High Five
The pressure on retail banks to attract deposits in order to fund lending growth became all too apparent this month in the UK.
Despite memories of the financial crisis softening somewhat, in Britain, Halifax Bank – part of the embattled HBOS group – has resorted to literally giving money away in the hope of attracting it back in spades.
Halifax is aiming to entice funds into the group by offering £5 cash to customers who deposit £1,000 or more into their Reward Current Account in any given month.
The irony is almost palpable.
Halifax, and in turn HBOS, is part UK Government-owned and the cash back offer delivers a 0.5% return to those who make an exact £1000 placement – the same as the current cash rate of the Bank of England.
The Government gave HBOS money as part of the major bailout of the group, and now Halifax (HBOS) is giving it to customers in a kind of desperate Robin Hood gesture.
Meanwhile the enticements don’t stop there. Customers in the group’s Ultimate Reward Current Account don’t just get a fiver stuffed in their hands each month; there are a series of other carrots dangled before them.
These include worldwide multi-trip travel insurance, the first £300 of any arranged overdraft fee-free and RAC breakdown cover.
And they say banks are greedy…
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Certified and chartered financial person says:
When you visit a Llolyds TSB/HBOS/Halifax branch office – BEWARE! You may get your ‘free’ £5 but the chances of being sold an inappropriate insurance product or unecessary savings account are very high indeed.
Lloyd Group were the second most complained about UK bank during the first six months of 2009 – as advised by the UK Financial Ombudsman Service (FOS)when it published the complaints record of major financial institutions for the first time.
A total of 8,283 complaints were made about Barclays – 12 per cent of the total made about the financial services industry – while Lloyds group received 5,804.
Both banks settled high levels of cases in favour of customers, 81 per cent for Lloyds and 71 per cent for Barclays, showing that the overwhelming majority of complaints about them were completely justified.
The Financial Ombudsman Service (FOS) decided to publish complaints data for 142 of 10,000 financial providers because sending individual data to banks had resulted in “no improvement” in their behaviour.
“I believe putting this information into the open will give those worse-performing businesses vital encouragement to improve – which should mean fewer customers having to bring complaints to the ombudsman that should already have been resolved,” said Walter Merricks, the chief ombudsman.
Individuals can make a free complaints to FOS about a financial product, whether banking, loans, credit, cards, insurance or investments, after going through a firm’s complaints process.
As a ‘frontline’ UK independent adviser I have helped clients claim successfully (100% success aret so far)for mis-selling by Lloyds TSB/HBOS/Halifax. The standard of ‘advice’ (aka ‘product selling’) would make your hair stand on end. Where a customer said ‘no risk please’ they were floged a £50,000 corporate bond with 25% investment in ‘junk’ high yield bonds! The FOS have found in my client’s favour.
Owing to the inability to manage their own business (techically HBOS and Lloyds were insolvent but for the Government rescue), the Lloyds TSB Group now owe the the UK Government so much money that they are under pressure to continue to sell any old toot – regarless of how appropriate it is to the consumer – you and me.
LET BUYERS BEWARE!
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