet professional standards and comply with a code of conduct. We want professional standards to be enforced in the banking industry. Like in the medical profession, staff would have to adhere to a code of conduct and they could be struck off for malpractice. Bankers at the most senior levels should have compulsory qualifications and training in ethical behaviour and resolving conflicts of interest.

Bankers must be punished for mis-selling and bad practice. We want senior executives held accountable for mis-selling and poor conduct, and stronger criminal sanctions – all the way up to board level – if they have presided over corrupt practices. Bonuses should also be clawed back in the event of mis-selling.

Pledge your support for Big Change

The government has set up an inquiry on banking standards that will provide recommendations on how the industry needs to change. You can help by pledging your support for the Big Change campaign and asking your friends to do the same. Let’s tell politicians and the industry that banks should be for customers, not for bankers.

We’ll be holding a consumer event with the inquiry’s members on Monday 24 September. If you have a question that you’d like the panel to answer, post it below. We’ll be posing your concerns to the panel on the night and posting their responses below.

Comments

223

Essell says:

8 December 2012

There really are simple solutions, if only there was a will to implement them and they would become self regulating.

One suggestion. Money is expensive partly because banks borrow from each other to re lend to customers at a more expensive rate, hence the LIBOR scandal. Simple solution! Stop banks lending to each other and only lend what they have from their own resources. if they need more money, go the BOE and ask, but they must understand they will have to explain to the BOE why they need it and prove they can pay it back, just like we have to and maybe even put up security .

This will do 2 things. Allow BOE to monitor bank’s borrowing habits and maintain a watching brief that they are behaving responsibly. The more often the bank goes to borrow money the more they will have to explain what happened to the previous lot.

This could be repeated all over the world with the US Treasury monitoring American banks, ECB monitoring European banks etc. simple really.

Suggestion no 2. No bonuses of any kind to be paid in cash. Only in shares and at the end of a person’s contract. If the bank has been run properly, chances are the sure price will have risen, so the shares will be worth something.

Suggestion 3. Any banks and bankers that have derived share options and cash bonuses from artificially inflated figures fraudulently put into manipulated balance sheets, should be changed with fraud, repay all bonuses and share options given while they were in office.

This might see some responsibility and honour return to the banking sector which would be long overdue and wouldn’t it be nice to see Goodwin, Diamond et al really pay for their sins as we woud have to if we had committed such gigantic frauds.

Julie says:

8 December 2012

Superb suggestions Essell. Accountable banking! I’ve never been able to understand why they are above the law…..maybe it’s because the politicians are in their pockets and bankers really govern the economy.

Essell says:

8 December 2012

Thanks for the support Julie. Maybe the tide is turning, albeit very slowly, but the juggernaut that is the banks, tuns like a super tanker and not a speedboat and it does take time.

The difference now is that there is worldwide revulsion, suspicion and disgust at how these parasites have been allowed to get away with their felony, so I would really love to see a class action against all of these banks and Indiviiduals, for the return of their ill gotten gains and criminal charges brought where appropriate. That would really shake them up.

It would need a few thousand participants, but I think it would gather momentum and. I bet there would be a queue of Major corporate lawyers itching to get their teeth into something like this.

Anyone interested?

Brian says:

9 December 2012

Essell – you have stated more or less what I have said in this dialogue some time ago.

Banks should only lend those deposits “over the counter” from customers. This cuts out the wholesale or interbank market which is the main source [as you have said] of the problems. The LIBOR/wholesale bit allows speculation and investment banking to be involved which is where matters have gone badly wrong.

Bonuses – again you are spot on; these should be properly earned and paid in shares not cash.

Your comments are very pertinent and welcome.

Boris says:

9 December 2012

The Banks have had so much power that they have torpedoed every attempt by the Financial Services community since 1986 to prevent them from selling financial products and services other than deposit-taking and lending. So now the new regulatory regime will have to have another go, so that product sales will no longer be available as a source of profit for retail banks. This would prevent mis-selling by bank staff of all forms of insurance and of inappropriate “investment” products including pensions. Funds managed by the banks would have to stand (or more probably) fall on their performance rather than the footfall of banking clients, and all those so-called “financial advisers” employed by the retail banks will have to pass the new exams and stand or fall as fee-based advisers. The new rules coming into force on 1st January may help, but we need Which? to keep up the pressure. Retail bank branches (and those of Building Societies) are not the place to go for financial advice, products or services.

