BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

Moving money has always been a bit of a mystery to me. If you ask the bank to send money abroad they make a huge mystery out of it and charge you. If you buy something on a credit card in Oz or the US and something goes wrong with the product you bought and you are given a refund the retailer puts your card number and a code for the transaction into his terminal and the money is transferred free immediately into your account. Funny things banks.....

[Stanley]

See THIS Guardian report on the laughably small Corporation Tax paid by Facebook on £28million UK profits. They say quite rightly that they have observed all the tax rules. Quite! This is why tax rules for these situations need to be overhauled.

[Tizer]

When I started our business back in the 1990s I asked the London office of a big US bank to let me have two accounts one in sterling and the other in USD and to allow transfers without charge, which should be possible for them with a foot in both camps so to speak. They said they would still charge me, even though I argued it was all electronic and they moved their own funds between dollars and pounds.

[Stanley]

And as my father used to say, they had you by the short and curlies so there was nothing you could do about it.

[Tizer]

Never, ever, sign up to private banking - then they really have you by the short and curlies! When my father-in-law was a research manager in a food company he was a busy man and had to divide his time between company sites in London and Wales. He was involved in the activities of several professional societies and was also active in industrial archaeology. He wasn't rich but to maximise his time available for all this he chose to go for private banking with Lloyds Bank to sort out his finances, make wills etc. Now that Mrs Tiz has power of attorney for him we're seeing all that goes on in private banking and having to suffer more of the incompetences of banks. Yes, even when you pay a fee for banking they still mess you about.

They bring in other businesses such as other banks, insurance companies, solicitors and I've no doubt that substantial commissions are passing back and forth. It wouldn't be so bad if they could get it right. Lloyds Bank set up some kind of insurance so that when Dad died money could be immediately released to pay for the funeral and all associated costs. The policy has to have four family members named on it who would have to be consulted if changes needed to be made to it. Dad is one of those named. It has gradually dawned on them that the policy should be altered because Dad `no longer has competence' due to his dementia. Sorting this out has been complicated and, no doubt, expensive. It was decided that I should replace Dad and new documents were made up and sent back and forth to all concerned for signatures. At the same time, one of the family members named went through a divorce and now has a different surname, so we had to send them a copy of the new marriage certificate. It's all taken a long time and now we've received the final document. Guess what! It still has Dad's name on it and it still has the old surname of that family member (and it's spelt wrongly). You couldn't make it up if you tried! As I said at the start, never take out private banking.

[plaques]

Santander have given notice that they intend to raise the charge on their 123 credit card from £24 to £36 a year. They point to the advantages of their cash back system that gives 1% on this 2% on that and 3% on t'other. If you use their website calculator you can at times just about break even. The majority of small card users will lose big style.

[Stanley]

The reason I chucked in my Barclaycard Visa card was because they had a minimum charge for interest on the balance of £1. So, if like me you always keep the card almost paid up you were still charged £1 even if there was only a couple of quid outstanding. Not a bad interest rate! HSBC charge on the actual balance and below a certain amount omit the charge.

[chinatyke]

The reason I chucked in my Barclaycard Visa card was because they had a minimum charge for interest on the balance of £1. So, if like me you always keep the card almost paid up you were still charged £1 even if there was only a couple of quid outstanding.

I don't understand why you would keep a card "almost paid up". If you pay it up every month then all future transactions are free of interest until the next statement payment due date. If you have even the smallest debit balance then every transaction attracts immediate interest, at eye watering rates.

Used sensibly cards can give you 7 or 8 weeks interest free spending.

I used to keep my cards slightly in credit but the card companies then stopped allowing this. Of course they want you to be in debt to them, but even customers like me provide income because the card companies also charge the retailer.

[Stanley]

Under HSBC's rules I don't pay interest at all as the small amount left on the card counts as recent spending and is not liable for interest until it has been on the card for a month so I'm not as daft as I look.....

