UK_Bank_Customers_Information.htm

Independent Banking Advisory Service

UK Bank Customer's Information

News Flash - UK Bank Penalty Charges on Consumers Accounts - Judgment was on 24th April 2008

High Court hearing has taken place with Justice Andrew Smith hearing evidence on the OFT's claim and the individual bank defence to the OFT's claims. Mr Justice Andrew Smith, in concluding on the 14th day of the hearing, said he had "no idea at all" when he would be able to deliver his judgment. "I have a great deal of work to do before I make my judgment," he said.

He decided that his draft judgment would be sent out only to a "very tight circle" of named lawyers for the OFT, seven banks and the Nationwide building society. Mr Justice Smith decided that he will probably give the parties to the case just 24 hours to respond to any typographical or factual errors. - 8th February 2008

Northern Rock Job losses were inevitable once management tried to swim ‘against the tide’. The errors by Northern Rock management in expanding their long term mortgage business with short term and ‘risky’ borrowed money means that any plans to run the NR as an ongoing business will soak up even more cash, as the further funding by the Bank of England has illustrated. Whoever ends up running NR will have to realize NR assets and will also need to prune jobs as well.

If Northern Rock had been any other business outside of banking even more job losses would have occurred and more quickly. The longer this debacle runs the more my thinking is that NR should have been left to the liquidators. Jobs will be lost in considerable numbers which ever route is followed now. - 6^th February 2008 - Eddy Weatherill, Chief executive, Independent Banking Advisory Service (IBAS)

Want to find a Credit Union or find out about Credit Unions? CU News and assistance in finding a local Credit Union for 2008. This may enable you to find an alternative to your bank or 'spread' your options at better rates for you. Also, for either lending or borrowing without using banks its worth checking out Zopa the 'social lending' people. They say that 'Social lending is a smarter, fairer and more human way of doing money.' It has to be worth a look.

Set up to fail - The recent CAB Report shows how dubious advice from brokers, irresponsible lending decisions and aggressive arrears management by sub-prime lenders are driving the current increase in mortgage arrears, court action and home repossessions. It also shows how regulation and safety nets currently in place are failing to protect vulnerable borrowers. CAB Report December 2007.

Norwich Union fined on £3m Fraud - The FSA said the danger went beyond those who had actually lost money. "Regardless of whether a policy was surrendered or not, confidential customer information regarding the policy was disclosed to the fraudsters in almost all of those 632 cases," said the FSA. "In some cases, this included the customer's full bank account details," it added. - 17/12/07

Boiler Room Fraud -This week two men were arrested as police helped the FSA raid several addresses in England. The FSA suspects the men of involvement with Universal Management Services (UMS) a front for fraudulent share traders known as "boiler rooms". The fraudsters involved are not authorised by the FSA.

Current Scams & Cons

Boiler Room Fraud - Boiler rooms are usually based overseas but sometimes operate with the help of "front" organisations in the UK that channel the money abroad. The FSA has no jurisdiction overseas but tries to close down any boiler room activities here. Share scams (also known as boiler room fraud) – a stranger rings you out of the blue and tries to offer you shares in a company you have never heard of. They typically sell shares to unsuspecting members of the public by cold-calling them. They then persuade their victims to buy shares that are worthless or have little value.

The FSA said it suspected that UMS had been helping illegal boiler rooms after it received complaints from the public about the high-pressure tactics of the salesmen, who had told their victims to make out cheques to UMS.

The FSA said UMS, which is unrelated to at least four UK registered companies with similar names, appeared to have been taking payments for at least six known boiler rooms. The regulator suspects victims of the fraud may have been conned out of £5m. Assets worth about £5.5m have been frozen so far as part of the investigation - 2^nd November 2007

Although bankruptcy levels are still 2.2% higher than a year ago, IVAs are now running 14% lower than at the same stage in 2006. Lee Manning, an insolvency expert at accountancy firm Deloitte, said "There has been considerable pressure on IVA specialists to be more fussy about the cases they take on," he said. "There have been examples of proposed IVAs that were inappropriate and for which the fees were too high."

Repossessions - Despite the fall in the number of repossession orders that lenders have gained in the courts - the first stage in the repossession process - there have been warnings this week that actual repossessions will rise by about 50% next year. - The Council of Mortgage Lenders predicted that repossessions could rise to 45,000 by the end of 2008, with the number of mortgages more than three months in arrears also going up, by 17% to 170,000.

It said this would be due to homeowners finding it impossible to keep up with rising mortgage payments. Mark Sands, from accountancy firm KPMG, said this in turn would drive up the personal insolvency figures.

"They are both driven by the ability to refinance and the pressures on household budgets," he said. "We expect long term that they will go up hand-in-hand with repossessions next year." - 2^nd November 2007

News of a slump in fresh mortgage lending for last month. The British Bankers' Association (BBA) confirmed new mortgage approvals for house purchase at 52,685 were down by 27% on September last year. Last week, the Council of Mortgage Lending revealed that the value of gross mortgage lending had also fallen for the third month in a row. It seems the five increases in interest rates since the summer of 2006, along with last month's Northern Rock fiasco has taken the steam out of the UK housing market – at least for now. - 25th October 2007.

Bank personal account and credit card customers wanting to 'kick-start' their finances have never had a better opportunity by reclaiming penalty charges levied by their banks during the last 6 years - it's certainly easy enough to do. IBAS do not recommend that anyone use the the newly emerging 'ambulance chasers' offering to reclaim penalty fees for 'a percentage'.