Richard says:

9 December 2012

There would have been little need for austerity if it had not been for the banks panicking, and being allowed to place companies into administration at the drop of a hat. After doing so, flooding the markets with the assets that they want turned back into cash, at whatever price they can achieve. Yet by them alone flooding the market in the first place, they have themselves lowered the demand and thereafter the sale price achievable.
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We hear the same time and again, that the bank never carried out any due diligence, had little or no understanding of a business, allowed an inexperienced manager to make a decision, yet they were allowed by the courts to appoint administrators, and what then?
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The majority of the time, if not all, the administrators have little or no interest, other than securing there fees first.
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I have been in litigation with a well known high street bank for over four years, and never in my entire life have I known such deceit, it has been an almost impossible task to obtain disclosure of any sort, let alone disclosure of the true facts, even through the courts. If I had never experienced it I would not believe it.
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For almost four years this well known high street bank has been in denial of the evidence in proof, that I had discovered and put to them, that being that they had created and circulated inaccurate information.
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It was not until three years after I had provided the proof to them that they admitted to it, and it was only after being questioned by the local authorities that they did admit to it. Even then, they were still in denial of any damage caused, yet the company was long gone, liquidated by the administrators after they had absorbed most of what had been recovered during the administration, and still today and the saga continues.
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I will continue in my endeavours, as I have almost night and day for the last four years, to bring this bank to write their wrong. The same wrong, their wrong, lead them to make allegation, wrongful, of fraud, forgery and deception, and to add to the misery and suffering the FSA, Ombudsman, HM Treasury, Prime Minister do not want to know, both the FSA and the Ombudsman say they cannot get involved because the company was a Limited company, and there will be tens, if not hundreds of thousands of business people tied up in litigation of one sort or another with either the banks, or administrators, or both, being bled dry of any worth they have left, be it mental, physical or monetary, and everybody wonders why the economy is in the mess it is.
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There needs to be legislation put in place to stop the banks being able to place companies into administration as easy as they are / have been doing, and there needs to be some sort of legislation that ensures nothing less than absolute transparency from the banks, the government, and the governing bodies they put in place.
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Until such time as this happens we will continue on a downwards spiral, it may improve in the short term, but it is inevitable, unless the changes are made, it will all fall down again.

Essell says:

10 December 2012

How I sympathise with you Richard, but regrettably, your story is far from unique. The bank’s strategy always seem to ‘beat the little guy over the head with a stick for long enough and he’ll go away’. You’re showing enough resolve not to do that.

Imagine how many hundreds, if not thousands, are having the same fight as you. You simply become ‘itches that they can scratch’

Imagine how much harder it would be for the banks to behave this way, if you all got together, as I have suggested before, to bring a class action against these parasites for the return of all monies rightfully yours +damages for being deprived of it in the first place, plus all the expenses you’ve had to incur up to this point. A few thousand of you each paying, say, £100 into a fighting fund would be enough to retain a top corporate Barrister to take on these thieves and finally bring them to book, individuals as well as the banks themselves. The more who join the class action the cheaper it gets and those having the action brought against them could be asked to pay a significant amount of money into court for “security against costs” in the event that you win your case.

Imagine how much more seriously you would then be taken, which must increase the chances of sensible out of court ‘settlements’ or similar, because with the present anti bank feelings pervading throughout the public domain, they will want to put an end to the bad publicity ASAP.

Carol Jenkinson says:

10 December 2012

As a Halifax Staff member, I watch the daily behaviours from Senior Management, in order to hit daily sales numbers.

Senior staff members bully and harass staff members that they supervise. They are forced to go on daily calls to explain their sales numbers – they are even sworn at and threatened with their jobs.

The sales culture has gt worse, not better and needs to be addressed quickly.

