Ö÷²¥´óÐã

I beat the banks by not needing their services or credit facilities. I stay in credit and pay my bills in full. However, to support the Panorama question about banks ripping us off, I asked at my branch of Lloyds TSB today, where I have a small pocket money savings account, could I have my withdrawal in cheque form. I was asked if I had a TSB current account and when I answered NO, I was told to have my withdrawal as a cheque would cost me £20. £20.00. TWENTY POUNDS. If thats not a RIP OFF nothing is.

I call for Governmental Intervention in regards to the Unfair practice of excessive bank charges and disproportionate overdraft rates.

As will be highlighted in Panorama's documentary tonight on Ö÷²¥´óÐã these rates are - extortionate.

This is anti-competiive behaviour and breaches the Competition Act 1998 section 18 Abuse of Dominant Position, and the Enterprise Act 2002 section 188 Cartel Offence.

The British Bankers Association by use of "The Lending Code" which is a private agreement between banks have used this document to allow banks in the United Kingdom to abuse their dominant position, and this agreement is therefore a Cartel agreement to allow UK banks to "rip-off" their customers.

The British Bankers Association have today released a press announcement prior to the airing of Panaroma's documentary "How to beat the banks" - defending their practices that are outlined in the private agreement between the banks called "The Lending Code".

I call for an immediate investigation by the Office of Fair Trading into this Cartel activity, and call that the Treasury orders the Financial Services Authority (FSA) to instigate a "Consumer Redress Scheme" under the Financial Services Act 2010 so that consumers can be compensated.

This programme is a waste of 30 minutes. The banks behave badly because WE allow them to do this nonsense. If we all refused to pay extortionate fees, ridiculous hikes in charges for Banking "Charges" then maybe they would think twice about doing this type of thing. We need to realize that the banks need us more than we need them. We bailed them out not the other way around maybe we should have let them fall by the wayside so to speak.....

The 3,500% overdraft example is itself misleading. Rather ridiculous to ridicule the banks when you yourself are picking a stupid hypothetical example to make a point.

I just want to point out HSBC and Barclays did not take any tax payers money unlike some of the other high street banks.

Also some people abuse the banks by spending more than they have in the account causing an overdraft that they then get charged for and I think this is correct. These people are in effect stealing from the banks.

What has happened to Panorama? This used to be an intelligent programme: now, taking the 'banking reform' programme as an example, this is remedial television for the intellectually subnormal. At best it should be shown on daytime tv but the silly props, the stupid smiles and the daft sets are disgustingly patronising. Does the Ö÷²¥´óÐã really think anyone turning into a 'current affairs' programme at 8.30 in the evening needs primary school level rubbish like this?
The public may not understand debt or banking but talking down like this just makes it childish. I suffered 15 minutes hoping the idiocy filter would be lifted - I would like an intelligent investigation of banking reform - and it would come up to something remotely resembling average intelligence. it never did. Never again. This is the best advertisement I have yet seen for something I did previously not support: licence fee cuts: cut Panorama!
John Craven's newsround was more intellectualy demanding. Seriously!!! And more use.

I have my personal and business accounts with Barclays, due to recent cash flow issues the personal and business accounts went £0.22p and £1.91 into buffer zone (a £500 additional overdraft effectively). The charge for this on both accounts was £22, even though I cleared back safely within overdraft within 24 hours. Unsurprisingly Barclays have no interest in correspondence on the subject and I have not received any credit. Their attitude is you've signed an agreement to pay this charge. Irrespective this is just daylight robbery and equals way above 000s%. Naturally when cashflow allows (later this month thanks to a good month so far) I will be seriously looking at moving my accounts to a more understanding bank - after 30 years with them!!!!

Personally the banks have treated me well. A 10% deposit as a first time buyer, with a fixed interest rate which is not historically high.
I have an agreed overdraft of £1600 with 0% interest, which I am in by a few hundred pounds every month. I would see myself as a typical graduate on an average sallery. Once the bank questioned my overdraft, but I was not in the mood to negotiate and so it remains. I give all 3 banks I have dealt with 10/10. Personally its the new coalition which is squeezing my purse.

