BEWARE! THE BANKS ARE OUT TO GET YOU!

[Tripps]

There's something wrong about this story. The ones that phone me always withhold their number, and hang up at the first sign of any retaliation.

[PanBiker]

I thought it rather strange as well. I still get the odd cold call but they drop me like a ton of bricks when I mention the TPS. 19 minutes must be a record argument with a call centre, I can usually get rid with my first sentence.

[Stanley]

My first question is always 'Who are you?' Then I tell them they are thieves and hang up.
Mind you some of the scams are so clever. Did you hear the one where the scammers exploit the fact that if they advise you to call the police or your bank to check on them they exploit the fact that if they don't hang up, the next number you dial goes directly to them? The moral is don't transact anything over the phone and if you do, wait at least twenty minutes after hanging up before you retry. I wonder if it happens in reverse? Or do you have to initiate the call in order to be able to do it.
Has anyone seen any signs of bank reform? Or are they just sitting tight and waiting for us to forget all about it?

[Tardis]

RBS is finally off the state, just as the EU decides that it needs more capitalisation to prevent it from going bust because it hasn't fully translated some of the risks on it's balance sheets.

Meanwhile there appears to be movement in the property market. Prices are dropping, so maybe the correction is finally coming

[Stanley]

Paul Lewis was on Today this morning giving his estimates of the figures the banks are going to have to pay out as a result of refunding for PPI. Leaving aside the fines, it is at £12.5billion and rising because not all the figures are in yet. The pensions mis-selling ended up at about £16billion and it looks as though PPI will exceed that. So it's going to be the biggest mis-selling scandal ever. Interesting thing is that this money will initially be taken off the shareholders and injected into the economy. Then there is the affect on the pension funds who will lose out. Dreadfully complicated and a complete cock-up. However, it may not be the worst ever when the possible consequences of the new compulsory pension arrangements and NEST work their way through the system. Many economists say that this is going to be another mis-selling disaster. Incompetence?

[Tizer]

The moral is don't transact anything over the phone and if you do, wait at least twenty minutes after hanging up before you retry. I wonder if it happens in reverse? Or do you have to initiate the call in order to be able to do it.

The incoming caller can hold the line by not terminating the call. You, on the receiving end, can't hold their line (unfortunately). If you do want to ring back to check then either wait 20 minutes or more (as you suggest) on the assumption they will have dropped your line by then, or dial using a different phone line or mobile. My father-in-law has taken to carrying around his cordless phone in his pocket and he has our phone number allocated to one of the keys. The key gets pressed accidentally in his pocket and the phone rings us. We answer but he can't hear us, yet we can hear him taking to mum-in-law and all the background noises. There's no way we can break the call - if we press the cancel key on our cordless handset or put down our old-fashioned handset on the cradle we are still locked into his phone the next time we try to dial out. So we then can't make any calls and can't receive any. We've had to get him to change his habits so we can have our phone back!

[Stanley]

The question that springs to mind is did you hear anything interesting!

[Tizer]

Only that mum-in-law is very demanding and that father-in-law is giving in to all the demands to try to gain a quiet life! She `sacked' two of the three carers a short time after they started visiting, not because they were bad but simply to prevent people coming to the house. This meant he suffered too - he has to make the meals and help her into bed, all difficult for someone with Parkinson's disease. Now she seems to have back-tracked and wants carers again!

Back to the banks - did you hear the ex-RBS man this morning saying that the banks were institutionally corrupt and that he warned the FSA before 2000 about the coming PPI catastrophe and scandal? And that the profits were so obscenely high that the fines placed on the banks didn't deter them? With so much dosh swilling around it makes me wonder whether there was corruption in the FSA too, with backhanders being given to encourage turning a blind eye.

[Tripps]

Why were so many people so stupid as to buy these products? Did no one question it, or read what they were signing up for? I was once asked to buy an extended guarantee at Argos for an ironing board costing less than a tenner. I did laugh out loud, but felt sorry for the person who was obviously told to ask the question. The phrase "peace of mind" should be a red warning flag when used by a salesman.