Richard says:

12 December 2012

Essell

FIRST OFF PLEASE LET ME SAY, ALL THOSE IN SUPPORT PLEASE GIVE THIS POST THE THUMBS UP AT THE BOTTOM.
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Thanks for your post, and yes I agree, and it is the same old same old, getting around to it. I did attend a forum or two with a group mostly set on doing the same thing, but solely against RBS, which did not suit my needs, my grievances / arguments are with different banks to them.
I made the exact same suggestion in those forum’s re making it compulsory for each person to set up a standing order going into a cash pot looked after by a nominated treasurer of the forum.
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I also suggested that each case / member of the forum / group (if dealt with separately) should agree to donate to the group a percentage of any compensation / out of court settlements / awards they received so as to increase the momentum of the actions being issued, it being the snail pace of the litigation system.
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I am now asking anyone out there if this is something that is already up and running. Which if it is, I would look to join.
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If it is not already up and running, then;
1. I am asking for all those who would like to see it up and running to respond to this post, saying they would like to see it up and running, and;
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2. In addition to number 1 above, I would like all those willing to join in the potential class action, who are willing to donate a fixed amount on a monthly basis to an group action cash pot to say they are willing to donate a set monthly amount. At the same time making a suggestion as to what they think is a reasonably amount to sett as the fixed amount.
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There after I can take some legal advice as to setting the whole thing up.
Which brings me onto the second ask.
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Are there any commercial litigators (who are specialist in banking, class actions etc) out there, who would look to take up on such as the above in acting on a group / forums behalf?

Steve T says:

16 December 2012

Halifax is meant to be a bank, right?? A bank primarily deals in money, right?

Why then can’t Halifax give small amounts of change to its customers (like 4 £5 notes for a £20).
Surely thats a basic service they should be providing??

Tom Whitburn says:

20 December 2012

I must say that I have no such difficulty with the Bank of Scotland. I have recently exchanged torn notes, Ulster Bank Notes and bags of change into notes of whichever denomination I wanted. They did, however, want to confirm that I was an account holder, presumably to stop customers of other banks clogging up the system.

Paul Dean says:

24 January 2013

I have been banking with Santander formerly Abbey for several years now and have recently been chosen for their Select account. Well what a difference, I have the name and direct line phone number and mobile number of my personal manager who operates from my local branch, she answers the phone, returns calls and even rings back if she misses a call. I seem to remember this service was a given with most banks, what 15 – 20 years ago. It has taken a while but at last Santander are listening, customers matter, without them you go bust. Well done.

John Vickers says:

24 January 2013

I am disgusted withe recent advertising of a certain bank who claim to give theoir customers extra, no all they are doing is giving away the money that they took of their customers in exhorbitant charges and fees, and using this cash to entice new victims

Ian says:

29 January 2013

BOS have come up with a new wheeze to screw their standard current account customers. Up until October if you had an agreed overdraft of up to 2500 you paid £1 for every day overdrawn. fair enough you knew they would get 1 to 31 quid off you a month.
Their new trick which appeared apparently in tiny small print is a variable % charge based on some unfathomable formula which results in them scamming minimum 50 quid a month on a turnover of 2500 quid.
Scandalous. Im shopping aound. Been with them 50 plus years. Screw them

Tom Whitburn says:

29 January 2013

The very latest ruse of the Bank of Scotland must be another attack on the Rewward Account which they told me about today. After May, unless I have at least two direct debits coming off my account every month, I will not receive my £5. I have changed all my direct debits from monthly to annual in order to save money. As a result of this, I will be penalised.

Brian says:

29 January 2013

I was MD of the Isle of Man subsidiary but retired early at age 51 in 1996 due to illness caused by severe stress. The old bank had changed in the years I was with them when USA style banking [if you can call it that] was introduced which meant “bottom line profit at all costs – do not pander to the requests of customers just treat them as units of profit”

Your comments do not surprise me. At times I am ashamed to describe myself as a banker due to the stigma it carries these days. There are no bankers left. The boards are now full of accountants some with MBA qualifications which means what? We need to revert to old style retail banking. One may see this if the UK government decides not to cherry pick the Vickers report.