@ Simon you obviously a logical and intelligent man and what you have written is a very logical and intelligent solution to a very stupid problem but the banks will continue to have their wicked way with us because Government isn't going to intervene because the whole system is corrupt the banks are not concerned with customers there are only concerned with Shareholders, Stakeholders and major investors......

I am one person who has been over charged by Halifax, I was over drawn by less then £100 and didn't use the account, by the time i realised the fees had changed my overdraft had more than doubled. I complained to Halifax and the Financial Ombudsman and got nowhere. I have to be satisfied with closing my account and hating Halifax...

having been in business for 30 years then hit the brick wall that most people did all our bank would do was to shut our bank accounts, no overdraft and as for being able to swapt accounts what rubbish, find a bank who will open an account for you, almost impossible. as for interest rates, we have been ofered 39.3 percent, great. not bad for people who have paid their taxes and everything for the past 30 years to bail out banks and then been completly ignored as a customer. the banks are a joke and we are only talking about £5000. not millions.

Has anyone looked into the unauthorised overdraft rate for Yorkshire Bank it is £25 per day. I made the mistake of thinking some money I was owed had cleared and discovered to my cost it had not. A very expensive mistake on my part. Customers beware...

Oh dear Panorama, nearly a good programme, but you failed to make one easy leap of imagination / logic. HOUSE PRICES ARE TOO HIGH! After a 12 year period between 1995 and 2007 when prices rose by 250 to 300% due to lax lending, liar loans, IO mortgages and low(ish) interest rates, the explosion of BTL lending as well as agressive lending by under regulated banks.

Why can the Ö÷²¥´óÐã not admit that prices have bubbled and are totally over priced? Can you not work out that high house prices is bad for UK competitiveness in the global economy. Lower housing costs would lead to pay restraint and sucessful businesses. When the new Govt says it will only pay £400 per week maximum to a family on housing benefit, does that not suggest something is out of kilter?

You had an opportunity to really grasp the nettle tonight, but you blew it again!

Adam Shaw said that people should change banks, only a small percentage do so we are to blame, partially. The problem is that if your credit rating has been affected over the last few years, then you will not be able to get a current account or if you can, you will have to pay higher rates because you will be seen a s a "risk". lets be honest, there is nothing we can do as the banks always have the upper hand. The levy that has been put on the banks is a farce, because we the customer will end up paying for it in one form or another. I think that they should start paying the "loans" back, if I went to a bank and said that I can not pay my loan because I don't think it would be benificial in the current economic climate do you think that they would "yes"?......exactly!!

This program was ridiculous.
The Halifax overdraft charging of £1 per day does exactly what they say. It makes things transparent. To extrapolate this on a £10 notional overdraft for 12 months is to completely miss represent the situation. Why didn't you decide to work it out from a £1 overdraft?
Since I have an overdraft limit of £5000 it seems like pretty cheap financing to me. The point is however that customers should avoid going into overdraft. It is unsecured lending. Why do people expect the bank to provide them with cheap money, no questions asked? The mere fact that a customer is in overdraft means that they are a poor credit risk.
Put it this way, if a someone who is already in debt came and asked you personally for another £500 or £1000 pounds, would you give it to them? Why should the bank?
To then have a go at the banks for not lending 95% LTV to the man looking to buy his first home just added to the lack of reality around your program.
Q Why are the banks on their knees? A Lending to property.
If the bank lends out 95% and property prices fall 5.1% then the borrower is in negative equity. Another leg lower in prices looks extremely likely in the next year or two. Why would the bank want to lend on such a paper thin margin of equity. They are doing the chap a favour, though he obviously doesn't see it.

All you did in this programme is confirm that we should not have supported the banks and Brown etc were wrong. We should have let them collapse. Had we let them fail we would have removed the arrogant greedy bankers. We would have suffered but we are doing that anyway and they have still used their moral blackmail to keep their jobs and their power. My final comment, which is not related to the programme but does fundamentally relate to the financial crash, is that we are at a crossroads. Either we have multinational countries that can carry the same power as the multinational companies or we contain companies to fit within countries.