[Tizer]

The PPI was a bit more devious than that, Tripps. Many people agreed to buy the insurance on the advice of the bank sales people in case they lost their job and couldn't afford to pay their mortgage. But when it came to the crunch many of those people were refused a payout for various reasons. It turned out the banks had been selling PPI to people who were, by the bank's own small-print definition, not eligible to benefit from it. For example, it excluded self-employed people yet the banks happily signed them up to it. This is why it has turned out so bad for the banks now - it was an outright money-making scam and they hid the true facts from the customers.

[Stanley]

I heard the RBS man and also another person who drew attention to the fact that the salesmen didn't make the rules but their superiors. In effect they were instructed to break the covenant of honesty and trust which used to characterise the banks business ethics. It's not over yet of course, the interest rates swaps are still being investigated and yes, you're right, the profits are so high the fines are simply a business expense. Apart from thet, how will the banks claw back the fines? Simples! Milk the customers! What we really need is less fines and more senior bankers exiting the building in handcuffs! In many cases there are no specifioc charges that can be brought, remember LIBOR?

[Tizer]

Oh dear, HSBC is now in more trouble. The Daily Telegraph claims that the Inland Revenue has received the details of 4000 offshore account holders at HSBC and that they include "a well-known drug dealer living in Central America, bankers who face allegations of fraud and a man once dubbed London's `number two crook' ". The Americans believe that HSBC was too lax in vetting its account holder - they've already accused HSBC of laundering money for drug cartels and terrorists.

[Stanley]

Whistle-blowing is such a powerful tool and I'm all for making it easier. The people who rail against it and persecute the perpetrators are the ones who have something to hide. We've seen the dangers recently re Lord MacAlpine but this is a bad argument against the general practice. In this case (and the one in Spain also) all that was done was to publish a list of account holders. Anywhere else it's called transparency. The key thing for me is that I can't think of any reason for having a secret off-shore account that isn't damaging to the ordinary tax-payer. The same applies to the widespread use of anonymous trusts that are supposed to be controlled by trustees but are in effect vehicles for reducing tax liability. If someone takes advantage of the benefits of a society they should abide by the rules and this includes paying tax.

[Tizer]

An interesting article on PPI and compensation for mis-selling:
`PPI: How did the bill ever get so big?' LINK

It's mind-boggling. Here are some quotes: ".. the total bill that banks face for PPI mis-selling has almost reached a staggering £13bn."
"More than 2.5 million people have already received payouts, but others are lining up."
"The consumers' association Which? says that the industry was thought to have made a profit of £5bn each year from the sale of PPI - so question marks remain over whether the banks will ultimately lose out."
"Consumer group Which? says that some bank staff were on an 87% commission for selling PPI."
"Finally, Mr Upton argues, there could have been three big miscalculations by the banks - the size of the average payout, the number of claims that they could reject as unfounded, and the numbers who might not have realised they were mis-sold PPI but may eventually come forward."

[Stanley]

The 'Lifetime Free' selling ploy came up again on the Money Programme. Orange are reneging on free broadband in contracts for other services. The point was made during the programme about allowing the marketing department to run the company. For marketing read Cunning Wheezes.

[Stanley]

Report this morning that London is in danger of losing it's leadership in the financial world to New York because 30,000 fewer are employed in London due to the scandals and cut-backs. What a simplistic way of assessing the value of an economic sector. More to do with gripes about job losses and the effects of the scandals I suspect.

[Tizer]

A Bank of England man was quoted in The Times last week speaking about the top executives in British banks and essentially accusing them of corruption. Said that when one of them wants to exert influence over another it's an invitation to a dinner party followed by "I say old chap, would you like to borrow my house in Tuscany for a week or two?" Nothing new in that activity but perhaps having the Bank of England exposing it is new. Pity they don't do something about it.

