More mis-selling among high street banks

Scandal over fee-charging accounts lower trust, again.

The PPI mis-selling scandal has threatened to engulf the packaged account offerings of the UK’s high street banks.

In February of 2012 it was reported that the fee-charging account market in the UK was booming, worth nearly £2bn and rising. With regulation on the up and a low interest margin rate adding pressure to an industry facing crisis after crisis, banks turned to packaged accounts as a source of regular, easy cash.

Unfortunately they may have taken to them with a little too much enthusiasm, with banks being accused of signing up people who have no use, and may not even be eligible, for the features of their packaged accounts.

Amid claims of aggressive sales practises Lloyds TSB pulled their packaged accounts from sale in their stores and over the phone from the 1 January 2013. The AVAs are still available for customers to sign up to online, far removed from pushy sales staff.

According to Lloyds the reason for removal of their bundled accounts from sale in-store is that they wish to “harmonise the way we sell bundled accounts across all brands within Lloyds Banking Group, to align the sales process with that currently used within Halifax.”

Halifax continues to offer its packaged account while the sales process is “harmonised” across the group.

A December 2012 Which? investigation of more than 500 front line bank staff showed that there is still high pressure to make sales in Lloyds, Barclays, RBS, HSBC and Santander.

Over half (65 per cent) of bank staff in sales roles and have sales targets say there is now more pressure than ever to meet the goals set for them.

The report showed that mis-selling of products is rampant in all of the big five high street banks. Nearly 50 per cent of staff in sales know someone at the bank who has mis-sold a product in order to meet their targets and 40 per cent say their targets encourage employees try and get the sale when it's not appropriate.

Metro Bank, which turns three in March, removed their packaged account offering in December 2012. Metro Bank Plus was pulled because the fledgling bank “considers its market proposition on an ongoing basis to ensure that it gives the best value to its customers.” Meaning the packaged account was not giving value to customers because no one who bought it (most commonly, it seems, suggestible little old ladies) could use the features.

Santander, who also fled from packaged accounts before the mis-selling scandal consumes them, ditched their packaged accounts in March 2012 in favour of the “simplified” 123 Account. Despite this being a paid current account with bundled features, Santander maintains it does not count as a packaged account.

The ongoing mis-selling scandals are a result of banks who have not yet adjusted to life post-2008 financial crash. Banks who believed the good times and endless credit would never end and that people would happily pay out £10 a month for products they were unlikely or unable to use.

While the mis-selling of packaged accounts won’t bring down the economy, it will only further peoples belief that banks are not your friend and are not to be trusted.

Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.
 

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How Labour risks becoming a party without a country

Without establishing the role of Labour in modern Britain, the party is unlikely ever to govern again.

“In my time of dying, want nobody to mourn

All I want for you to do is take my body home”

- Blind Willie Johnson

The Conservative Party is preparing itself for a bloody civil war. Conservative MPs will tell anyone who wants to know (Labour MPs and journalists included) that there are 100 Conservative MPs sitting on letters calling for a leadership contest. When? Whenever they want to. This impending war has many reasons: ancient feuds, bad blood, personal spite and enmity, thwarted ambition, and of course, the European Union.

Fundamentally, at the heart of the Tory war over the European Union is the vexed question of ‘What is Britain’s place in the World?’ That this question remains unanswered a quarter of a century after it first decimated the Conservative Party is not a sign that the Party is incapable of answering the question, but that it has no settled view on what the correct answer should be.

The war persists because the truth is that there is no compromise solution. The two competing answers are binary opposites: internationalist or insular nationalist, co-habitation is an impossibility.

The Tories, in any event, are prepared to keep on asking this question, seemingly to the point of destruction. For the most part, Labour has answered this question: Britain will succeed as an outward looking, internationalist state. The equally important question facing the Labour Party is ‘What is the place of the Labour Party in modern Britain?’ Without answering this question, Labour is unlikely to govern ever again and in contrast to the Tories, Labour has so far refused to acknowledge that such a question is being asked of it by the people it was founded to serve. At its heart, this is a question about England and the rapidly changing nature of the United Kingdom.

In the wake of the 2016 elections, the approach that Labour needs to take with regard to the ‘English question’ is more important than ever before. With Scotland out of reach for at least a generation (assuming it remains within the United Kingdom) and with Labour’s share of the vote falling back in Wales in the face of strong challenges from Plaid Cymru and UKIP, Labour will need to rely upon winning vast swathes of England if we are to form a government in 2020.

In a new book published this week, Labour’s Identity Crisis, Tristram Hunt has brought together Labour MPs, activists and parliamentary candidates from the 2015 general election to explore the challenges facing Labour in England and how the party should address these, not purely as an electoral device, but as a matter of principle.

My contribution to the book was inspired by Led Zeppelin’s Physical Graffiti. The track list reads like the score for a musical tragedy based upon the Labour Party from 2010 onwards: In My Time of Dying, Trampled Underfoot, Sick Again, Ten Years Gone. 

Continued Labour introspection is increasingly tiresome for the political commentariat – even boring – and Labour’s Identity Crisis is a genuinely exciting attempt to swinge through this inertia. As well as exploring our most recent failure, the book attempts to chart the course towards the next Labour victory: political cartography at its most urgent.

This collection of essays represents an overdue effort to answer the question that the Party has sought to sidestep for too long.  In the run up to 2020, as the United Kingdom continues to atomise, the Labour Party must have an ambitious, compelling vision for England, or else risks becoming a party without a country.

Jamie Reed is Labour MP for Copeland.