If £1 interest on £1 per annum is 100% interest per annum, then £10 interest would be 1000% per annum, £100 pounds interest would be 10000% & it would follow that £365 interest on £1 over a year as simple interest would be equal to 36500% not 3650% as stated on Panorama. If I am incorrect or mis-understood the programmes fact base I appologise.

The Government as a major shareholder, stakeholder, and investor can use intermediaries to short the banking stock as it announces it's going to pursue the banks legally for this Unfair and illegal practice.

That way the Government make a load of money in the stock market, shake out those banks and investors that are too deep in debt to climb out, can fine the banks, and levy future taxation for decades to come.

A quick way to deal with the defecit really and bring an end to this financial crisis.

I agree with littleheathen's comment (post number 7 on this thread). The programme was facile and dumb. Some of us are over 18, don't have attention deficit disorder, and we don't need constant music, dumb graphics and comedy routines to explain some extremely serious points that are relevant to nearly all of us.

What the hell has happened to the Ö÷²¥´óÐã? Where are the producers who acknowledge that viewers - or at least, some viewers - don't need this patronising attitude to explain complex issues? This isn't E4 or MTV. It's Ö÷²¥´óÐã1, and we expect a damn sight better.

A lot of this program is simply misleading and not rounded journalism. Panarama your professional standards are poor. e.g. The 10 pounds a day overdraft for 365 days creating 3500% interest does not happen in real life. It is just a sound bite to make bankers look unecessairly greedy. Another quote that bankers are probably paying 0.5% for their overdraft money - another misleading statement as a bank cost of funds is currently much higher than this. The 1 pound a day benefits those customers who borrow larger sums on there overdraft yet this fact was not mentioned.

Ö÷²¥´óÐã please present a more balanced picture of the current crises. Yes there are problems. e.g. How do the banks lend when many of them are short of capital and the new rules from the government and beyond alonside the new liquidity rules are only getting more intensive. Also the rates are not going to come down anytime soon as they are more reflective of the risk involved and the previous rates were frankly too low and unsustainble (as history tells us).

I made a comment earlier which was critical of the show for not addressing the issue of over inflated house prices. It did not get past your moderation process. What do you have to hide? Do you not welcome different points of view? It was a massive bubble of epic proportions, and now it has to deflate.
The rest of the main stream media is getting to grips with the likelihood of falling house prices. Why can the Ö÷²¥´óÐã not get real?

John Slade After seeing the attitude of the Banks on Panorama tonight of which have taken One Trillion Pounds of Taxpayers money to support them.I believe that their customers should show same attitude and threaten to take their money out of the Banks.We should have allowed them to go Bankrupt and used the Trillion Pounds for their ordinary Account holders to be paid back. Let us see some People Power

