Scrap cash point limits, banks told

RBS atmTwo banks partly owned by the state have been urged by MPs to drop restrictions on customers with basic bank accounts using cash machines run by other banks or third parties.

The Commons Treasury Committee said the rules imposed by RBS and Lloyds TSB, both of which needed a taxpayer bailout following the 2008 banking crisis, risked compromising the cash machine network.
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The MPs said the impact of the rules could hit the poorest hardest, for potentially only a small financial gain for the banks.

Barclays, HSBC and Santander - which is due to takeover RBS branches in England and Wales following the 2008 bailout - were praised by the committee for providing basic bank account holders with unrestricted access to cash machines operated by third parties.
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Tory MP Andrew Tyrie, who chairs the committee, said: "Restricting access to cash machines could compromise the network. In certain areas, more than a third of ATMs could be placed at risk if other providers of basic bank accounts were to take similar action or to remove themselves from the LINK system.

"The Committee understands the need for banks to control costs, particularly in these difficult times. In this instance, the financial benefits to Lloyds and RBS appear relatively small but those affected would be amongst the most vulnerable people in society."

Mr Tyrie said he acknowledged in the longer term both the services offered to banking customers and the charges they paid would need to be reformed. The Treasury Committee is to write to other bank account providers to confirm their stance on allowing customers to use cash machines operated by other banks or third parties.

Basic bank accounts are available to those who may not meet banks' minimum criteria to open a personal current account owing to a poor credit score or no credit history. RBS, and its sister bank NatWest, phased in the restrictions on basic bank accounts in November 2011. Lloyds TSB has applied similar rules on basic bank accounts opened since September 2011.

A Lloyds TSB spokeswoman said: "Lloyds TSB basic bank account customers are able to withdraw money from all Lloyds Banking Group cashpoints including Halifax and Bank of Scotland machines. This gives them access to over 6,500 cashpoints. In addition, customers can also use over 12,000 Post Offices nationwide, which means that almost all of our basic bank customers are able to access their money within one mile of where they are based."

"The fact that we opened over 100,000 new basic bank accounts last year shows that customers really value the range of services that we provide. We remain fully committed to providing a range of basic bank accounts to suit our different customer needs."

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Scrap cash point limits, banks told

More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.

The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!

(Pictured: Martin Lewis after the PPI payout ruling)

Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.

Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.

While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.

You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.

Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.

A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!

While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.

Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.

If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.

The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.

Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.

In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.

"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."

The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.

When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.

When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.

Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!

The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.

About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.

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