[Stanley]

Tiz, no amount of legislation or regulation will change the fact that dishonest and immoral people get into positions of power. If the ethics of the banks are to heal it should come from the inside. A few bankers in handcuffs might speed the transformation. Fear can be a powerful influence.
Did you watch the dire performance of Amazon, Starbucks and Google representatives in front of the committee yesterday? I loved it when the questioner asked the Starbucks man if they were a charitable organisation. After all, according to them they have traded in UK for 15 years at a loss... Don't expect any swift improvement in the tax take. Some of us have long memories and these companies are using exactly the same tricks as the ones that the Vesty family used for years to ensure that their family meat business (Dewhurst's butchers) paid tax in the lowest administration they traded in. In their case Argentina where they had considerable influence. The oil companies do the same thing.
Forecast for New Year bonuses in the City are about £1.6billion, a fifth of what they were last year. This means the Treasury loses out on tax take....
A report this morning from the Institute of Insolvency Practitioners says that high interest 'pay-day loans' are up 50% over the last twelve months. Some people will make money out of anything.....

[Tizer]

Forecast for New Year bonuses in the City are about £1.6billion, a fifth of what they were last year. This means the Treasury loses out on tax take....

Good. The UK shouldn't be relying for its tax revenue on shiny suits paying dice with the nation's pension funds!

[Tizer]

RBS are having to pay compensation to 90,000 customers for various failures including not warning them of price increases. It's not simply down to mistakes but involves blatantly breaking government regulations. Have they no shame?

Remember Capita Group which does lots of outsourcing for government departments and has a knack for making computer systems that don't work and let down millions of people? A subsidiary of Capita has got into trouble with the FSA for mis-selling investments, mostly to the elderly, on a grand scale - the usual scam of selling them unsuitable risky investments got up to look like safe ones. The subsidiary was to be fined £4 million but the FSA has changed its mind and let them off because much of the money would `unfairly' have to come from the parent company. Sounds dodgy to me! (Did you know that from 2004 to 2009 Sir James Crosby who oversaw the downfall of HBOS was a senior bod at the FSA? And now look what they are saying about him: LINK

[Stanley]

I saw a report in PE about it Tiz and you're right, they have been running wild and eventually must be reined in. The new body at the BofE isn't going to be much good for at least 12 months. This was pointed out yesterday in a discussion on You and Yours about a woman who owed over £4,000 on pay day loans rolled over after an initial loan of about £100 and Paul Lewis was commenting on it, he said that it will be over 12 months before the new body got round to implementing the interest rate cap proposed by the government. Why so long?
Interesting discussion last night on 'World Tonight' on R4. They were discussing the Starbucks offer to voluntarily pay a bit more tax. One commentator said it was almost as though they regarded HMRC as a charity and they would deign to support it. Nothing new in this ploy of course, look up the Vesty family and Dewhursts butchers, they ran this off shore scam for over 40 years. Problem is of course that it isn't down to HMRC to stop it unilaterally, there are international rules which govern this.

[Stanley]

This is the time of year when I get my affairs in order so I can start the New Year clean and free of debt. So I decided to pay off what I owe on my credit card but because I wasn't waiting till the end of the month for the new bill to arrive I needed the postal address. Would you believe it's not on the back of the form or on the website, in the end I had to ring three numbers and punch in my details over and over again. It wasted half an hour. (Quick burst of Primal Scream therapy!) Why oh why don't they just put the address on the bill?

[Stanley]

HSBC has settled the money laundering case in the US by shelling out a £1.2billion fine, plus of course all the legal and administrative costs. Now eho will have to pay for that? These people certainly have a way with our money!

[Tizer]

The BBC's Robert Peston answers your question: "The point, as the Governor of the Bank of England said recently, is that banks may not have adequate capital to absorb the full financial cost of all the punishment being meted out for banks' past sins. And as you will be tired of hearing, capital is expensive. And when banks are obliged to raise more of it, the burden falls initially on investors and subsequently on customers - who are forced to pay more for banking services to reward the providers of the capital. Or to put it another way, we are all punished when banks are found guilty."

That's the conclusion at the end of his article here: http://www.bbc.co.uk/news/business-20667868

[Stanley]

Thanks for that Tiz. How did we get to a point where news that a bank has been caught out doing something wrong is regarded as normal, it's only the size of the penalty that grabs the headlines. In any other walk of life there would be criminal sanctions and more hand-cuffed bankers. In the end, that's the only solution but of course the Lords of the Universe are above such mundane solutions.