BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

We are going to see big changes in the way main street banking is financed as the casino banks are split off and firewalls erected. We've seen the first shots in the campaign with enormous bank charges for 'unauthorised' overdrafts and of course there is the upsurge in 'pay day loans' and similar money lending activities. Post any warnings and examples so we can all be aware of what's happening. HMRC seem to be getting in on the act, Paul Lewis had some scathing comments about the latest penalties for late returns and it seems that the target is the small business and tax payer. They don't have a battalion of overpaid lawyers and tax consultants backing them up.

[Tizer]

To view the previous `Beware the Bankers' thread in the OGFB Archive, click here.

Direct Line and Churchill fined £2.17m for forging signatures on complaint files handed to FSA 18th Jan 2012
Insurance firms Churchill and Direct Line have been fined £2.17million by the Financial Service Authority for tampering with customer complaint files that were submitted to the regulator for assessment. More than half the files requested by the regulator had been altered, including seven cases where internal documents were found to contain staff signatures forged by one member of staff. The deception occurred when the insurers - both controlled by taxpayer-owner Royal Bank of Scotland - were asked in 2009 to submit 50 customer complaint files to the Financial Services Authority (FSA) as part of the regulator's work to improve complaints handling. From This is Money web site.

[Stanley]

Not very reassuring is it. It raises the question "Who are the shysters?" Reports yesterday on You and Yours about pay day loan companies giving loans on false personal information and then chasing the person impersonated for repayment of the money which of course they had never borrowed. Frightening because it's a very simple fraud needing only a name and a current address so we are all vulnerable. The problem seems to be that in the search for speed, the companies aren't doing any checks, like a simple call back to the address for verification.

[Tizer]

Yes, and this is happening in other business areas too, including banks and insurance companies, with the companies not bothering to check obviously dodgy transactions and claims. They are shirking their responsibilities, but the Great British Public is gullible and lets them get away with it. GB is getting a little more like Italy and Greece each day!

[Stanley]

Perhaps we need a national register where we can bar ourselves from certain transactions like pay day loans. If we have put ourselves on the banned list but they allow a transaction it proves they haven't checked. That shouldn't be too difficult.

[Stanley]

Twenty four hours after Mervyn King came out publicly against the bank's bonus culture it is reported that Stephen Hester the RBS boss is to get a bonus of almost £1million on top of his £1.8million salary. See this link http://www.bbc.co.uk/news/uk-politics-16752358. Nice work if you can get it. All the usual arguments trotted out about retention of top staff but isn't it about time we called their bluff?

[Stanley]

I see that Stephen Hester has 'voluntarily' declined the £963,000 bonus. Call me an old cynic but he was a political embarrassment and I think there's little doubt that someone has had a quiet word. It is in the nature of these things that a quid pro quo is offered. Play ball and get a 'K'? As I say, I am a realist and get a whiff of 'wheels within wheels'.

[Tardis]

Interesting to hear on Today that they are now allowing those people on who are saying that privatising the banks was never a good idea because of the business model required to make back the money so that the Treasury shows a profit.

Even now, some are pushing for the break up into good and bad bank, so that it can be hived off.

Brown and Darling failed to "see" the longevity of the project necessary, and encapsulated a contract that was always likely to create political problems whoever was in government.

Closing RBS will only consolidate the enormous loss that Brown committed the country to.

[Tardis]

News from the markets suggests that the political pressure on Heston has resulted in a further loss to the taxpayer on the RBS shares of about £150 million today, as they believe further interference may stifle the actual workings of the bank.

[Stanley]

Estimates of further RBS bonuses in the pipeline is £34million. Last year it was ten times that. I suppose we should be grateful for small mercies and regard it as a healthy trend.

[Stanley]

I suffered hearing an interview on bank bonuses from Angela King, the spokesperson for the banks. She lives in a parallel universe and is totally predictable, never answers the question but spouts one of her platitudinous prepared statements about what a great job the banks do and why we should stop attacking them. She actually said this morning that the bankers had only a small part in the collapse. It's useful listening to her actually because she gives us an insight into her world where they actually believe what she says, the banks do a wonderful job and it is high time we (the proles) stopped criticising them.

