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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Want to send a positive Brexit message to Europe? Back Arsene Wenger for England manager

Boris Johnson could make a gesture of goodwill. 

It is hard not to feel some sympathy for Sam Allardyce, who coveted the England job for so many years, before losing it after playing just a single match. Yet Allardyce has only himself to blame and the Football Association were right to move quickly to end his tenure.

There are many candidates for the job. The experience of Alan Pardew and the potential of Eddie Howe make them strong contenders. The FA's reported interest in Ralf Rangner sent most of us scurrying to Google to find out who the little known Leipzig manager is. But the standout contender is Arsenal's French boss Arsene Wenger, 

Would England fans accept a foreign manager? The experience of Sven Goran-Eriksson suggests so, especially when the results are good. Nobody complained about having a Swede in charge the night that England won 5-1 in Munich, though Sven's sides never won the glittering prizes, the Swede proving perhaps too rigidly English in his commitment to the 4-4-2 formation.

Fabio Capello's brief stint was less successful. He never seemed happy in the English game, preferring to give interviews in Italian. That perhaps contributed to his abrupt departure, falling out with his FA bosses after he seemed unable to understand why allegations of racial abuse by the England captain had to be taken seriously by the governing body.

Arsene Wenger could not be more different. Almost unknown when he arrived to "Arsene Who?" headlines two decades ago, he became as much part of North London folklore as all-time great Arsenal and Spurs bosses, Herbert Chapman or Bill Nicholson, his own Invicibles once dominating the premier league without losing a game all season. There has been more frustration since the move from Highbury to the Emirates, but Wenger's track record means he ranks among the greatest managers of the last hundred years - and he could surely do a job for England.

Arsene is a European Anglophile. While the media debate whether or not the FA Cup has lost its place in our hearts, Wenger has no doubt that its magic still matters, which may be why his Arsenal sides have kept on winning it so often. Wenger manages a multinational team but England's football traditions have certainly got under his skin. The Arsenal boss has changed his mind about emulating the continental innovation of a winter break. "I would cry if you changed that", he has said, citing his love of Boxing Day football as part of the popular tradition of English football.

Obviously, the FA must make this decision on football grounds. It is an important one to get right. Fifty years of hurt still haven't stopped us dreaming, but losing to Iceland this summer while watching Wales march to the semi-finals certainly tested any lingering optimism. Wenger was as gutted as anybody. "This is my second country. I was absolutely on my knees when we lost to Iceland. I couldn't believe it" he said.

The man to turn things around must clearly be chosen on merit. But I wonder if our new Foreign Secretary Boris Johnson - albeit more of a rugger man himself - might be tempted to quietly  suggest in the corridors of footballing power that the appointment could play an unlikely role in helping to get the mood music in place which would help to secure the best Brexit deal for Britain, and for Europe too.

Johnson does have one serious bit of unfinished business from the referendum campaign: to persuade his new boss Theresa May that the commitments made to European nationals in Britain must be honoured in full.  The government should speed up its response and put that guarantee in place. 

Nor should that commitment to 3m of our neighbours and friends be made grudgingly.

So Boris should also come out and back Arsene for the England job, as a very good symbolic way to show that we will continue to celebrate the Europeans here who contribute so much to our society.

British negotiators will be watching the twists and turns of the battle for the Elysee Palace, to see whether Alain Juppe, Nicolas Sarkozy end up as President. It is a reminder that other countries face domestic pressures over the negotiations to come too. So the political negotiations will be tough - but we should make sure our social and cultural relations with Europe remain warm.

More than half of Britons voted to leave the political structures of the European Union in June. Most voters on both sides of the referendum had little love of the Brussels institutions, or indeed any understanding of what they do.

But how can we ensure that our European neighbours and friends understand and hear that this was no rejection of them - and that so many of the ways that we engage with our fellow Europeans rom family ties to foreign holidays, the European contributions to making our society that bit better - the baguettes and cappuccinos, cultural links and sporting heroes remain as much loved as ever.

We will see that this weekend when nobody in the golf clubs will be asking who voted Remain and who voted Leave as we cheer on our European team - seven Brits playing in the twelve-strong side, alongside their Spanish, Belgian, German, Irish and Swedish team-mates.

And now another important opportunity to get that message across suddenly presents itself.

Wenger for England. What better post-Brexit commitment to a new Entente Cordiale could we possibly make?

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.