BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

Reports that the Co-op Bank are conducting a full review of their banking practices. One would think that dodgy debts would be part of this. The question that arises in my mind is whether the same exercise is going on inside the other banks. On thing is certain, if it is they will be keeping stum because of possible repercussions on their share prices. The overall impression from the news leaking out is that the UK banks may not be as robust as they would like us to think. There appears to be a movement in favour of doing this re-examination....

[Stanley]

Confirmation that the Co-op bank's problems are indeed due to dodgy loans, many of them taken over with the purchase of the Britannia Building Society. The new CEO has a track record in dealing with toxic loans. Hopefully he can guide them out of this minefield. Much comment about the bank and one popular theory is that the bailing out of the major banks in 2008 put a lot of pressure on the Mutuals like the Co-op bank because they got no subsidy and were subjected to unfair competition from the failed banks whom we were supporting. Could be one of the unintended consequences of the bail out.

[Stanley]

It has been noted that Hartnett, the suspect head of HMRC has gone through the revolving door to noted tax avoidance accountants DeLoitte. They say he won't be directly involved in tax schemes. So that's all right then?

[Tardis]

News that 190,000 'bankers' from the top 4 UK banks no longer have jobs since their peak staff levels.

This probably more adequately demonstrates the loss of liquidity within the housing and industrial sectors, not to mention the loss of tax to the treasury

[Stanley]

News this morning of changes to the planning regulations which could allow more betting shops and instant loan outlets. Am I alone in being deeply cynical about the enormous increase in gambling and what are in effect loan-shark activities? The TV is flooded during the day with advertisements for on-line gambling particularly Bingo. Isn't this simply exploitation of poor people looking for a windfall or an 'easy' route to money which of course is illusory?
Then of course the analogy comes to mind of gambling on the stock exchange, the currency markets and what is quaintly described as 'investment banking'. It makes the bank's back door wheezes to increase their share of the customer's wallet look almost reasonable.

[Tardis]

When the normal banking markets are closed to people through the zombie banks and the extra regulation, the cash will flow into other areas. Gambling is actually quite well regulated, but there is very little on the books about the payday loan people because normal banking was supposed to squeeze them out.

[Stanley]

Wisps of rumour this morning that Barclay's may be linked with the recent closure of the digital money laundering scam taken down last week in Costa Rica by the US regulators. This was a $6 billion operation and observers will be amazed if big money sources weren't involved.
There are some significant straws blowing in the economic wind this morning. Basically it goes like this. Because the main goal of the Treasury has to be growth as this is the only way the deficit and borrowing can be brought down it is thought that the first action of the incoming head of the BofE will be in effect to downgrade control of inflation as a prime target. In order to make this supportable the bank will give guarantees about keeping interest rates down and the measures they will have to take to ensure this will have an effect on the value of the pound. The smart money in the firms that make money by playing the money market is on a 15% drop in the value of the pound over the next few years. Theoretically this has a beneficial effect on growth because people with money tend to convert their falling assets into goods or other investments and this further increases the tendency to growth. It also aids exports but at the same time makes imports more expensive. The thinking is that the Treasury has accepted the fact that present policies of maintaining the pound by austerity measures to reassure the markets aren't working and so changes have to be made.
Not good news really but at least it's a different approach and if it's any consolation I remember when Harold Wilson made his famous speech about the pound in your pocket and whilst we were pinched a bit we survived as inflation rose to levels you wouldn't believe these days. If I remember right it ran at over 20% at one point! So, put off thoughts of suicide or migration and hunker down for the ride! As I have said so often, this train wreck isn't anywhere near over so tin hats on lads! By the way, the deflation will be more against the Dollar than the Euro because the expectation is that the Euro also will fall in value.

[Tardis]

Demonstrations of the 'credit crunch' and the debt fuelled binge in the latest numbers;

Household debt has fallen from 111pc of GDP at the start of 2009 to 99pc at the end of last year

For private firms excluding banks, debt has dropped from 121pc of GDP to 108pc

Together, families and non-financial firms’ debt is still worth 208pc of GDP and is merely back to levels last seen in mid-2007, a time when leverage was already utterly unsustainable. Current debt levels remain much higher than they were a decade ago (170pc of GDP) and 15 years ago (128pc of GDP).

[Tripps]

Did you see the cartoon in last week's Private Eye?

The devil was complaining that his demons had been bankerised.

[Stanley]

Report of a sharp increase in the number of people having their details stolen at cash machines.....

[Tizer]

You can tell how bad security has got in the banks, HSBC has appointed the former director-general of MI5, Sir Jonathan Evans, as independent non-executive Director and a member of the Financial System Vulnerabilities Committee in an attempt to sort our their money laundering and terrorism money problems. They've already appointed a couple of other security people and also the former head of HMRC (the latter possibly to help them get favourable tax treatment?).

[Tripps]

"Report of a sharp increase in the number of people having their details stolen at cash machines....."