[Tardis]

I switched off the interview because it contained the pontificating Polly.

Maybe we should go with your suggestion Stanley and shut all the banks. It would be the easiest way to show who was actually correct.

[Tizer]

At least RBS chairman Sir Philip Hampton has admitted that bankers are being paid too much. He'd better check under his car in case his former mates want to remove him from the argument! Business writers in The Times have several times commented that bankers' so-called `compensation packages' are so large simply because the bank executives like to boast about the figure. It's not people like us who say so, it's bankers themselves who tell the Times journalists that this is the case. Apparently Bob Diamond of Barclays berates journalists who under-estimate his `package'. It's a childish "mine's bigger than yours" mentality*. There's also this attitude that we can't do without the present bunch of bankers and they'll take their bat home if we don't be nice to them. Yet banking isn't that difficult a business to run (and it's effectively underwritten by us, the public, if anything goes wrong) and there will be competent people out there who could replace the current gang if only they were allowed to get past the old boy's network. Some day in the future we'll look back and think `how did we ever let them get away with such a scam?'
*I've just read Giles Coren in The Times and he uses the term `bankers' bragging rights'.

[Stanley]

Whatever the roots of it, the present culture is rotten. I think the biggest cause is the appointment and influence of the 'compensation panels'. Regardless of what they say about 'independence' it is quite obviously a rigged system.

[Tizer]

The major shareholders, the pension funds, are managed by people who make the same big salaries and bonuses as do the bankers, so they aren't going to upset the apple cart.

[Tardis]

Yes, and those pension fund people need to make a return of about 7% per annum to ensure pension funds stay in the black and provide revenue to their clients.

That number is compounded.

[Tizer]

On the Energy thread I referred to the `direct debit trick' and said I would explain here. We all know how much effort the utility companies and others have put into pressurising us to pay by direct debit. I always try to avoid it because it's prone to errors which can drag out for ages and be difficult to correct and also the companies can use it to create difficulties when you want to switch to another supplier. But now it's worse. Companies are `bringing forward' direct debit payments so that you end up paying for a whole year in about 6 to 9 months. Remember Npower and its 9-month year? Well here we are again, with companies ignoring the calendar and taking our money in advance. You agree to a direct debit of so much a month for a year but 6 or 9 months later you find they've taken the whole lot, 12 month's payments gone already. Just think how that can affect someone on a tight budget. The companies have no shame. At least the newspaper journalists have started reporting on the scam but the regulators need to get off their backsides and do something about it. Keep an eye on your driect debit payments and if they start going out early make sure you complain.

[Whyperion]

Payday loan companies should only deposit funds into the bank account into which the repayment/s are due to come out of. That is the main check they make along with a Utility Bill and normally one other form of verifiable ID , ( or was until online submissions ). Branches making cash advances use address verification functions on the debit card presented along with a Photo / Utility ID. So it is fairly difficult unless sharing an abode and name with another person to gain Cash Advances and nearly impossible (other than possible for online applications ) to get funds into an account which is not yours that you can then draw on.

[Stanley]

Whippy, so why the steep rise in complaints about bogus loans?
Tiz, interesting comments about direct debit. I have always regarded these as a non interest bearing savings account (rather like my current account at the bank) and never worry about the payments as long as they level out once a year. However, I am lucky and have a small cushion in my bank account and can see how it would be entirely different for someone on the margins. There is also the reduction in price if you are on direct debit. My gas payment will be fairly high at the moment but at the next 3 month accounting there will be a significant reduction due to the influence of my stove. My electricity payment rose £10 a month when the increased consumption due to Shed activities came through in January, it will fall in April because I'm not in there burning juice. As I say, I'm lucky in that I can stand the variation and am not losing any interest.
I suspect you're right about my pension, I remember once getting my old Compound Interest tables out and working out that I would be up to the non-incremental rate of pension if I survived until I was 72. It seemed like a reasonable bet and of course I am now well above what it would have been if I hadn't taken the gamble! Wonder what it will be in thirty years.....? (Can't be arsed to find out)
I note the furore about anti-business sentiment and the small 'victories' in reducing bonuses but also note the lack of any information about the progress of the wider changes to bank regulation. Are we having the wool pulled over our eyes?

