Will it be a hollow victory for bank customers..?

THE ‘Big Four’ banks here are basically a cartel of rip-off merchants, if the General Consumer Council is to be believed. Today, the GCC has been celebrating (perhaps prematurely) a “major victory” for customers after the Competition Commission published proposals “to sort out the anti-competitive and anti-consumer personal current account market here”. But what happens when the banks a) laugh in the face of these toothless recommendations, or b) withdraw free banking services and start charging instead (as happens elsewhere in the EU)?The proposed package of remedies includes:

Use easy-to-understand descriptions of current account services

Provide clear explanations on the levels of charges and interest rates and how and when they are applied-available

Provide better information on statements including details on charges and interest rates

Provide to each customer an annual summary of charges and interest payments

Give customers at least 14 days’ notice of charges and debit interest incurred from the date of their monthly statement before these are deducted from their account

Send an annual reminder to customers about their right to close their account or switch it to another bank

Introduce improvements to the switching process, including offering a charge-free and interest-free overdraft facility to new customers for at least three months

  • Chopper

    Banks are only out to make money and from who us

    Take a stand and don’t let them off with it change to a bank that will put your interests first

  • Plum Duff

    I’m sorry I didn’t switch accounts before I actually did – about 2 years ago. The whole transaction was painless ans everything went remarkably smoothly. You need to keep an eye on Standing Orders & Direct Debits to ensure everything is transferred. Other than that – easy-peasy.

    What struck me, however, about the whole thing was my own initial reluctance to leave a bank (First Trust) in which I’d been a customer for 30 years. Talk about misplaced loyalty! When I went down to ask for the account to be closed (after I had arranged with my new bank re the transfers) they inquired as to why I chose to leave. I gave them the reasons, fee hikes, overcharging, etc. They shrugged their shoulders, asked for my credit cards, cut them up in front of me and that was that. Not even a blink of regret that they were losing a long term customer and not even a tentative request that I reconsider. They just didn’t give a bollox – plenty of other mugs out there was their attitude. I also noticed that First Trust were the only one of the Big 4 not to respond to the Consumer watchdog.

    Well, sod them. I am now with Nationwide BS which doesn’t charge fees for cheques or DDs, or for an overdraft facility (the other feckers demanded £30/40 pa) and no commission fees on Euro withdrawals abroad. It makes a change being able to keep more of your money now than watch it being sucked away by usurious leaches.

    God, I feel good after that!

  • Plum Duff

    Sorry for typo – ‘leeches’.

  • The problem is people seem to have some kind of loyalty to the local banks, who are indeed rip-off merchants. In GB they’re complaining about the big banks there, but when you look at the local ones the national ones don’t look half bad.

    Frankly I think this announcement is a joke. The information’s all there if people will be bothered to look for it. I’m not convinced banks should have to advertise the fact that people can switch. If people are too stupid to realise that then they’re probably not going to switch anyway simply through fear of the unknown.

    Everytime I see that woman from the NI consumer council on TV I can’t help but feel her office is just another waste of money.

  • Crataegus

    We need to increase the role of Credit Unions, and actively promote them not only as they provide a valuable service in areas where the Banks have deserted, but to increase competition. We also need to ensure that Building Societies are not all privatised. We need variety and competition.

    There is no point being loyal to any Bank as the old Bank set up with a local manager who knew you and all that has long gone. You are a number to them with a credit rating. So to you the Banks should be seen as just another service provider with charges and of questionable service. If you need loans or are lodging money it is you who are providing them business. They need you.

    Open as many accounts as you want, if they don’t cost anything keep dead accounts open for future use and choose whichever you want to use at any particular time. Nationwide and Coop Bank offer a competive Service.

    The sector that really needs a better banking services is the small business sector.

    Also if you think that the charges you have had to pay amount to a penalty rather than a charge lodge a claim against the Bank. At present they are settling such claims out of court.

    Another area that need closer examination is the role of credit rating companies, how multiple applications for loans can affect those ratings, how banks use these companies and how banks use the electoral role and information related to it.

  • Rory

    “THE ‘Big Four’ banks here are basically a cartel of rip-off merchants, if the General Consumer Council is to be believed.”

    I’m sure most of us won’t have the slightest difficulty in believing the GCC, in fact we didn’t really need them to point it out as we have all been most painfully aware of these, what I term, bank robbers, bleeding us white.

    The question is what do the GCC actually intend to do to stop this theft, and I use the word theft quite deliberately as it has been demonstrated again and again that banks were quite illegally overcharging customers for inadvertently exceeding overdraft limits and were miscalculating interest charges always in the bank’s favour with impunity. We can now demand from them that they refund the illegal charges but the result often is that the bank then refuses you as a customer and you find yourself blacklisted as a potential customer of the other banks.

    Shakespeare said, “First, let’s kill all the lawyers”. Perhaps we should reconsider the prime candidates.

  • Nestor Makhno

    I agree with Plum Duff – there is a simple answer for everyone – Move to the Nationwide.

    I finally managed to disentangle myself from the Northern a few years ago and can’t believe I didn’t do it a long time ago. (Their charges were daylight robbery.)

    I have now managed to convince quite a few of my friends to do likewise (including one who is an IT manager with the Ulster Bank!) Nationwide are especially good if you travel abroad as all their foreign credit card and debit transactions are free of charge. This has saved me a fortune and I never have to worry about getting travellers cheques or foreign notes when I travel. Just use an ATM.

    And, of course, they are also an honest building society and are not concerned with creaming off as much of your money as possible to give to share holders.

    (And, no, I don’t work for the Nationwide.)

  • Animus

    Gonzo – in answer to your question, what if the banks ignore the recommendations – it’s up to consumers to make the switch. The GCC can point out flaws but they can’t make people see reason and change their bank accounts in the face of overwhelming evidence of bad value. It does seem rather incredible that some banks do not provide a summary of charges. Would you buy clothing without having any idea how much it would cost? Would you buy a car without considering its mileage and upkeep costs? Yes, you would? Well then, you deserve to bank with the Big 4.

    For what it’s worth, I also use Nationwide, and convinced my otherwise financially savvy partner to do the same.

  • DK

    Pointless report from the GCC. Consumers in NI have access to more financial institutions than either those in Britain or RoI. 3 of the local big 4 already offer free banking. You are only charged if you screw up, which is the same in every bank.

    Implementing all the recommendations will cost money – pre-notification of charges means an extra letter, plus stamp. Changes to terms an conditions means letters to everyone for every account they hold. More costly mail that will be treated by 99% as junk.

    Where will the money to implement the changes come from? Don’t be mistaken to think that the banks will happily take the hit. They won’t and if anything, more of this kind of pointless over-regulation will actually force the banks into a cartel where they will impose a charge on every current account to cover the costs.

    So, the impact of this report may well be to force the banks into a cartel and lead to everyone being charged, not just the dim-wits that can’t remember their balance before they write a cheque.

  • Rory

    Oh dear! DK, forcing the poor banks into a cartel in order to protect themselves from ruthless greedy customers demanding that they not be ripped off. I thought FD Roosevelt had already led the way in recognising the social criminality of cartels and legislating against their formation. Is that just too too 1930’s, too American or simply too fair to consider?

  • I Wonder

    First Direct (HSBC) have an interest-paying current account, extremely flexible overdraft facilities, free DD and SOs and I’ve been with them 17 years.

    They’ve paid ME on average £50 a year for banking with them and NOT ONE PENNY for accessing my money – which is as it should be…. 🙂