[chinatyke]

Under HSBC's rules I don't pay interest at all as the small amount left on the card counts as recent spending and is not liable for interest until it has been on the card for a month so I'm not as daft as I look.....

Even so I question why you wouldn't completely clear the balance, seems just as easy as leaving a small amount. I thought you was brought up like me: to clear accounts on time every time.

Actually I had a chemistry teacher at college who always waited until he got his electric bill final demand before he settled the account. He could get a few weeks extra credit from the leccy board by doing this. He told us one time he forgot to pay the final demand and a worker turned up at his door to cut off the electric supply. The teacher told him he would give him a cheque to settle the bill and the worker said that he could do that, but he would still have to cut off the supply because that was procedure and then he would reconnect him immediately. This was agreed and a cheque was handed over for the outstanding amount and the supply was disconnected. Then the worker demanded a further 20 quid to reconnect the supply which he had to pay. All his penny savings of the last few years were wiped out. Penny wise, pound foolish.

[Stanley]

Computers don't like zero accounts.... They are happier if a bit is left owing on the account as this doesn't trigger any actions automatically.

[PanBiker]

Computers don't like zero accounts....

Bit of a random statement that Stanley. Positive, minus or zero will make no difference to how the computer operates and even if a zero balance did trigger "automatic actions" surely you would be in the best possible position for arguing your corner. Always worked for me.

[Tripps]

I've cleared my credit card account down to zero every month for decades - never noticed that it triggered any actions. I think we have psychology at play here, reminds me of Hercule Poirot.

Poirot is extremely punctual and carries a turnip pocket watch almost to the end of his career. He is also pernickety about his personal finances, preferring to keep a bank balance of 444 pounds, 4 shillings, and 4 pence.

[Pluggy]

Many,many moons ago I closed a credit card account, but I overlooked cancelling a yearly payment. Several months later the card company paid it and then sent me a statement with the outstanding amount. Catching on that they didn't really ever close the account and sent statements on a non zero balance at the month end, I overpaid what I owed by 5p. Sure enough I then got a statement each month saying I was 5p in credit. I let it run for about 10 years, figuring it was costing them money to mail me a statement each month. I reckoned after 10 years and 120 statements I'd punished them enough I rang up and told them to donate the 5p to a charity of their choice. I haven't had a statement since. So zero accounts are good in some cases. The card attached to the account expired during the 10 year period but it wasn't renewed. I haven't used a credit card since.

Spending money I don't have has lost all appeal.

[Tizer]

Back in the 1970s I opened an extra bank account for convenience while I was working away from home - this was before the days of ATMs and online accounts and you had to actually walk into a bank to get any money. When I stopped working away I drew out any remaining money. About six years later the Inland Revenue sent me a threatening letter claiming I was hiding a bank account from them. It seems that I'd not drawn out every penny and therefore the account had been kept open. But it was enough to make the revenue investigate me to see if I was up to anything else they could pin on me (which there wasn't!).

[Stanley]

Thank you for all the opinions and advice but as I have not paid any interest on the card for as long as I remember and have had no problems with it (Touch wood!!!) I shall continue with my unpopular strategy.

[Tizer]

I notice that Barclays have recently put a new boss in charge...and he's from the investment (casino) side of the bank. Back to the days of Bob Diamond perhaps?

The economics editor of The Times, Philip Aldrick, wrote in the Saturday issue about the regulations to make banks more rigorous when determining the source and legality of funds deposited by new customers. He related how one of his friends was called in as an intermediary after British people were held to ransom by Somali pirates in 2005. To pay the ransom, solicitors and banks were appointed to represent both sides and deal with the exchange of cash. Aldrick says that the big City banks never blinked once even though they were passing money to a criminal operation, money which then funded the criminals' future activities. So he wasn't surprised when banks like HSBC were fined by US authorities for involvement in illegal money transfers.

