Citywire for Financial Professionals
Share this page:
Stay connected:

Citywire printed articles sponsored by:


View the article online at http://citywire.co.uk/money/article/a601604

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 16:55

Banking scandals: time to switch account?

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.

Sign in / register to view full article on one page

26 comments so far. Why not have your say?

BoW

Jul 03, 2012 at 17:54

Perhaps somebody should just announce which banks did NOT participate.

If I was in such a bank I might have the PR machine already prime.

report this

Alan Tonks

Jul 03, 2012 at 17:54

Victoria which era are you living in, when we had many different banks and professional bank managers I would have totally agreed with you.

This isn’t the case unfortunately; we are living in the here and now, where we have many fewer banks and even less professionalism.

So it isn’t the case of changing from one bank to another, you just have to force the incompetent bank you are in, that you are not going to be messed about.

I have to say that it isn’t easy but it can be done slog that it maybe. I will make it clear though, it has absolutely nothing to do with the waste of space ombudsman, the saviour of all companies.

report this

Vague Shot

Jul 03, 2012 at 17:59

I bank with Nationwide, but all I use them for is to handle money, as I keep my savings elsewhere, like a couple of buy-to-lets and Zopa.

One of my best friend's was a bank manager, who rose to the top of the UK Banking Industry, ending up as Business Banking Director for a major High Street Bank. He gave me two rules on personal banking in about 2002.

1. Never bank with a bank headquartered outside of the UK, as you don't know the way that government will jump in a real crisis.

2. Never bank with a small bank, as they might end up being run by a megalomaniac.

Sadly my friend died in late 2007.

As a computer man, I would always bank with a bank that has control of its own computer system in the UK. And preferably close to where all the managers and decision-takers work.

report this

Jack Tarr

Jul 03, 2012 at 18:10

Sounds like a good case for the Co-op bank.Looks like Lloyds will be selling a few hundred branches to them and they own the Britannia Building Society.I am considering after 47 years with the Nat West and its precursers.

report this

Mark Lance

Jul 03, 2012 at 18:38

Unfotunatly these bankers are much of a muchness and similar to estate agents, if regulation or lack of it lets them profit by taking advantage of its customers and they are bonused in this way and financially benefit from this then what do you think they will do?

Yes if you can find a bank with good ethics then switch to them, but like the ppi scandal do you know of any that are whiter then white?

You will probably just find different shades of grey!!!

report this

Ladysaver

Jul 03, 2012 at 18:48

I don't believe people will switch bank accounts in huge numbers because of this. Maybe they should, but I'm not inclined to believe they will. In the end, people want their current or savings account to give a decent rate, decent service and to be easy to access / convenient (most of us have better things to do). Nationwide is boasting. It should be careful what it wishes for - it's not bad, but it's not top of the tree either for rates, service and treating customers well.

report this

Vague Shot

Jul 03, 2012 at 18:55

You have to decide what your bank is for. For me, it holds money, pays my bills and allows me access to cash machines. If I want insurance, I go to an insurance specialist. I also have one credit card with my bank and one with John Lewis. It's the same as with anything. Set your objectives and get the best for each.

One thought. You wouldn't buy a car without a test drive, but why can't you move to a bank for a probationary period. If they don't fit your objectives, then you can chsnge back and they pay yoir costs.

report this

Meltonian

Jul 03, 2012 at 18:58

Don't forget your local credit union. CUs are full members of the FSCS so up to £85,000 is totally safe and they are locally run.

At the same time you provide support to other members who cannot get loans from the big high street banks. The rates are good; locally here in Leicester 1% on instant access.

report this

Vague Shot

Jul 03, 2012 at 19:09

I agree about credit unions, but the regulations don't let them get big enough to make a difference. This is protecting the banks.

On the other hand, I have had money in Zopa for nearly five years and get upwards of 5% before tax and after all charges and bad debts. It isn't quite instant access, but I can either take the interest I earn out into my bank account or reinvest it. Over the last two years I've been living off my Zopa money, so I just draw out a few hundred each month and then I reinvest any more in new loans.

report this

kathleen wood

Jul 03, 2012 at 19:57

I rather like Santander but tend to watch banks like a hawk anyway and always get the best deals going, on just about everything!

report this

Bernard Bedford

Jul 03, 2012 at 20:22

Quoting a relative ratio in the absence of any understanding of absolute numbers of clients normally changing to Nationwide each week is utter tosh. 26% of not very many is ..... not very many more.

