Consumers fed up with banking goliaths
Published On 6 March 2007
It's not exaggerating matters to say that most consumers in the UK are customers of one of the so-called "big five" high street banks, namely Lloyds TSB, NatWest, HSBC, HBOS and Barclays.By and large these banks have dominated Britain's high streets for the past few decades, leaving little room for competitors. But now it seems like these giants, rendered over-confident by years and years of dominance, could be headed for a fall.
New research by personal finance website Fool.co.uk has shown that a full 80 per cent of the customers of these big boys are fed up and are starting to look for other places to keep their hard-earned brass. Many are tired of practices they deem tantamount to daylight robbery.
Sky-high fees for everything from missing a payment to bouncing a check have left many resentful and outraged. And the big five shouldn't be counting on sheer loyalty alone to keep customers. The research shows that over 50 per cent of those itching to leave their banks have been customers for over a decade.
Perhaps it doesn't help that these banking behemoths continue to post record profits year after year. For 2006, HSBC posted record pre-tax profits of £22.1 billion, up from the £21 billion posted in 2005.
Barclays, perhaps the most notorious bank for charging massive fees, posted a 2006 profit of £7.14 billion, up a full 35 per cent from they year previously. Overall the big five banks posted profits in excess of £40 billion in 2006, a figure which elicited a collective gasp of outrage across Britain when it was released.
Vince Cable, the Liberal Democrats' Treasury spokesman, said: "Banks are still enjoying excessive profits, based all too often on the exploitation of vulnerable customers through unfair, and in some cases illegal, bank charges."
On the upside, it finally seems that people are no longer willing to be sheep to the banks' wolves. Currently over one million customers are preparing to sue their banks to reclaim unfair charges levied for late payments and unauthorised overdrafts.
And that champion of the people, the Office of Fair Trading is due to make a decision later this month on whether the banks have acted illegally in charging customers sums of £30 or over. Expect a ruling against the banking mafia.
The Financial Services Authority is also belatedly getting in on the action by launching an investigation into how the banks have dealt with customer complaints. There have been reports of banks shutting customers accounts after they dared to query charges.
So the upshot is this: if you're a customer of one of these big banks, which you probably are, stop and have a little think, because you've got options. Reclaiming unfair late charges isn't as complicated as it sounds. Several websites, including Which.com supply free pre-drawn up forms.
Furthermore, one may wish to think about simply putting one's money elsewhere, for instance Zopa, the online borrowing and lending firm, which has been called "a real alternative" by consumer website Fool.co.uk.
