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; request a free guide on NISAs from Hargreaves Lansdown
- 1 Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 Israel's propaganda machine is finally starting to misfire
- 4 Zayn Malik on Israel-Gaza: One Direction singer bombarded with Twitter death threats after posting #FreePalestine
- 5 'Hello mum, this is going to be hard for you to read ...'
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
Day In a Page
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
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