How to avoid getting short changed by your bank

Banks make a fortune by flogging expensive and second-rate savings accounts, investments and insurance to unwary savers so learn what to watch out for and avoid.

Savers need to learn fast that banks have changed if they want to avoid being short changed. The days of the bank manager being a trusted figure urging prudence and rationing access to mortgages are long gone.

Now bank managers and staff are part of a sales machine which wants you to sign up for expensive and complicated savings and investment products. The problem with this new sales culture was highlighted by consumer champions Which? in its commission on banking.

‘One of the big issues identified by a number of consumers was that in some of the banks the staff seem obsessed with selling particular products whether they were needed or not,’ said Dominic Lindley, policy adviser at Which?

Lindley said this push to sell often useless products was coupled with bank staff being deskilled, which meant many consumers received a poor deal. Low pay, high bonuses and tough sales targets only compounded this problem, he added.

Not all banks are the same and smaller operations like First Direct, the Co-operative Bank and Smile have a consistently good reputation among customers, said Lindley.

The old attitude that the bank would look out for your interest needed to be replaced with a more questioning attitude, said Nick Bamford, an independent financial adviser.

‘You need to think there will be sales pitch it may be labeled as advice or financial planning but that person in front of you has got some aggressive sales targets,’ said Bamford, chief executive of Informed Choice. ‘You should always shop around and give yourself some breathing space to get a second or even third opinion. Don’t be sold.’ 

Read our guide about the bank’s top seller and don’t get suckered with a second-rate product.