David Prosser: Actions speak louder for GE Money
Saturday 03 February 2007
Can a leopard change its spots? GE Money, the UK financial services company owned by the giant US conglomerate General Electric, would like you to think so. For years, the company kept a low profile, but when it did make the headlines, it was almost always as the provider of hugely expensive store cards.
Then two years ago, GE Money decided it wanted a more direct relationship with British consumers, and its PR chiefs realised a more positive image was needed. The company went through a rebranding exercise and introduced consumer-friendly initiatives, such as a financial education website. It also launched a range of credit cards and personal loans, which have consistently been priced competitively.
So far, so good. But this week, the Financial Services Authority (FSA), the UK's chief City regulator, announced it was fining GE Capital Bank, the company's store card operation, more than £600,000. The FSA said GE had failed to ensure it had proper controls for the selling of insurance, and that it had failed to treat customers fairly.
At the heart of the case is the tawdry business of payment protection insurance (PPI). The FSA is now conducting a long-overdue investigation of how lenders have been increasing their profits through the sale of PPI alongside credit cards, store cards and loans. All too often, the insurance turns out to be vastly more expensive than similar cover on offer from independent sources, or, in the worst cases, completely unsuitable.
Just to be clear, the FSA is not saying GE has mis-sold PPI. The fine reflects the fact that after GE was warned, in early 2005, that its sales practices did not comply with industry rules, it failed to improve its sales controls and staff training. GE also failed to contact customers who had previously been let down.
This isn't a minor case. "At any one time, approximately 300,000 retail assistants employed by [retailers'] stores are permitted to sell insurance on behalf of GE," the FSA points out. "In 2005 alone, over 850,000 policies which included PPI were sold on its behalf."
GE also seems to accept it was caught red-handed. It agreed to settle the case with the FSA at an early stage (and received a 30 per cent discount off what the fine could have been).
I must confess to a personal prejudice against GE. Several years ago, after a close relative moved house and forgot to pay a store card bill - for less than £100 - GE engaged a debt collection agency to track her down. The agency caused huge upset, plagued her with anonymous phone calls and even sent her postcards purporting to be from a long-lost friend.
My personal animosity aside, however, this PPI fine teaches us an important lesson about companies such as GE. Their PR departments may talk a good game - and marketing departments can work wonders with new brands - but actions speak louder than words.
* Finally, energy companies are beginning to talk about lowering their prices. In addition to nPower (Deals of the week, page 6), Scottish & Southern has now promised to cut bills, though it hasn't said by how much and when. British Gas has also been talking about lower prices from April.
These cuts are long overdue. Energy providers blame the high cost of wholesale gas for higher bills, along with the fact they must buy in supplies six months or so in advance. But wholesale gas prices have been falling for more than a year now. And it's no coincidence that many of these companies have racked up huge profits.
You can punish this behaviour. Vote with your feet by switching to cheaper deals as often as possible.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israel hide facts
- 4 Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
- 5 Danish TV reporter is all business up top, all party down below
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...
Day In a Page
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000