[Tardis]

I'm with Stanley, on a fixed income direct debit is the way to go because the even cash flow ensures that there aren't major movements in the amount to be paid.

[Nolic]

This seems like a suitable topic in which to post this.


I got a call yesterday from a very nice lady called Pauline from HM Revenue and Customs.

She called to ensure that as a reasonably new self employed person I knew hope to complete my on line tax statement and all the allowances I could claim - looks like Mrs Taxman may well be parting with money to me rather than me to her.

I thought this was a very good and helpful move and felt reassured that the simple invoice/payments in/payments out system that I'm using was more than adequate for their purposes.

I don't suppose we get many opportunities to praise the tax people.Nolic

[Tardis]

Hear the amount of support on Today this morning for the RBs chief, and the comparison with Capello?

I think even beeboid Humphries was surprised

[Whyperion]

With the exception of http://www.bbc.co.uk/news/business-11612214 Which relates to One newly UK established Payday loan entity (looks like it has been targeted in a way that the simple checks above would have avoided and that it seems to be a professional con on the company ) I can find no internet evidence today of any claim of any UK registered provider Payday loan being granted without the requesters permission. One other requirement of a payday loan is that it falls due for repayment on the borrowers normal payday and that the borrower must be in employment with a regular date of salary payment by cheque or bank transfer. This may not apply to other short term borrowing which has become commonplace. Most of the intital charges on these kind of loans (borrow £800/Payback £1000 ) go to the running costs of the provider, The providers (taxable if company based in UK - so the governments in on this too ) profit comes out of the renewal fee ( charge £100 renewal fee on payday , carrying over the £1000 due to next payday or ad infinitum , its this that gives the huge APR equivalents ). The payday loan companies have somewhat grown out of the USA systems of short term loans , where people there often find themselves short of cash for things like medical fees , which we dont have in the UK. Realistically there should not be a need to use such companies in the UK. Try looking though at the credit agreements on things like Car Insurance , which has just about doubled in cost over the last 4 years, and paying off the APR is approaching 30% APR plus documentation fees of £15+ etc dependent on broken. Financial Institutions finding that people are prepared to accept high APRs are really trying to effectively charge double where they can and there is a severe lack of meaningful competition.

[Stanley]

Comrade, nice! We tend to forget the amount of administrative activity that works perfectly well. I can remember when I was a newcomer to VAT the amount of help I was given and never any problems. When I retired they even showed me how to avoid any penalties on exit, some of them looked dodgy to me but the advisor assured me they were all legal and above board. I finished up getting a repayment!
Bruff knows that I have, on the whole, a very high regard for the majority of public servants. We do them a dis-service by tarring them with the same brush as the rogues.

[Tizer]

From BBC News, 20th Feb 2012
Lloyds Banking Group has confirmed it is cutting £2m from bonuses paid to 13 executives, including the former chief executive Eric Daniels.

"Mr Daniels will lose £580,000 after his original £1.45m bonus was cut by 40%. Bonuses for another four directors will be cut by £190,000 to £260,000, while a further eight executives will receive about £100,000 less. They are being penalised for the bank's mis-selling of payment protection insurance (PPI). In theory, PPI covered repayments if borrowers were unable to keep them up, promising help during illness or unemployment, but in many cases, those taking out the policies would not have been eligible to claim on them. Lloyds has been forced to set aside £3.2bn to cover compensation for those customers who were mis-sold PPI....The return of some of the bonuses, which were demanded by regulators after the banking crisis of 2008, are being made after pressure from politicians and the Financial Services Authority.
Read more on the BBC page here: LINK