/ Money

Why we’re still raging about how banks treat us

Which? banking event

It’s been four years since images of people queuing up outside branches of Northern Rock hit the news. And even now, there seems to be little improvement in the public’s confidence in banks, as our event proved.

Last night around 80 people met at the King’s Trust in London to debate the state of our banking sector. Shadow chancellor Ed Balls MP was on hand to take questions and he really had his work cut out.

It didn’t take too long before trends emerged, with the words ‘greedy’, ‘disillusioned’ and ‘selfish’ being bandied about in relation to the banks. But are the banks really that bad – surely after two years we’ve seen some improvements? Apparently not.

Bail out or cop out?

One attendee hit the nail on the head; she felt that the problem was banks are happy to hammer anyone who goes overdrawn. Yet when they get into fiscal difficulties they know that the taxpayer, their customer, will bail them out.

Another slammed the banks for imposing ridiculously high charges – of £100 – just because she had gone £2 in the red.

The mood in the conference centre was pretty dark at this stage, with a real sense that people were genuinely upset with the way they have been treated by the ‘fat cat’ bankers.

Ed Balls responded to these comments by acknowledging that the banks have been let off the hook, and that they ‘should never be allowed to play that gambling game again.’ He added that no one wants to be carrying the can for the banks and the sooner they are able to take control of their business without taxpayer support the better.

This went down really well, but the point remains – these are huge, powerful institutions that are able to impose their unfair rules (or charges) as and when they like, while the rest of us have to strive away and pay the cost of minor indiscretions.

Let’s face it, going £2 overdrawn and paying a £100 fine is excessive, especially when you’ve sought assurances that this can’t happen. And the insult is compounded when you think that the bank chiefs who got us into this mess have chauffeur-driven limousines to carry them and their fat bonuses back home, leaving a trail of chaos behind them.

Treating customers fairly

One of the central mandates that banks are obliged to abide by is ‘treating customers fairly’, which was a point our chief executive Peter Vicary-Smith returned to on more than one occasion, and was acknowledged by Ed Balls. It sounds so sensible, so obvious that you have to wonder why it’s not acted upon. But then again, that’s the banking system for you.

I don’t know about you, but I feel that the banks have sat back, that they have been riding their luck and have little regard for their customers. I don’t feel my bank has my best interests at heart, do you?

Comments
Member

There is still rightful debate about why banks are still paying big bonuses. Surely the debate is why are banks charging so much that they can pay such obscene bonuses.

Member

Very easy for Ed Balls to say that banks have been let of the hook. He was economic advisor to Gordon Brown from 1994, chief economic advisor to the treasury from 1999 to 2004 and was named the most powerful unelected person in Britain. You would have thought he had plenty of opportunity to stop the banks getting on the hook in the first place.
Strikes me that Balls Up would be a more appropriate name.

Member

I have to point out it was a WORLD banking crisis – Ed Balls was NOT the advisor to the entire world yet the entire world suffered from the BANKing crisis. The deregulation was carried out by Thatcher and Regan.

The US Banks sold sub-prime mortgages that failed – those failings sold on – The Bank of England was supposed to have over supervision. – not Ed Balls

Member
Stach Odrowaz says:
10 September 2011

It must be underlined that it is essential for people to have confidence in the banks.
Bank reform should thus concentrate on achieving public confidence in banks.
This can only be achieved by splitting banking operations into retail and investment with their capital isolated. Retail banks will thus collect capital from depositors and lend money against securities or credible business plans, scrutinised by competent and responsible personnel.
Investment houses can be free of restrictions for those who hope for larger profits accepting possible risks.
Whereas bailing out the banks on the retail side is justifiable, losses in investment banks are not, and that side should not have been bailed out.
The government shpold have systems in place to monitor banking systems , regulations and performance, with authority to implement cganges.

Member
Adrian McTiernan says:
11 September 2011

I have fallen fould of banks and thier crazy ways. Lloyds gave me a loan, and I was OK paying it back monthly, together with other payments. However, banks are very inflexible, and I depended on my pension being paid into my account as my only income, and they insisted on a monthly payment on a particular date in the month, whereas I get paid same day every week. On one occasion, the pension and the payday were on the same day. To my alarm, I found that at midnight, the bank took out payments, but waited until 1am to pay in my pension. On this occasion, there was not enough to pay my regular payments, and the bank refused to pay my regular payments, AND charged me £30 for not having enough money available to pay. The people who were waiting for payments that day also did not get paid.

Sure enough, I ended the day with about three unpaid committments, charges from the bank, and charges for late payment from those who should have been paid. Lloyds also tried to collect a loan balance from a friend whose husband died of a heart attack outside my house. He had left her, and was living alone. Although loan debts die along with the person who had taken them out, she was hounded by Lloyds for two years, until she took legal action against them.

I changed banks to Yorkshire bank, and although my pension does not arrive at the bank until Monday, they credit my account on the previous Saturday morning at midnight Friday – way better than Lloyds – I think every bank would do well to take example from them. And they are Australian – not British, so top marks to the Aussies, and Boo to the greedy national banks here. I think bank charges are worse than loan sharks would blush to charge – and I suspect those in Government are closely in with the banks, and tend to leave them to it, whatever politicians say. I also object to bailing out banks when they mess up – the farce over where they invest in crazy and unstable things like the American Mortgage scams, which caused havoc a few years back, is an example where they should be disciplined. I don’t see why we should prop them up, but then they are associated with the Government, and so I suspect we won’t see much improvement – and a lot of local councils invested our money on the same mortgage scams, and lost loads of our money, and then want rates to rise – pathetic crowd of wasters – I would fire the lot, and get a careful houswife to organise the banks – she would do a cracking job at it I am sure.

Member
Mikhail says:
12 September 2011

In the US, they are suing irresponsible banks, in the UK they reduce tax & interest rate for them.

Member

People are still angry at banks? Is that a surprise to anyone at this point? Of course people are still angry. The staggering greed and level of risk-taking is something that’s going to have negative consequences for the nation’s poorest for years to come.

Member

What’s called “good business” by banks here in the UK is called “racketeering, a felonly offence” in the US.
I started banking with the GPO years ago because I liked the idea of it owned and guarenteed by the BOE, I wasn’t happy that it got sold to A&L, and now I find it’s owned by a Spanish bank that could go under with the Greeks any day now? I want a UK bank run by the BOE again so I can put my hard earned income and savings in this country again, or nationalise the banks again, simples!