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Independent Banking Advisory Service 

Established in 1992


Banking News & UK Comment 2005 


Can you trust the financial services industry? 2005 ended much as it began with Consumers having less trust in Financial Services and a growing activity in switching accounts, resisting penalties and more awareness to overcharging of fees and interest. Consumer anger is growing and more are asking why the Government refuses to bring this industry under control.

Less than half of Britain's consumers would recommend their bank to friends and family. A YouGov survey for ING Direct banking group found. ING Direct chief executive Lindsay Sinclair said: "Britons are fed up with receiving poor service and unfair products from their banks." She said as a result, consumers were "quite rightly wreaking their revenge by warning off friends and family". Bad customer service topped the list with 63% and 56% would not recommend their bank, the survey found, while 40% said they had influenced a friend's financial decision. IBAS support consumer power influencing bankers and Consumer power is growing and forcing banks towards better and fairer service by increased competition. So not put up with shoddy service or unfair bank charging - switch suppliers. Do it now - today and make your account matter.

The Cruickshank Report on UK Money Transmission in Chapter 3, established that this was a monopoly by the big UK banks - that position has not been corrected by the Government. Bank consumers have continued to be financially disadvantaged (or in plain English 'ripped off') since the Cruickshank report was published. The banks have been allowed to enjoy a further 7 years of monopolistic profiteering in an area which affects every UK consumer in their daily life - this is the reason IBAS  renewed demands on Government for a £10 billion windfall tax on this industry.

Don Cruickshank, who carried out a Government-commissioned review five years ago - is quoted as accusing the banks of still operating a complex monopoly and said that he believed nothing had been done to boost competition among banks and that the profits should sound alarm bells. He told the Guardian: 'Sustained (and) very high profitability is an indication that they are operating in a complex monopoly and that on balance this is bad for the economy.' Clearly, Don Cruickshank who was the senior investigator of the banks just five years ago is more able than most consumers to comment on the current high profits generated by the big banks. His views completely endorse our own.

Consumers have already waited far too long for this industry to regulate itself. Only the demand for a £10billion windfall tax against this industry will  give this government some credibility in consumer's eyes. We have had enough promises. But, legislation on clearance of cheques and electronic transfers is even more necessary as the banks have continued to filibuster, just to boost their own profits. If both are not shortly evident then UK consumers might well conclude that Government has been 'selling them short' and that 'the tail' is really 'wagging the dog'. They might well vote accordingly. Alienating consumers on top of all else that has happened? Risky for the forthcoming election? - 25.02.05

It seems that Sir George Mathewson, RBS's chairman, has already confidently dismissed even the idea of a windfall tax being imposed on the banking industry. When asked about this specific issue (The Independent 25.02.05) he said, "I would find it very difficult to believe that this government would do such a thing."  Why? Does he know something we don't? Has this Government 'sold out' to the bankers? - 25.02.05

126 people a day are now declared bankrupt. - That's 70% higher than in 1995. Figures are expected to reach 50,000 this year. UK consumer's have 5 times the European average of credit cards available to them and as the UK debt mountain grows the bankruptcy figures are predicted to follow the same upward route. Even modest rises in Base Rates are tipping heavily indebted people 'over the edge' and into bankruptcy. Short term mortgage arrears showed its first major increase in six years and home repossessions have also soared by 16%. Predictions are that home repossession will rise further to 128,000 by 2007 - The CML said: 'With short-term arrears now increasing, we are bound to see a rise in longer-term arrears and repossessions following behind' - The social costs of Bankruptcy and Home Repossession have yet to be properly quantified but the NHS will bear a great deal of the cost burden judging from IBAS case studies. - 09.02.05

£30billion profits make UK banks 'jittery' - Perhaps, the banks think they will appear to be profiteering? After all, they've all been pretty successful - making huge profits over more than a decade. Now, the British Bankers Association (BBA - the bank's trade association) say how cheap it is in the UK to bank and how much better off we are than those in US who pay for checking accounts. The well oiled wheels of the bank's 'spin' machines start to roll out some 'facts' to protect the excessive profit making function. Their message: it's not consumers who've provided the banks with these fantastic profits - they are making it from UK Business Banking and corporate banking instead. Well, that's alright then -  consumers will now be able to breath much more comfortably - if they know that the most recent profiteering has been primarily focused on business and corporate banking. Consumers will obviously forget (or perhaps they just don't know) how much over the existing base rate (Base Rate is 4.75%) their credit cards are charged?

