Hidden charges: the next big scandal for banks?

The high cost of banks' lack of transparency.

 

If there’s one thing that the banks have probably had enough of, it’s talk of transparency. After all, their recent run-ins with transparency have been largely unwelcome and revealed some hideous schemes – LIBOR-rigging, for example, and the mis-selling of PPI and interest-rate insurance. No wonder they fear daylight.

In many senses, they’re not in the clear yet. Banks and investment management companies are mysterious, opaque and occasionally downright deceptive about the fees they charge to wrangle your money. One woman is as mad as hell about it and isn’t going to take it any more.

Gina Miller, who with her husband, Alan, runs SCM Private, a wealth management firm, has commissioned a survey as part of her True and Fair Campaign, which shows that 92 per cent of people think that investment managers should be legally obliged to provide information about charges.

Gina has spoken out angrily: “It is completely indefensible that two-thirds of people buying investment products do not know how much they are paying in fees and charges.

“But what is worse is the fact that while we call for transparency and 100 per cent disclosure, the industry continues to hide under a thin rhetorical veil promising more disclosure, not full disclosure, and wraps itself in opaque, ill-defined guidelines.”

The government has already gone to certain lengths to try to ensure transparency with its Retail Distribution Review. Investment managers no longer get paid by the people whose products they sell (a clear inducement to favour those who pay more, not whose products are better) but rather by clients. Clients should never not know what they’re paying.

Yet Gina Miller goes beyond this, to hidden fees and charges from the manager: half a per cent to use foreign currencies here, vastly inflated fees to execute trades there.

This may seem like an issue affecting the few – and who has more sympathy for them? As the True and Fair website points out, however, anyone with savings or a pension is likely to be subject to these sneaky fees, too.

Could fees and charges be the next big scandal for the banks? It’s unlikely – the behaviour is bad, not criminal – but they certainly hurt many people and the more light shone on them, the better for us all.

Fee-fi-fo-fum: banks' fees remain opaque and confusing. Photograph: Peter Macdiarmid/Getty Images

Josh Spero is the editor of Spear's magazine.

Photo: Getty
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It's not WhatsApp that was at fault in the Westminster attacks. It's our prisons

Britain's criminal justice system neither deterred nor rehabilitated Khalid Masood, and may even have facilitated his radicalisation. 

The dust has settled, the evidence has been collected and the government has decided who is to blame for the attack on Westminster. That’s right, its WhatsApp and their end-to-end encryption of messages. Amber Rudd, the Home Secretary, wants tech companies to install a backdoor into messages like these that the government can then access.

There are a couple of problems here, not least that Adrian Russell aka Khalid Masood was known to the security services but considered to be low-risk. Even if the government had had the ability to gain entry to his WhatsApp, they wouldn’t have used it. Then there’s the fact that end-to-end encryption doesn’t just protect criminals and terrorists – it protects users from criminals and terrorists. Any backdoor will be vulnerable to attack, not only from our own government and foreign powers, but by non-state actors including fraudsters, and other terrorists.

(I’m parking, also, the question of whether these are powers that should be handed to any government in perpetuity, particularly one in a country like Britain’s, where near-unchecked power is handed to the executive as long as it has a parliamentary majority.)

But the biggest problem is that there is an obvious area where government policy failed in the case of Masood: Britain’s prisons system.

Masood acted alone though it’s not yet clear if he was merely inspired by international jihadism – that is, he read news reports, watched their videos on social media and came up with the plan himself – or he was “enabled” – that is, he sought out and received help on how to plan his attack from the self-styled Islamic State.

But what we know for certain is that he was, as is a recurring feature of the “radicalisation journey”, in possession of a string of minor convictions from 1982 to 2002 and that he served jail time. As the point of having prisons is surely to deter both would-be offenders and rehabilitate its current occupants so they don’t offend again, Masood’s act of terror is an open-and-shut case of failure in the prison system. Not only he did prison fail to prevent him committing further crimes, he went on to commit one very major crime.  That he appears to have been radicalised in prison only compounds the failure.

The sad thing is that not so very long ago a Secretary of State at the Ministry of Justice was thinking seriously about prison and re-offending. While there was room to critique some of Michael Gove’s solutions to that problem, they were all a hell of a lot better than “let’s ban WhatsApp”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.