An alternative to Zopa, but with the risk of share price change, are the PFI investment trusts, eg. HICL, INPP, JLIF. giving dividends of around 5% and backed by the Government's generosity. The shares can be sold to provide relatively quick access to funds. Some contracts currently going to 2040.

report this

Ian Lees

Jul 04, 2012 at 06:55

I am one of the people who switched away form Nationwide as a result of the fraud covered up by Graeme Beale CEO of Nationwide and the thugs and racketeers at Nationwide. Nationwide refuse dme access to £ 500 in cash from my own account - by the Nationwide teller - who carreered around cackling - like a laughing policeman in a blackpool booth - when I confirmed I would report her. This demonstrates how there is one law for the Visa card salesman Graeme Beale and the insurance company directors - who run Nationwide and their claims to be a " mutual ". Natwest also refused me access to my own cash because I wanted the return of my own £ 1,000. Natwest also refused - and I made a cheque out for £ 999-99 p which the natwest teller asked me for one penny - and she paid out £ 1,000 - after thrity minutes of aggravated hostility from " the helpful banking " at Nastywest. Owned by the Robbing bank of scotland - one can see why a scottish bank refuses acces ot cash ( as they need it to pay for their hooses of Parliament - and the failure infrastructures of placing rails for the overpriced Edinburgh tram system - which may be as long as the hundred metres dash - in the oly him pics later in the year. Clearly consumers who provide their cash - on loan, now restricted by the oimposion of the requirement of the Visa card - which is only a licence to borrow money - charged and with high levels of interest - the plastic visa card is a strategic means of disengaging people from their money - and a facility to prevent access to deposit accounts by Graeme Beal and Nationwide - and many other banks. WHen Nationwide refused acces to my own cash - I withdrew ALL my money held on deposit because I cannot trust Nationwide. There is no proper complaints procedure - and the FOS and FSA refuse to investigate. So I moved to Metro Bank - where service is above self and those who operate in this bank ARE helpful, ARE willing to assist - and recognise that we the consumer only lend our money to them - which is repayable on demand, When I demanded the return of my £ 500 from Nationwide - they refused ( at Director level ) and the directors protect the incompetent and hostile employees. Nationwide is where the directors - the incompetent run the incontinent !

report this

Vague Shot

Jul 04, 2012 at 08:47

Interesting what you say about Metro. I have not used them and if I get a serious problem with Nationwide, I'll move there. But at the moment because of the way I work with Zopa, I have no problems. Interestingly, members of Zopa, get invited to their parties, where you can talk about anything to their staff. I don't see other banks doing that for people who invest a sum less than £1,000,000 with them.

report this

S G

Jul 04, 2012 at 09:02

The problem is the Banks get fined, just like any other company, and the fine gets passed on to customers. They should fine the Directors and owners, ie take it out of shareholders dividens. That way, the shareholders will ensure the companies are doing the right thing, and the guys at the top will have tighter reigns on the company!!

report this

kathleen wood

Jul 04, 2012 at 10:39

I am concerned with anything relating to PFI. For example, as a number of NHS Trusts go bankrupt (inevitable) the pre-existing, very favourable contracts may have to be renegotiated which could end badly for the investor.

On another note ...if Bob Diamond gets a huge severance package I may just spontaneously combust!!! He should not have been given the opportunity to resign ... sacked and arrested for fraud at least plus all assets frozen pending investigation, prosecution. When do we start giving successful bank robbers bonuses???

report this

Matthew Charles Flinders

Jul 04, 2012 at 11:01

The narrow sightedness of people is astonishing. I dont think the majority of people realise all major banks have been involved in this libor interest rate manipulating. Switching your current account is not a solution lol.

report this

Ian Lees

Jul 04, 2012 at 15:10

Switching your bank account to Metro or any of the banks who are not involved int this fraud - means you can have peace of mind - as well as TRUST in your bank - rather than being ripped of by these high street money lending sharks - who appear to be protected by the FSA, FOS and the Bristish banking Association. Lack of corporate governance - and the banks willingness - to make victims of their services and processes - is outrageous.

report this

Mark Lance

Jul 04, 2012 at 15:23

Get this , lloyds have just been given 16 weeks to deal with a ppi complaints as 8 weeks isn't enough for them. Good old governing bodies helping out the banks yet again.