But, hang on a minute - wasn't the Competition Commission interested in the lack of effective competition in business banking? Wasn't this particular area actually deprived of effective competition? If you're an SME business banking customer, has your bank interest margin on lending reduced? or has it enlarged? As base rates dropped we've seen business banking account margins increase - 2% over base became 3% over base (that is a 50% increase on the margin) and so on..., it seems that any benefit provided by lower Bank of England Base Rates has been taken by the banks to increase their own profits.

£30billion profits this year for the big high street banks - Bank unions are not happy, customers feel ripped-off, only bank shareholders isolated from the many customer complaints will be pleased. Last year an analysts said: "If one or two banks say they are making these sorts of returns, you could say it is due to a particular expertise. But when the whole sector is saying it, that is suggestive of excess profits." This year it's the same story again - that's why IBAS are again  calling for this Government to impose a substantial windfall tax on this industry. Asking banks to treat their customers 'fairly and reasonably' (the major two principles) under the voluntary Banking Code has clearly become ridiculous and also overly ambitious as even a starting point. These massive profits are becoming an insult to most consumers intelligence. When faced with a choice banks look after their profit first - consumers are just their 'cannon fodder' for more profits. Banks are not truly accountable and are still protected by this Government against the UK consumer's best interests - that's why we are seeing profits increase year on year. A substantial windfall tax might restore the Government's credibility on this issue.

This week saw another UK credit card suicide. Richard Cullen, a Grandfather of 10,  was found dead on January 12th. His credit card debts were £130,000 apparently built up over a period of just 6 years and spread over 20 credit cards. He became 'stressed' after receiving up to 20 demand calls a day from finance companies - which he had kept secret from his wife. How many more lives will be lost to credit card debt before greedy lenders (charging higher and higher fees and penalties) are properly policed or controlled? It's time the Government got tough on banks and lenders - Profiteering has now reached epidemic levels and only the Government can be blamed for allowing banks to continually plunder UK consumers. Bumper Bank profits are again forecast shortly and analysts forecast that profits will be up 25% on last year. These are massive figures and total £30bn in profits for the big 9 banks only.

Our message for 2005 is to keep hold of your credit (or debit) cards and not allow anyone else to know or even see your pin. That means exactly what it says - do not let your card out of your sight at any time, no matter how difficult that may seem, particularly at garages or restaurants. Card fraudsters are making lots of money - some of it at the customers expense when the bank refuses to pay up, claiming the customer has been negligent with the card or the pin. The new chip and pin cards make it easier for banks to deny any future claims whilst apparently making cards more 'fraud proof' - therefore customers must be even more vigilant in protecting their cards.


Independent Banking Advisory Service (IBAS) - launched in 1992 as a specialist business banking membership organization assisting bank customers with UK business banking account loan disputes and business banking debt disputes with their bank. Our analysis and investigation of business bank loans, bank accounts, banking contracts, business banking account facilities and banking debt recovery information has been instrumental in our member's success.

IBAS business banking dispute negotiating experience provides proven strategies for business bank customers banking claims and defences. IBAS has excellent banking investigation reputation and IBAS has featured on BBC TV, BBC TV News, ITV, Meridian and Sky News and contributed to editorials and articles for the Sunday Times, Times, Daily Mail, Daily Express and Daily Mirror - see Business: Your Money Not a moving account  - BBC 22/07/99


Last modified: 27th March 2018