So farewell then, the Woolwich. Just nine years after the building society demutualised, Barclays, which bought the company in 2000, has pretty much decided to dump the name. It will still sell Woolwich-branded mortgages, but almost 400 Woolwich branches are to be turned into Barclays banks.
How did it come to this? There was a time when customers of the building society were happy to appear in its adverts, proudly declaring, "We're with the Woolwich." But the lender's business has taken a turn for the worse: in February, Barclays admitted that Woolwich, once the country's third biggest home loan provider, sold fewer mortgages last year than in the previous 12 months, despite a 10 per cent expansion in the total market.
Analysts say Barclays has failed to integrate Woolwich properly and that it should not have pulled out of the buy-to-let mortgage market. But I think the real reason for Woolwich's demise is a little more obvious. Under the Barclays umbrella, it has become a mortgage lender with pretty cruddy mortgages.
It's not just that Woolwich's rates have rarely made the best buy tables, or that it didn't drop higher lending charges until last year. A more fundamental issue is that mortgage brokers have been complaining about its levels of service for years. Since these intermediaries control two-thirds of the mortgage market, their reluctance to recommend Woolwich has been disastrous.
Then there's the issue of mutuality. The "with the Woolwich" feeling was an important part of the lender's appeal in the building society days. But once Woolwich disappeared into the Barclays corporate machine, this feelgood factor evaporated.
Compare Woolwich to, say, Nationwide, which has consistently grown its market share over the past 10 years. The rates on offer at Britain's biggest building society have rarely been in the best buy tables either, but customers' perception is that this is an organisation with values, rather than an exploitative money-making machine.
All in all, it's been another embarrassing week for the big banks. While Barclays was admitting to the Woolwich disaster, HSBC was trying to reassure customers that their money was safe, despite the arrest of a call centre worker who has allegedly been hacking into UK account holders' files and selling the details on.
Then there's the high-profile campaign Halifax launched on Monday for its new current account, which pays 5 per cent interest on credit balances. As Howard, the bank's advertising star gleefully points out, this is 50 times the money on offer from Barclays, HSBC and NatWest. (The deal at Lloyds TSB is better, though the black horse is hardly immune from the negative sentiment that surrounds the Big Four.)
Slowly but surely, the dominance of Britain's biggest banks is slipping. It may have taken customers years to realise they are not getting a good deal, but we are finally getting somewhere.
With the Woolwich? Not for much longer you won't be. With a Big Four bank? Not if you have any sense.
n n n Why are credit card companies still getting away with the great credit card cheque rip-off? Research from price comparison service Uswitch suggests that at least a third of borrowers do not realise there are additional charges for using these cheques.
Those charges are horrific - 2 per cent of the value of the cheque you write is typical, plus interest that starts accruing the second you pay. Uswitch reckons lenders make £443m a year on this sneaky sideline.
There's a simple way to stop this racket. Almost all credit card cheques are sent out whether or not borrowers request them. If we banned unsolicited cheques, at least only those who have actively sought out this service would be at risk of being ripped off.Reuse content