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Banking scandals: time to switch account?
If the latest banking scandal has left you outraged, vote with your feet and find yourself a new bank account.
by Victoria Bischoff on Jul 03, 2012 at 16:55Follow @VBischoff
The ongoing RBS and Natwest banking debacle and Barclays’ rate-rigging scandal have left the public outraged.
So outraged, in fact, that not only are 'Barclays', 'Bob Diamond' and 'Marcus Agius' trending on Twitter, but bank customers have resorted to doing the absolutely unthinkable: switching current accounts.
Voting with your feet
Nationwide today boasted that it has seen an 85% increase in the number of customers switching over their main current account online in the past week.
This means that overall, including people switching in-branch, the building society has seen a 26% week-on-week increase. ‘Customers are clearly unhappy with recent events and are opting to vote with their feet’, said John Crossley, Nationwide’s head of current accounts.
A spokesperson for HSBC, meanwhile, said it too had seen a jump in the number of people switching accounts – with current account registrations up 5% across HSBC and its sister bank First Direct. ‘We’ve not seen a flood of calls, but that could change as the story develops,’ he said.
Santander, on the other hand, said that for them it’s merely business as usual, while Lloyds declined to give out any information.
Where should you switch to?
Although the figures do not show exactly how many people have switched current accounts in the past week, as far as I’m concerned any indication of an increase in activity is great news.
Just last year, we saw in Sir John Vickers’ banking report that a huge 75% of people have never even considered switching current accounts, with just 7% having switched in the previous two years.
And as the report pointed out in no uncertain terms, if we want to boost competition it’s vital we get more people switching. However, the question is where should you switch to?
The regulator has made it more than clear that Barclays is not the only major bank to be caught up in this rate-rigging farce, confirming that RBS and UBS are both also under investigation. Chancellor George Osborne also named HSBC but the FSA has since said that while it does have a a number of ongoing investigations HSBC is not one of them.
However, the FSA can only speak from the point of view of the UK – different regulatory bodies all around the world are currently looking at a whole number of banks.
And then there are the multiple mis-selling scandals which have hit the banking industry in recent years to take into consideration – in fact it was only last week that Britain’s biggest banks agreed to compensate the small and medium-sized businesses that had been mis-sold interest-rate protection products.
More about this:
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- Bob Diamond quits Barclays after threat to regulators
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