[Stanley]

Many commentators see the new appointment as just that Tiz. A sign that the banks are beginning to flex their muscles again as they detect a tapering off of appetite in government for tough regulation and real economic reform. Other bellwethers like the lack of prosecutions of miscreants, the failure to grasp the nettles of the anonymous LLPs and the almost complete capitulation to the off shore tax evasion plus the Treasury's seeming disregard for rising levels of debt confirm this view. I have no doubt that we are heading for another eventual melt-down in the system. All the factors that led to this in 2008 are in place.... (plus increasing unpredictability in the global market....)

As for banks doing dodgy deals if they think they can get away with it.... No surprises there!

[Tizer]

The big banks are rubbished on most of the front pages this morning for treating their customers badly. The Government can't understand why customers don't `switch'. But it's just like the energy companies too - who do you switch to when they're all as bad as each other. There are the new small challenger banks but they don't get enough promotion and most people have never heard of them. Many people depend, rightly or wrongly, on overdrafts and fear that by moving to a different bank they might lose the facility. The big banks aren't worried about losing retail customers, they can simply fall back on casino banking (and prefer to do that anyway).

[Stanley]

I agree with you Tiz. Better the devil you know..... and if something is working OK don't fix it. All right, I know that no interest on balances is a rip off but so is everything else these days so I leave well alone. The report you allude to was supposed to make recommendations like splitting the commercial and retail arms etc but not a word about that or any other reforms. The advice to change banks and the mild rap on the knuckles for the big banks is a sticking plaster and a sign that what we suspected, supine acceptance of the Lords of the Universe, is the new policy. So everything as it was before. Forget 'too big to fail', ride the tiger and hope the next melt down doesn't happen while you are in power.... Who do you think is running the country?

[Tizer]

That's a concise summary of the state of the nation. We need an aeroplane to write it across the sky in London!

[Stanley]

Thanks Tiz. The terrible thing is that I believe every word is true. How the hell did we ever allow this state of affairs to come about?

[Tizer]

A brief note from the beeb's web site:
`Money Shop owner to pay £15 million in customer refunds' (BBC, 26/10/2015)
"One of the UK's major payday lenders has agreed with the Financial Conduct Authority (FCA) to refund £15.4m to 147,000 customers. The firm, Dollar Financial UK, owns brands including The Money Shop, Payday UK, Payday Express and Ladder Loans. The FCA says customers may have suffered as a result of the firm's affordability checks, debt collection practices and system errors. The FCA began a review in July 2014 into Dollar's lending decisions."

[Stanley]

I still don't understand the ethical basis of allowing these loan companies to charge interest rates of getting on for 2000% RPA. The cure is of course to force the 'risk averse' major banks to enter the field but with less usurious rates of interest. If necessary with the government guaranteeing part of any shortfall, but I doubt if there would be any. Such a policy would be cheaper than the public having to pick up the pieces after melt-down which is what happens now. Just look at the cost of 'short term' B&B accommodation.... As I have said so many times before, proper cost/benefit analysis and long term strategies would be cheaper than the present laisser faire attitude. PE had an interesting number, This year's expected NHS deficit £2billion. This year's PFI payments £1.9billion. Add to this the cost of outsourcing staff and bed shortages to the private sector because of bad government targets to address problems. .... I rest my case!

[Tizer]

A few weeks back I mentioned Mrs Tiz's problems with Lloyds Bank and Prudential where they were getting everything wrong. Someone from Prudential rang yesterday and made profuse apologies for a string of errors `that should never have happened'. For example they shouldn't have made her send the Power of Attorney document when they had already seen and copied it - and when they knew she must have had PoA to be able to carry out the discussions with Prudential and Lloyds in the first place. And that they shouldn't have made her send her sister's marriage certificate again when they'd had it before. They are sending £75 to make up for their errors. This is the 21st Century business model - don't bother getting it right first time when you might get away with errors, you can always give compensation later if the customer notices the problem.