Just to add to the problem the poor old financial ombudsmen service are saying not to send lloyds cases to them and wait to gets lloyds final response, as they are so far behind too!!

Good to see banks can still do what they like.

report this

Ian Lees

Jul 05, 2012 at 06:42

I also have made use of Zoppa as a professional facility with very good personell, friendly helpful and most of all considerate to theri investors and borrowers. I would recomend others to check out Zoppa - not as add -on, until banks are repaired - but as an individual facility in their own right. Consumers and customers do not need to treate dwith the arrogance and hostile bankers and their tellers - or as I call it the directors, who are incompetent leading the incontinent .

report this

Vague Shot

Jul 05, 2012 at 08:09

Admittedly, I live in Central London, but I've been invited to some of Zopa's yearly parties and met a lot of their staff and other customers. They are very much a fresh face in the financial services area.

report this

ruth karp

Jul 08, 2012 at 10:27

I have changed my main bank to the Halifax, from Nat West.

simply for the interest on current account. \Nat West held my

cash without any interest... why? reward your old customers

report this

Ian Lees

Jul 08, 2012 at 12:49

If it is only interest you seek - why go to Halifax ? Various accounts and after a year - once you've swalloed the hook - they reduce interest rates, and make significant amounts of money out of their customers - in the most sinister and cynical manner. Having unhelpful employees does not assist consumers. Why not look at ING ? We recomend accounts and products which meet the client criteria - but most important is the service on offer. We dumped the Nationwide as a result of the hostile employees - unhelpful employees - and directors who do not care !

report this

xmfclick

Jul 08, 2012 at 16:58

The banks are like the phone companies -- much of a muchness. Today Barclays is the bad boy, tomorrow it'll be one of the others. Switching from one to another is called "churn", and in the long run it evens itself out. I don't think there's really any point in switching unless you have a special beef with your current bank that you can't get sorted out.

report this

S G

Jul 09, 2012 at 08:58

Also be very wary of changing if you will be looking for credit in the near future.

Many banks will offer you more if you have banked with them for a period of years as they have a detailed record of your account. Also many other companies other then banks ask the question of how long you have been with a bank. This then goes against there own rating system to decide if they should issue credit or not, so the longer you have been with a bank the better.

report this

Stephen Griffiths

Jul 09, 2012 at 12:50

I'm astonished at the stupidity and lack of awareness of some of the people commenting on this. They are very definitely not 'all the same'. The big four...yes. But there are a range of different options out there that are not gambling with our money in socially useless investment banking divisions which are clearly just vehicles for the personal enrichment of their utterly corrupt employees.

As someone else pointed out, all most of us need from a bank is that they look after our money, and arrange a credit or debit card for us and maybe the occasional overdraft. I DONT NEED TO BE WITH A BANK THAT HAS AN INTERNATIONAL INVESTMENT DIVISION. It doesn't benefit me as a customer one little bit. They don't even benefit shareholders anymore. Moneyweek points out that if you’d invested £10,000 equally across ‘the big four’ (RBS, Lloyds, HSBC and Barclays) ten years ago, you’d be left with just £2,889 today (excluding dividends). And that's after their massive bailout of taxpayers money. They're an embarrassment and a drain on the British economy. Thatcher would never have tolerated an industry requiring that level of subsidy.

Quite frankly screw them. If the government is going to drag it's heels about separating high street banking (they are only 'ring-fencing and not till 2019 - pathetic!!!) from investment banking then I'm voting with my feet. I'm switching from HSBC to Cooperative this week. For a start they have 24 hour a day UK based call centres which already makes them better than HSBC.

For anyone that thinks their are no viable options out there I'd urge them to check this website out.

http://www.moveyourmoney.org.uk/

report this

Vague Shot

Jul 09, 2012 at 13:13

Well said, Stephen. Nearly forty years ago, I did some revolutionary accounting that compared the costs of branches in a major clearing bank. Costs depended very much on property costs and how good the staff were. If the manager was giving loans for favours to female customers, that made the branch very expensive. It was all great fun and the lessons I learned are still good today.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

Sponsored By:

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Latest from The Lolly

Sorry, this link is not
quite ready yet