10 Things the Banks wont tell you.

[Conniff]

I have just read this on MSN and thought those who do not use MSN would like to read it.

 

 

 

 

10 things your bank won’t tell you

 

 

By Emma-Lou Montgomery

September 09 2008

Most businesses live or die on the back of the service they provide (or fail to provide) for customers. Yet the banks seem to have it all their own way, while we poor customers have to accept what they give us without complaint.

If you're unhappy with your bank you're not alone. In fact, the Office for Fair Trading is right behind you. After a recent survey of the relationship customers have with their bank, it came to the conclusion that personal current accounts are "not working well for consumers".

So why do we put up with it? Probably because all banks are perceived to be "as bad as one another", while in truth, they're not.

So if you want to check whether your suspicions about your bank's failings are true or a figment of your imagination, check them against this list of 10 things that your bank won't (willingly) tell you.

 

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1. Your loyalty means nothing to us

While we're, on average, more likely to ditch our partner than our bank account, don't expect your bank to thank you for it. It won't. The truth is they'd rather serve a new customer than you.

We've all seen the television ads about the bank that doesn't give two hoots for its customers; the claim being that the bank making the ad is different. But in reality it's probably not. Few banks appear to be bothered about their customers. All they're interested in is their rivals' customers. Because they want them to bank with them instead.

That's why all the special rates, new deals and exclusive offers are targeted exclusively at them and not you.

And, according to the Office of Fair Trading's report, the banks can do what they like, because few of us bother to do anything about it anyway - including taking up one the rival banks' shiny new, better-rate offers. Only 6% of bank customers switched accounts in the past 12 months. Why? Inertia usually. The OFT says 47% of those consumers surveyed hadn't even considered switching.

Every penny in your current account should be earning you money. Because it's making the banks plenty. Your current account may not be bulging with cash, but with billions of pounds in our collective bank accounts the banks are sitting on a fortune. And they do very nicely lending it out and earning money on it.

 

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2. There is no such thing as a free bank account

All the commotion over bank charges and whether banks should be able to hammer customers whenever they go into the red has sparked a huge debate over whether the end of free banking is nigh.

Well I've got news for you. There's no such thing as free banking. Technically, banking is "free", as in fee-free, as long as you stay in the black. Then, one slip into the red, or one late payment and your bank will be down on you like a tonne of bricks - even if it is just a minor sum or a one-off.

The OFT report calculates that about 81% of the income the banks make comes from charges to customers with insufficient funds in their accounts or interest payments. An eye-watering £2.6 billion and £4.1 billion, respectively.

And even if you never go into the red you're still paying for your bank account. The OFT report suggests that even "good" customers pay - on the difference in the interest that the banks make on customers' money and what they pay back in interest.

And it doesn't take Einstein to see how they do that when they pay 0.001% on your current account balance, but charge more like 20% when you slip into the red.

 

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3. When it comes to identity fraud they're part of the problem

The banks are part of the problem when it comes to identity fraud. And they know it.

If they're not sending your personal details to outsourced operatives working on the other side of the world they're failing to put proper measures in place to ensure our details are safe when we bank online.

Barclays, RBS-NatWest and HBoS, have all been been criticised by the Information Commissioner for dumping customers' details in rubbish bags outside branches.

Nigel Evans, chairman of the all-party parliamentary group on identity fraud said the banks' blasé and sometimes dismissive approach to ID fraud was alarming.

Just make sure you don't increase your chances of becoming a victim. Shred any documents before throwing them away, and keep your PIN, cards, cheque book and passwords safe and/or secret.

 

MSN Money's guide to beating ID fraud

 

4. Use your card abroad - and make us a fortune

It's meant to be a quick, easy and hassle-free way to get your hands on cash while you're abroad, and it is. That's why it's estimated that we will have withdrawn a record £7 billion from overseas cash machines this summer and spent up to £5 billion more on our cards.

But, depending on who you bank with, it could have cost you to do so. The consumer group Which? says people making purchases on their debit or credit card abroad face fees of more than £20 if they spend £500 on holiday. Most cards add a foreign exchange loading fee of 2.75%, and debit cards usually add a handling fee for each purchase.

 

5. We'll leave you high and dry if we suspect fraud

Imagine being the other side of the world and finding, without warning, that your credit card has been frozen.

How are you supposed to pay for a hotel room, hire a car, even make a phone call to your bank if you can't get your hands on any of your money? It's a terrifying situation to be in, and one that's all too common.

Many of the banks use an automatic system that freezes people's accounts the minute it suspects fraudulent or otherwise "irregular" activity has been going on. That's all well and good if it's true, but what if a two night stay in New York, followed by a flight to Las Vegas leaves you high and dry without so much as a telephone call from your bank.

The first thing you know about it is when you try to check out of your hotel and find your card's been declined. Then you find your bank's fraud department is closed for the night.

The best way to avoid this sort of thing happening is to inform your bank before you travel and always take an alternative form of payment with you, in case of emergencies.

 

Focus on holiday money

 

6. You'd be better off looking elsewhere

Under FSA regulations, banks and other financial services companies have to be transparent about their charges and the advice they give, but many get away with looking as though they're offering a more comprehensive service than they really are.

You should always shop around, no matter how good a deal the bank tells you you're getting. They will only ever sell you their own products, so be alert, and don't fall for their slick sales patter.

 

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7. We'll charge you to get at your own money

Never mind withdrawals abroad, use your card to get cash from some hole-in-the-wall machines and you'll pay a fee just to get your hands on your own money.

The banks say they're not the ones making a profit from it, and it's out of their control, but they still let companies get access to your account - and charge you for it.

 

8. That 0% credit card balance could end up costing you a small fortune

While consolidating your expensive credit card balances onto one low or 0% rate may seem a cheaper way to pay off your debts, be careful because it can be a slippery slope that can see you worse off than before.

For starters there will usually be a fee to switch the balance to the new card (usually between 2% and 3% of the amount moved) and if you continue to use the card for purchases, you'll effectively lose your 52 day interest-free period because of the way repayments are structured.

Instead of being able to pay off the more expensive debt first - ie the purchases made that month - you'll find the sum you pay will clear the 0% debt first, leaving everything else accruing interest at the standard 18% or whatever the card charges. So your "bargain" 0% rate soon goes out of the window.

 

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9. You can claim back all those charges we've added

All those charges you've incurred on your credit card should be repaid to you - all you have to do is ask.

A 2006 ruling by the Office of Fair Trading has made claiming them back a necessity - and bank charges are likely to be next on the hit list.

So don't delay, ask for your credit card charges back. The companies have to repay them to you. And while you're at it, ask for charges on your bank account to be returned too.

The final decision has yet to be made, but that shouldn't stop you asking for the money back. You could get hundreds, if not thousands, of pounds back.

 

MSN Money guide to reclaiming bank charges

 

10. We may do some highly unethical things with your money

Barclays strenuously denied it was doing anything other than trying to achieve change in South Africa during the 70s and 80s, but campaigners always insisted it was propping up the regime.

And there will probably always be question marks over what the banks do with our money while it's in their hands.

If you're concerned about what yours is doing with your cash while it "sits" in your account, then bank with the Co-operative Bank or one of the building societies.

If you want to see how your bank fairs on the ethical front, the Ethical Society ranks banks' activities as ethical or otherwise under its Ethiscore system. Go to Ethiscore.org for more information.

 

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[CardFight]

Thanks for sharing Conniff, I noticed that today aswell, quite informative I thought