James Daley: Banking bargains? That'll be the day
Saturday 05 January 2008
This is set to be the year when the banks finally get their comeuppance in the British courts, as the Office of Fair Trading challenges the legality of their extortionate current-account charges.
To my mind, there's only one way this case can go. Given that the OFT has already told the banks that they can't charge more than 12 when people miss a payment on their credit card, there's no way the watchdog can now leave the door open for customers to be hit with charges of as high as 60 for accidentally busting their overdraft limit. The banks will rightly be reined in, and wronged consumers will once again be free to reclaim the excess fees that they have been landed with over the past few years.
Unfortunately, however, this process is sure to take many months to complete and, while a preliminary verdict is likely to be announced some time later this year, it may be 2009 or beyond before the case has made its way through the appeal courts and the House of Lords.
In the meantime, you can expect the foulest of foul play from most of the big high-street banks, who are currently all reeling at the hands of the credit crisis and are as desperate as ever to make a quick buck any way they can.
The banking sector's "January sales" are always a great illustration of just how low they will go. What started off as a relatively clever marketing ploy a few years ago, pioneered by HSBC, has now turned into the perfect excuse for anyone to dress up their uncompetitive products as a "bargain".
Check out NatWest's January "sale", for example, and you'll find that you can get a loan with a typical APR of 7.4 per cent almost a whole percentage point higher than the market-leading loan rate of 6.5 per cent (offered by Sainsbury's Bank).
Meanwhile, HSBC is boasting that it will donate 2 to the World Wildlife Fund if you sign up to any of the products in its "sale" this month. However, you'd be much better off shopping around for a better deal elsewhere be it on a loan, credit card or savings account and handing the difference over to WWF yourself. It'll come to a whole load more than two quid!
Although, as I've said before, I have some sympathy with the banks after all, they need to be allowed to make money like any other company it's their lack of transparency and insistence on using smoke and mirrors to trip up the consumer that is so frustrating.
Just before Christmas, I came across yet another astonishing example. When meeting with a company called Stonehaven, which offers equity release products, I asked them who they were owned by. I was told that, unfortunately, they weren't permitted to disclose that information, and also that they couldn't tell me why they couldn't tell me. Either way, they said, I should take comfort in the fact that they had the backing of a "major bank", and as a result they were very trustworthy.
Two minutes on the internet helped me to work out that the "major bank" in question was Abbey, which in turn is owned by Santander Central Hispano, the Spanish banking giant. So why on earth would they not want people to know?
The answer is, almost certainly, that equity release has had a bad name over the past few years, and while it is a lucrative business, Abbey and Santander probably don't want their brands directly associated with it in the UK.
If you make one resolution in 2008, it should be to keep your eyes open when you're buying financial products. Sadly, if you give the banks the chance to rip the shirt off your back, they'll probably take it.
Independent Partners: See how much you could save by switching credit cards. Compare now
Geoffrey Macnab does not like the comedian's big screen debut
Look beyond the usual shows for the best festive telly
The battle for control of Stieg Larsson's £30m legacy
- 1 Bonuses for goals and top four finish as Luiz Suarez joins Premier League's top three earners
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 3 #Teamnigella: It’s the only side to be on
- 4 Christmas comes early: Justin Bieber is 'retiring from music'
- 5 Burglar steals video tapes of child abuse, hands them into police
Exclusive: Young people ‘want UK to stay in Europe’: Four in 10 adults aged 18 to 24 are ‘firmly in favour’ of membership, poll shows
Tom Daley ‘is gay because his father died’ says UK evangelist
Iain Duncan Smith leaves Commons food banks debate early
Kiss and yell: Italian protester charged with sexual assault after kissing riot police officer
PM denies two child limit for benefits is part of Tory welfare policy
Anachronistic and iniquitous, grammar schools are a blot on the British education system
- < Previous
- Next >
iJobs Money & Business
£Negotiable: Citifocus: High calibre individual with institutional client serv...
£120000 - £150000 per annum: Cornwallis Elt : Programme Manager, Strategy Lead...
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...
Day In a Page
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.