Am I being too cynical to note that this report comes a day after the revelation that the new contactless cards are less secure, than the banks might wish us to believe. Is this them saying that the older cards have their problems too?

[Stanley]

Credit and debit cards have always been vulnerable. The only conclusions I have come to are that you should never allow them to leave your sight and only deal with the larger firms when on-line shopping. As I say so often, it's a mine field out there!

[Tizer]

Another rule...when paying online, if the something goes wrong when you click the final Pay button and you get a warning like "Transaction void" don't go and try to pay again. Wait a few hours or preferably until the following day and see if you get an email confirming your payment has gone through, which is often the case. If you don't get any response by the following day then try again. A couple of days ago a friend tried to book a holiday online and got a `failed' warning; she tried again and got the same problem; then tried again and again...and again. Then she found she'd paid for 5 holidays and now she's trying to cancel 4 of them! It happened to me in the early days of online shopping and I found I'd paid three times over for an item. Luckily the company was sensible about it and agreed to cancel two of them. Never again!

[Stanley]

One instant way to get an idea of what is happening is to log into recent orders and see if the transaction is recorded, you'll usually find it's there. If it isn't, wait a day or so and look again, if it isn't recoded then you can be fairly sure it was a failed payment. No system is perfect, however, if you use a large firm like Amazon you have a better chance of getting a response to a complaint.

I used old-fashioned banking yesterday. Sent a cheque by post to my nearest HSBC branch in Burnley to have it paid into my account.

[Stanley]

More and possibly even bigger trouble for Lloyd's Bank over mis-selling of PPI. They have discovered that the contractor they set on to deal with the claims for repayment Vis Deloitte's has been coaching the call room staff to use spurious reasons for rejecting claims on the grounds that few bothered to reapply. Even the rectification process is going wrong. Isn't out-sourcing grand! Deloittes say they have terminated the contract but it throws doubt on the way other banks are dealing with the matter. The principle seems to be that the client is spurious unless they can provide incontrovertible proof that their claim is genuine.

[Tizer]

This sort of thing is rife in the banking industry now, and even in the financial industry in general. It goes from bad to worse to terrible. The senior managers are either incompetent or are operating a cynical business plan; either way, it's time we replaced them with something better.

[Tardis]

Does the Lloyds/Deloitte debacle demonstrate that the bank is bad, or that the contracted winner wanted to keep more of the spoils from the contract?

Either way it demonstrates that Lloyds' management weren't monitoring to contract and are now left with cancelling it and trying to bring it back in house without the necessary infrastructure to support the operation.

[Tizer]

I guess you've answered your own (rhetorical?) question - the bank wasn't doing it's job. It shouldn't be farming out customers' personal data to the likes of Deloitte and when it does sub-contract it needs to apply due diligence.

I hope you've all heard about expired direct debits being reinstated without the customers' permission or knowledge? The Money Box programme featured the story about a company in Burnley that took over data and started up expired direct debits. It says it was the computer's fault...well, of course, silly me for thinking it might be them devising cunning wheezes to make more money. Customer's weren't noticing because the debits were often on old accounts that they don't use very often and were for small (but regular and frequent) amounts. The banks that accepted the instructions failed to check even thought the details were out of date.

[Stanley]

The training booklet that instructed the call centre staff was written by the bank and not the contractor.
You're right Tiz. I have been watching my account like a hawk since I shifted all my communications accounts, so far so good. I only have one account so it's relatively simple.

[Tardis]

What alarms me about the sub contracting is that this operation was actually giving out 75% on all PPI miss selling claims, which Lloyds says is actually the highest of it's sub contracts.

You'd better ask Lloyds if the types of expressions being used by Deloittes operatives were actually in the specifications given by the bank. If they are then the same will come to light in all the other sub contracted areas. The fact that Lloyds closed it down with immediate effect would seem to suggest otherwise as they knew that neither company could defend the practice.

[Stanley]

Much debate this morning about Stephen Hester's resignation from RBS to take effect later this year. Opinions vary about the reasons but one persistent thread is that Number Ten has had a hand in it. It's being presented as Hester's preference but his statements are not helping to clarify the matter. It is important because any changes in the bank should be driven by economic and management considerations and n ot for political reasons. There's no doubt that the government want a sale agreed by the next election.

[Tardis]

RBS share price fell 5% on news of Hestor's departure and the revalation that the bank almost died

[Stanley]

Fingers are being pointed at the interference from the government body supervising the investments into the banks. The last two paragraphs of this LINK look like sensible comment to me. The old bogey of short term political advantage will doubtless trump what is best for the taxpayer.

[Stanley]

Is it my imagination or are we seeing a re-run of Blair and Iraq in the pressures to arm the rebels in Syria? Noticeable that Cameron has said that Parliament 'dhould heve its say' but of course this means nothing because like Blair he can override them by using the Royal Prerogative. Worrying stuff.