The CMA’s proposed changes to banking don’t go far enough

Sam M….. here’s one ! I’ve banked at all the “Big Five” over the years, and left for the same reason : indifferent, ignorant, uninformed service; however, Nationwide are the best of the bunch thus far.

Once a bank starts to collapse [e.g. Northern Rock] the authorities have no choice but to prevent that and to throw a lifeline to rescue the depositors. The trick that eluded previous governments is to prevent a collapse in the first place through sufficient reserves, adequate controls, and strict regulation. Whether we have yet attained that happy state of no more banking failures remains to be seen. Letting banks go under, dragging down millions of personal customers with them, is a brave suggestion, and switching banks would then be a bit like Russian roulette. There has been no suggestion that Northern Rock was corrupt; it got greedy and over-reached itself. Other bank misfortunes have been due to improper behaviour that probably was corrupt because the intention was to manipulate the markets for both corporate and personal gain. Some heavy fines have been imposed on the banks but in most cases the individuals involved have been allowed to quietly leave the scene with their career and reputation in tatters. I would agree with imprisonment if it were funded by the perpetrators.

Dee, I’m surprised if you paid nothing when making use of your overdraft. Normally interest on the “loan”would be payable, wouldn’t it? Some banks I think do not charge for the first £few say, but let us know if you find a better bank. As far as I know, Barclays don’t charge interest as such but a daily fee after the first £15 you are overdrawn (which is free). It goes from 75p to £3 a day depending on the overdrawn amount.

Why should we have to put up with substandard companies, Malcolm? I’m fed-up hearing about vote with your feet and it’s time we kicked with them.

Which? recommends:
– Look at forcing banks to more proactively help customers who regularly use an unauthorised overdraft, as well as increasing compensation for customers who suffer poor service

–Regularly name and shame the worst providers for bad behaviour

–Consider how banks can put people in control of their overdrafts, for example by notifying customers before they go into the red

To complete my post, I’m happy with the service my bank provides but I do support Which? taking action to support the needs of customers who are less fortunate.

How about banks rewarding customers who don’t use authorised overdrafts?

Please can I have mine backdated, Derek?

If only other more important things in life could be backdated. 🙂

When there are better places to do business, whether banks or anything else, and you are dissatisfied then the proactive thing to do is to move. And there do seem to be better banks from people’s reports here.

As far as “regular users of unauthorised overdrafts” there is nothing to stop someone with money difficulties talking to their bank about the options available – including getting an authorised overdraft or reorganising their payment dates. Money is a personal responsibility and you need to attempt to take the initiative to look after your affairs. Regularly taking money from the bank that they have not agreed to is not only expensive, it is a little dishonest. What if you can’t pay it back? Would you shop in Tescos and expect to get to the checkout with £30 of goods and not pay for then because you hadn’t got the money?

3% only have changed banks – says a lot about the strength of feeling. I’m all for seeing services improve but let’s take some personal involvement in helping positively where it might be necessary.

It would be interesting to know the origins and destinations of the switchers, and the reasons for the switch.

We should not ignore the fact that a lot of people organise a change of bank independently, as I have done in the past over a period of two-three months, and this will not show up in the CMA’s statistics perhaps.

On the other hand, many new accounts are opened every year and it is likely that most of those new account holders have made some comparisons and decided where to hold their current account for a whole variety of reasons, sometimes more personal than financial. Unless their circumstances change or their choice of bank does something bad for them they are not likely to switch in a hurry thus reducing the number out of which a switching percentage can be claimed.

Some of the three percent who switched might have been people who decide to replace two accounts with separate banks with one joint account with one of them so the switch was not because of any dissatisfaction. Others in the three percent might have changed because of a change of job or location, again with no question of dissatisfaction arising.

It is quite possible that hardly anybody switches banks at all demonstrating almost total satisfaction with their choice of bank.

“It is quite possible that hardly anybody switches banks at all demonstrating almost total satisfaction with their choice of bank.”

That’s a good thought.

I have a colleague who recently switched to the Santander 123 account so he could get some interest on credit balances. However, while interest rates remain low, the potential rewards versus the potential risks and bother of such actions are finely balanced. Hence, the “do nothing option” that minimises risks may turn out to have quite acceptable costs.

And the £5 monthly charge [up from £2] being introduced in the new year for that account will make it unattractive for many I expect. But inertia will no doubt prevail.