Many of these operations are previously 'unknown' in this industry and providing any sort of personal financial information to unknown and opportunistic trading entities (who may claim they have been in existence for a number of years and with great success) - should be avoided. It is too easy to lose your financial identity in that way and also far more costly in the long term. Thinking about No-win-no-fee? Bank charge firms under spotlight

IBAS has stated clearly for more than fourteen years that there is no excuse for bank 'profiteering' - the penalty fees debate has shown that the banks are not confident that the law is on their side in this area.

This is just one of many such areas where profiteering by banks has been allowed for too long and IBAS has repeatedly requested Government to windfall tax banking because of that profiteering. However, Government has refused that option.

Consumers have now taken the opportunity presented to them and are reclaiming 'unfair' penalties in volume. Those penalties were in our opinion 'inflicted' on bank consumers by lenders purely for the profit they would generate and for no other reason.

Fair, decent profit should be applauded by us all - equally unfair or indecent profit which is created by intentional and targeted profiteering should be abhorrent to us all. - Eddy Weatherill, Chief executive, Independent Banking Advisory Service

The billion pound 'bank robbery' showing how call centre information and other sources link up to provide intelligence for international fraud on bank consumers. Your ID card details will be sold to the banks & here

Bank current accounts challenge - The monopoly of banks and building societies on current accounts has been broken - Credit Unions have started offering fully functioning current accounts to their members after one successful pilot attracted 1000 customers - unhappy bank customers now have another option open to them to 'vote with their feet' - 23.3.07

UK attacked over savings scandal - A damning report by a European Parliament committee states that - The regulators showed "excessive leniency" towards Equitable's solvency margin and "undue 'awe' or 'deference'" towards the company, apparently believing it to be "'too good and too reputable' to make mistakes", the report says.

"Although the FOS [Financial Ombudsman Service] can be considered as one of the more advanced out-of-court dispute settlement schemes in Europe... the Equitable Life case has revealed a number of serious shortcomings in its operation," the report says.

Payment Protection Insurance (PPI) - The biggest scandal since endowments says The Times - yet another financial industry 'scam' is being investigated by the FSA and will lead to fines by the FSA and inevitably compensation payouts by those firms now being named and shamed.

Providing IVA's (Individual Voluntary Arrangements) - It seems that CCCS who set up in 1993 want to enter this market place because "The big banks, who fund the charity, have been alarmed at the surge of insolvencies. For a typical IVA, when a borrower is struggling to pay back £20,000 in credit card debts and loans, the bank usually only get 30pc to 40pc of the total loans back."

Who funds the CCCS? The article explains - "The big banks such as Lloyds TSB, Barclays and HSBC. The association asks the banks for voluntary contributions totalling £15m a year because it argues that the lenders would have higher bad debts if CCCS didn't step in to help."

So CCCS want to enter the market because the bank's want them to - and presumably this is because the banks want to increase what they then obtain in any IVA which is set up by CCCS - will that really help the consumers? Or, will it help big banks more? Full story in Daily Mail 24.1.07 - City and Finance page 67

What a good start to 2007 - Up to 10 banks and lenders are expected to be fined by the FSA for miss selling payment protection insurance (PPI) in coming weeks. IBAS have had so many complaints about PPI being sold by lenders and being added to loans and overdrafts over the last decade that it has become a National scandal. Financial providers have 'ripped off' personal and business consumers to enlarge profits whilst providing little or nothing in return. Now we wait to see which banks will be named and shamed by the FSA! - 22.01.07

How Brown learned to love banks - an analysis by BBC business editor Robert Peston - shows why The Chancellor is being backed by the banks and also why the Chancellor backs the bank's increased profits (within which there is profiteering). It also illustrates why The Cruickshank Banking investigation of 6 years ago was sandbagged/ rerouted and delayed in taking effect, which was completely against consumer interests. Money and Power always go hand in hand. Pity consumers have neither on their side! 13.10.06

Stephen Hone website show how to claim penalty charges back. He has recently led the way by successfully obtaining a considerable refund settlement from his bank. His website is informative and provides UK bank consumers with information so that they too can also obtain refunds for penalty charges levied by profiteering banks who have 'ripped off' UK banking customers for more than a decade.

We have seen no real intervention from regulators in our 14 year history or effective use of the legislation that has been provided to protect bank consumers. Plenty of words, plenty of hype, but no action for banking consumer's benefit. The banking industry will never regulate itself properly, it is just too greedy - enough is enough. It is our opinion now that real and effective policing of this industry will only follow intense consumer action and concerted campaigns against excessive and unlawful charges by the Banks and lenders.

IBAS has called for a Windfall Tax on this industry for a number of years and will continue to do so, because this is an industry which is still deliberately under-policed, with ineffective controls to protect business or personal consumers from bank profiteering.

Halifax home repossession suicide - yet another life lost to mortgage arrears and repossession threats. £5,000 mortgage arrears cost another life whilst banks again declare maximum bank profits. Visit Mortgage shortfall debt resolution if you have been repossessed and now have a further home at risk.

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 (in plain English equals '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 that IBAS renewed demands on the Government for a £10 billion windfall tax on this industry. Banks & Small Businesses BBC TV News Interview with IBAS illustrated our views.

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Independent Banking Advisory Service (IBAS) is a national, independent, non-profit, unique specialist banking customer membership organization, which has campaigned on UK Banking customer issues for more than 14 years, providing bank and banking assessment, analysis, bank comment and content for BBC TV News, ITV, Radio and national newspapers - keeping many serious banking issues 'alive'.