Panorama - "now programmes made by thick people for thick people"
A fantastic opportunity missed by Panorama to tackle the serious structural issues in the UK economy and its day to day impact on small businesses and consumers via the financial services industry. Instead this programme has dumbed down a number of genuine questions/issues via the use of cringe-worthy gimmics 'The Hammer of Rage' & 'The Shaw bank', and avoided asking some critical questions to the likes of Lloyds,RBS and Vince Cable.
So where do I start with this poor excuse for 'journalism'?
Some basic questions:
1)Why are the 2 'vox pops' who are interviewed to any extent (a) A Reverend and (b) a first time buyer in a council house with 4 (yes 4!) kids?
While their views are entirely valid I am fairly certain a representative sample of overdraft users would yield more non-reverends than reverends and most first time buyers would have less than 4 children. Panorama has seeked manipulate the two situations by featuring a good vs bad scenario on overdrafts and an absolute worst case scenario on mortgages. Why would any bank want to lend to a man with 4-5 dependents, who only has a 5% deposit and is searching at the bottom end of the market? He is clearly a high risk to lend to because of his situation - would you lend your money to him? I would suggest the graduate market/young professional market shows the real challenges of the first time buyer - these are the customers whose risk of default justifies a bit more flexibility in lending standards Really crass journalism by the programme.
2. The Halifax tariff of £1 per day - why does Panorama not state there has been a phased launch of this product? Initially launched in 2008 to a small base, Halifax received good feedback - and so launched fully in 2009 - and there were many complaints. The point I'm making is this is an old story - Watchdog covered the 3,650% EAR in 2009. Point not withstanding - if you don't like the Halifax overdraft price then switch banks or don't borrow...its your decision as a consumer - just as it is your choice to shop in Co-Op rather than Waitrose, or M&S vs Harrods etc. As one savvy poster pointed out, if your borrowing £5k - £10k on your overdraft, £1-2 per day is amazingly cheap as a cost of borrowing - so a fixed price can work both ways.
3. Why do Panorama or other journalists never look at the main reasons for overdraft pricing/credit card pricing at c19%?
By this I mean something called BAD DEBT. You would think in the UK financial services journalism bad debt does not exists and that every UK consumer is a saint. I can tell you from personal experience that the insolvency/bankruptcy laws in the UK are generous to say the least - an acquaintance of mine borrowed £15k on credit cards and overdrafts to fund his failing business. He declared bankrupt, discharged within a year and has never paid any money back. In the UAE you go to jail and if your foreign your passport is confiscated until the loans are repaid.
Banks will price lending products roughly as follows - funding cost + risk premium + profit margin = price. I agree banks will maximise profits where they can - any good business seeks to maximise its return and GSCE economics students could tell you this. A pertinent question to ask would have been around the chronic long term underperformance of savings, investment & pension products as ultimately these will decide the quality of your life in the future.
The idea Panorama have made a programme focusing on a £1 per day overdraft charge when there are literally 10's of £bns sitting in 'savings accounts' earning 0.1% interest, competely misses where the scrutiny in the banking industry should be.
4. Why is Panorama asking for banks to disclose profit margins on products?
Do Tesco's disclosed the margin on a pint of milk? Does Rolls Royce disclose the margin on the latest model?
Actually to a certain extent YES - and they are called company annual reports. If you bother to read and investigate (a bit like a GOOD journalist would) then you can pick up rough margins from company accounts. However no company will disclose all information on profitability because of commercial sensitivities - it could be used against them by competitors. The programme should have focused on lack of transparency in charges IF there are issues with hidden charges - as in the first time buyer example if you sign a contract stating you'll pay a fee of £xxx for a valuation, then you cannot complain when this fee is taken, whether or not you like the end result because your paying for the valuation not getting a value of the property your happy with.
5. Why is there no mentioned of why people go into unarranged overdrafts and incur charges?
As someone who manages my money properly avoids going overdrawn, my sympathy is limited for those flagrantly live beyond their means and get caught out - though I am sympathetic to genuine cases of hardship. Why could Panorama focus on how to avoid going overdrawn if the cost is such a big deal?
6. Why is their no mention of why the UK has the ONLY free banking system in the world and no debate on how this is funded?
Banks need to fund branches, systems, back office centres etc, and yet do not take revenue from the transactions which cause alot of these costs e.g. online payments, cheques, branch transactions. Surely Panorama's focus should have been on why are overdraft users still subsidising the banking system for everyone, though this time it is arranged overdraft users (i.e. the HBoS £1 per day people) not the Unarranged users (the £20 per day people)funding it? Surely a more concise debate....
7. Note to the 'Intellectual Property Lawyer' - if you were so 'Intellectual' you would realise a bank saying go borrow from your friends and family is a nice way of saying they think your a risk and don't want to throw good money after bad.
I've run small businesses before and borrowed from family, and know a number of businesses funded by local shareholder capital. It is an absolutely valid form of financing with pro & cons like any other bank & non-bank financing.
Panorama - in summary you would have been better off putting Vince Cable, Stephen Hester and Eric Daniels on Jeremy Kyle to duke it out than bothering with the rubbish you've made.
HDW

Did anyone else notice that Adam Shaw ran a red light at the start of the program?

Dear Sir/Madame,

Re - Panorama program to-night.

Why oh Why! do the banks still get way - with screwing the public.

I work in sales - and get rewarded for producing PROFIT !!!!!

HOW do the banks/employee's get bonuses ------ FOR losing millions of
pounds !

How can this still be happening ?

What are the M.P'S DOING ABOUT THE BANK SITUATION.