Andy Alton says:

10 February 2013

If you have some cash to spare why not open a Zopa [or other peer to peer lending organistion] account. This way the banks are bypassed, you get three times the rate of interest on your savings & deny the bankers the priviledge of fleecing you. Equally peer to peer borrowers get lower interest rates too. If we want banks to “wake up & smell the coffee” then there is absolutley no doubt that this kind of activity [that eats into their profits] will do the trick.

spydersweb says:

10 February 2013

I/we have already closed accounts with Bank of Scotland as it is the only way as a smaill client/customer can show disgust at their attitude, however, having heard that their current “BOSS” has loaned his old boss at the bank a loan of 12.5 million pounds for 5years charging him NO interest during this period. Who does the guy think he is that he can wave two fingers at us the account holders and savers as well as being normal tax payers who baled this company out in the first place to save his job. It is we the tax payers who own the bank and HIM but he uses his clout for personal gain and his buddies in the banking world. The government sits back and does nothing, doesn’t wrap his knuckles or better still kick him out as you or i would have done to us by our employer if we stooped to do the same thing for a pal, so the only way we can show disgust is with our feet and move our account which we are doing tomorrow.

Paul Dean says:

10 February 2013

I whole heartedly agree with spydersweb about moving his account, trouble is I have done this so often I have run out of banks to choose from. Lets face facts they are all tarred with the same brush and we need to lobby our MPs at every opportunity to enforce change. The trouble is I suspect that if every Banker that deserved the sack got it the number of unemployed would rise so high there would be outcry.

spydersweb says:

11 February 2013

Thanks Paul for your comment and thumbs up.
However, in my initial text i made one fundimental mistake. I said he was getting 5 years without any repayment, infact that should have said 35 yes 35years!!! We the taxpayer and people who have paid to bail them out are suppose to sit back and say nothing, yet we the so called “share holders” had NO SAY in any of this, won’t see a penny of our hard earned cash back, where as, the guys who run the country and gave their ok to pay the bail monies and watch the bankers giving away OUR money while they and their ex colleagues get ever richer and the politicians just shrug their shoulders and accept things saying “we all learn by our mistakes”. YES, in their world they do by getting promotions for pulling bigger and bigger “bank robberies” classified as “using legal tactics”. By the by where is “Mr Taxman” while all this robbery takes place.??? Is he standing in line to pull back some of their wage for the good of us “share holders” by the sound of things, sitting with his tin helmet and flak jacket on, in his well used bunker?????

J1900 says:

4 March 2013

Anyone who works in a bank branch will be familiar with the phrases daily/weekly run rates, sales points for each product, performance plans, power hours, pings, development plans, quarterly targets, converted appointments. The next time you read or hear in the media that banks have restructured or changed their culture to be more customer focused, you can take it as a lie as on the inside nothing has changed, and so the next time you visit your branch and you’re “pitched” a credit card or a home insurance quote you’ll not be very surprised.

I currently work in a branch that has now started to outbound call customers for sales, cold calling but because they are to existing customers, they are calls seen as meeting customer needs. Another phrase regularly used are stated and unstated needs, in other words needs a customer never knew they had until their eyes are opened by sales advisors in branch.

Multiple sales within an appointment are the only appointments that are successful and so unstated needs have to be found, especially when a manager will ask for an overview of what was discussed during mid morning and afternoon “checkins”, these meetings are designed to see where the branch is with our sales for the day so far and how we’re going to improve them by the end of the day. This atmosphere will naturally lead to mis selling as a consequence.

I wouldn’t mind so much not getting bonuses, that’s not the reason why most work towards the targets, it’s the fear of loosing your job, you are seen as failing at your job if sales targets are not met, this is the only bottom line there is, how many points you have keyed each day and are you meeting your targets. Unless something changes I’d expect most to either not stick it for much longer due to the constant pressure affecting our health or for us all to be managed out of our jobs having not hit the high targets.

Laszlo Majer says:

8 September 2013

When David Cameron said, that they are All in it together, is correct. Politicians, Bankers, Council Executives, and the all School tie brigade are robing us blind with Corruptions, and ever increasing Taxes. Loop holes created to hide tax Havens, for them selves. The round about Taxing of food and other essentials are Taxed by Fuel tax, Petrol & specially by Diesel.
Banks pay 0.5% on savings and charge 16 % and more for borrowing paying them selves Million pounds Salaries & more Million annual bonuses. Local Councils doing the same & increasing council tax on us year after year. This taxation hits the pensioners the most, as we are on a fixed income. Electricity, Gas, & Water companies making very large profits, but keep putting up prices all the time. We do not have a Government, we have a House of, self interested crooks.

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