I WOULD LOVE TO FACE - BANKERS - and ask them how they feel that they
can STILL justify vast amounts of bonuses.

Alf ALLEN ( Devon )

I've just started working for a financial claims company [Unsuitable/Broken URL removed by Moderator] last month. Some of the stories I've heard already are incredible and what surprised me about last night's Panarama story is that it only really scratched the surface at what the backs are really up to and in some respects ignored the wider issue.

For example I'm surprised PPI wasn't mentioned. A £13 billion a year industry in which the banks are deliberately and willfully ripping of customers, something which overshadows the overdraft fees debate.

Which and the Guardian have been fighting the banks on PPI and should be commended, in the last couple of weeks other Newspapers have been jumping on the bandwagon so to speak but in general the public are still completely unaware of what's been happening to them.

Hearing language like 'Ripping us off' from people like Vince Cable isn't knew either. The FOS, which regulate the banks have been talking about them 'conning us' and the need for the banks to regulate themselves.

What I want to know is if the Goverment are so interested in this whole thing and actually want to do something constructuve why do they not firstly bring in legislation to stop this happening and then provide appropriate penalties. When the Banks are making millions out of us a fine by the FOS of a fraction means the banks are laughing, well... all the way to the bank and it's still us consumers that suffer.

An overdraft is not a loan. You agree loans in advance and they are usually secured. An overdraft is when you take money that you don't have and spend it. In most other scenarios that would be considered theft. If everyone started taking more from their accounts than they had in, without agreeing terms with the bank first, then the banks would cease to function. Moral of the story is don't spend more than you have and don't whinge about it if you do. 3500% seems more than reasonable to me.

An overdraft is a loan of money whether authorized or not. The material fact is that bank's permit accounts to go overdrawn so that they can levy charges and interest. The banks can decline payments due to insufficient funds but in most circustances refuse to do so. Why? The answer is profit. However this is argued away by the banks as "free in credit" (bank account). If i were to lend you 1000 pounds at 3500% interest when base rate is 0.5%, and current inflation is running at 3.2% - then who is stealing from whom? We have laws to stop private people like me from lending to individuals like you. Why therefore are the banks getting away with it? And why is it that the Government is not intervening? That is what Panorama should be reporting.

The big bank cover-up is the secrecy surrounding savings interest rates.

For example, last year my interest on one of my Santander accounts fell from £350 to £10. On all our capital savings accounts (money set aside to help out our old age pension) we have seen an income drop of about 90%.

Why cant banks simply have a link in the account window that tells us exactly what we are being paid in interest. We know the answer to that. They simply do not want us to look too closely. That is why we have to rummage around on bank web pages tyo find out what is going on.

When I pointed this out at my Santander branch, I was told that it is the same for everyone. That made me feel a lot better, having lost a sizeable wallop of our income.

The good news is, now I can get up to 2.75% whilst the poor souls who have to borrow must pay at least 17%.

I will have to be very careful, because in a year's time this princely 2.75 pa interest will mysteriously plummet to under 0.5%. (That's par for the course). Billy Bunter Banker will not divulge this because:-
1 It will be the same for every saver
2 He'll probably be busy stuffing his pockets and having a laugh at our expense

I can always change my bank, can't I? Well, my wife and I have accounts in several banks. What do you know? They are all at it as far as I can tell, hooking us into products that are set to deceive.

Now I've got that off my chest, I think I'll have a lie down.

Ken

I would have thought that the economist who featured calculating the interest charge for £1 per day to maintain a £10 overdraft for a year could at least have got this rather simplistic calculation correct. The figure should be 3550%, not 3650%. She overstated it by forgetting to subtract 1 from 365/10 before multiplying by 100. This method would show a 10% flat rate as 110%! Perhaps the world economy is in such a mess through such basic arithmetic errors by economists?

The APR, or Annual Percentage Rate of Charge, is the rate which must appear in regulated credit agreements in the UK. A 10% flat rate for a loan over 12 months, for example, is about 19.5 % APR. A 1% per month rate (at one time the cap on Credit Union loans), equates to 12.68% APR. However, by the same equation, the 10% per day rate equates to an APR of 1.283 x 10 ^ 17, or more than 128 million billion % (in the now more common US terminology).

APRs become meaningless in such extreme examples. Probably more realistic would be a £1000 overdraft at £1 per day over a year - APR 44%.

Why would some one take a £10 overdraft for 365 days?

To GD, JD, royeve and the like - your calculations are incorrect. Do it the way the banks do for comparison.

The £1 fee does not kick in until an arranged overdraft is over £10. And the amount in equivalent simple interest terms do amount to in excess of 3,500%. The arithmetic is not wrong! The calculation for longer term can be less simply with compounding, day-count and jurisdiction conventions coming in.

Banks make money calculated that can be simplified to a similar basis. When they have a positive net amount of cash, they invest it in the money markets on a short term basis and earn interest too. If arranged overdrafts are set up, they put this potential draw on money out on very short notice - overnight. However, for unarranged overdrafts they may heve to either call back the money invested on a longer term as determined by the cash flow forecasts (out up to 30 days, if done prudently) hence there is a cost.

The arranged overdraft may result in the banks facing a cost if there is a timing difference as to when it is realised. They then do face an extra charge that they pass on but it is nowhere near 17% and definitely not 3,500%.

The money that is in current and deposit accounts sit in something called Tier 1 capital. As this money does very little if it were not used, the banks use it to lend thus facillitating commerce. The banks do step in to take and re-distribute risk of other businesses. Most of the time, there is no run on the banks so they need to keep a pool of money for daily use demanded by customers but the rest may used over and over again sveral times simultaneuosly with little risk but earning more. A lot of this goes to ijncreasing the share price which then increases pension funds enabling them to pay-out. This pay-out needs to keep up with inflation and erspecially final salary pensions.

Banks are regulated domestically and internationally and have to keep aside capital in relation to the money they use or lend. If they lent to the safest, say the Government, they would still have to keep a pot. This pot requires more as they engage in riskier lending. After the credit crunch, the initial pot required to be held has increased and the additional amount per unit of risk taken has also increased. The riskier the loan the greater the additional amount required to be placed in the pot. The rules provided by the regulators state that lending to samall businesses fall into one of the riskiest categories and therefore more has to be placed in the pot. Thus more has to be generated to reflect the amount placed in the pot and so these loans become higher. The regulators increased the additional amounts after the credit crunch and raised the lending risk requirements. All these not only restrict the amounts lent to small businesses but also increase the interest rate at which they are lent.

Now the government is introducing a bank levy and this can be passed onto the customer in the form of higher rates and lower savings returns. Now the profits made by the banks increase the share price which in turn increase the amount in the pension kitty.

Now the FSA has made the granting of mortgages more stringent. This means that not only will less mortgages be awarded but also that the mortgages rates will increase.

Adam Shaw's programme was indeed to breakfast TV/leisure magazine-like and touched the latter of this comment very briefly when it was addressed in terms that were not simple to the layman aand also quickly in the answer by Vince Cable.

Mr. Shaw engaged economists for the programme. Perhaps he could have used them or the Ö÷²¥´óÐã resource in the form of Dr Evan Davies (Phd Economics, who worked with Prof. John Kay at the London Business School)and the SG Hambros personnel to make a more in-depth programme. Failing this he could contact me.

To mseven1 who wrote: Why would some one take a £10 overdraft for 365 days?

They would not but it could be have 10 separate days where overdraft occurred. In any case, it ia valid for calculation purposes as it mirrors the equivalent calculation done by the banks in quoting simple interest.

I find the general lack of basic knowledge quite frightening; in that although not necessarily directly included in school math's as "How to calculate interest rates", the technique is taught but it has to be recognised where it should be applied, which requires a bit of common sense. However, it can easily be obtained by asking your bank or accessing wikipedia.

Having looked at the economist section again, I stand corrected on her calculation of simple interest. I realise she was quoting the interest paid over 365 days, not including the £10 principal.
However, my astronomical calculated APR is correct for the quoted (admittedly unrealistic)example. You put the numbers into the equation and out pops the answer. Since the APR is demonstrably correct for the everyday examples I quoted, it must be correct for the panorama example.

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