Simon Read: It's been a year to forget for banks, but we shouldn't forget – or forgive

 

Claims chasing companies are confident they've found a new mis-selling scandal to bash the banks with. This time it's expensive packaged accounts that include often dubious insurances.

Last week the Financial Services Authority published new guidelines designed to clean up poor sales practices of the accounts.

The new rules mean that next year, more than 10 million people with paid-for current accounts will be sent a letter informing them whether or not they can actually use the benefits included.

This week Lloyds TSB and Bank of Scotland – the banking group which has most of the expensive current accounts – said it will suspend telephone and branch sales of packaged bank accounts next year.

Are the claims chasers right? If so, it will be just another black mark against the high street banks in 2012, in what has proved to be their worst year yet, in terms of reputation and treating customers unfairly.

The ethical website Blue & Green Tomorrow has – in conjunction with the campaigning group Move Your Money – rounded up just why the big banks have been bad this year.

It's a useful reminder, and should send a stark warning down Britain's banking halls that they must do better in 2013, or risk losing all of us as customers.

For instance, the site reports that it's been a bad year to be a Barclays' customer. Not only was the bank at the centre of the Libor rate-rigging scandal, for which it was fined £276m, but it also experienced a shareholder revolt at its AGM in April over boardroom pay, where 26.9 per cent rejected Barclays' executive remuneration package.

HSBC's poor 2012 centred on accusations of money-laundering. After an investigation by the US Senate, the bank was forced to pay £1.2bn in penalties for channelling money for Mexican drug barons and Iranian criminals – at the time the largest fine ever given to a bank.

Meanwhile Lloyds Banking Group, which owns Lloyds TSB, Halifax and the Bank of Scotland, revealed a half-year loss of £439m in July after being forced to increase the amount it had set aside to compensate customers mis-sold payment protection insurance by £700m to £4.27bn overall.

Royal Bank of Scotland is set to be slapped with the biggest Libor fine of all the UK high-street banks to date at £350m. It also received continued criticism during 2012 for its funding of energy-intensive Canadian tar sands operations. That's on top of a £1.5bn half-year loss and a PPI compensation pot so far totalling £1.7bn.

And what about NatWest? The bank's annus horribilis is dominated by its shocking IT meltdown over the summer, when up to 12 million people were unable to pay bills or withdraw money. The City watchdog later ruled that the bank had to refund and compensate affected customers.

Move Your Money claims that in 2012 more than half a million people in the UK have made the switch from high street banks to dedicated ethical alternatives.

Will that race for change accelerate next year? It really wouldn't surprise me. So what are the alternatives that people are choosing? We've written about most of them this year, but here's a reminder, courtesy of Blue & Green again.

There's Triodos Bank, which last year reported a 36 per cent growth in green lending and saw a 51 per cent increase in new account applications at the height of the Barclays scandal which saw so-called casino banker Bob Diamond lose his job.

Then there's Charity Bank, which uses your cash to lend to good causes. Since being launched a decade ago, it has issued 1,006 loans, worth £165m. Its loans are estimated to have improved the lives of some 3.5 million people across the UK.

Co-operative Bank, the closest thing to a high street bank that the alternative banking sector has, was named European sustainable bank of the year. It is set to take on an extra 4.8 million customers when it completes the takeover of 600 branches from Lloyds next year.

And then there's the Ecology Building Society, Reliance Bank – which was formerly the Salvation Army's bank – and Unity Trust Bank.

In short, you don't have to take the same old bad service and excuses from the traditional banks. If you're already thinking about possible new year's resolutions, switching to a more sustainable bank may not be a bad one to adopt.

s.read@independent.co.uk

Twitter: @simonnread

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Sport
sportGareth Bale, Carl Froch and Kelly Gallagher also in the mix for award
News
Japan's Suntory Beverage & Food has bought GlaxoSmithKline's Lucozade and Ribena
news
News
A tongue-eating louse (not the one Mr Poli found)
newsParasitic louse appeared inside unfilleted sea bass
Life and Style
The reindeer pen at the attraction
lifeLaurence Llewelyn-Bowen's 'Magical Journey' and other winter blunderlands
PROMOTED VIDEO
News
Tana Ramsay gave evidence in a legal action in which her husband, Gordon, is accusing her father, Christopher Hutcheson, of using a ghost writer machine to “forge” his signature
peopleTana Ramsay said alleged discovery was 'extremely distressing'
Arts and Entertainment
Robin Windsor and Aljaz Skorjanec rehearse their same-sex dance together on Strictly Come Dancing
TV
Money
Anyone over the age of 40 seeking a loan with a standard term of 25 years will be borrowing beyond a normal retirement age of 65, and is liable to find their options restricted
propertyAnd it's even worse if you're 40
Arts and Entertainment
Perhaps longest awaited is the adaptation of Jack Kerouac’s On the Road with Brazil’s Walter Salles directing and Sam Riley, Kristen Stewart and Viggo Mortensen as the Beat-era outsiders
books
Arts and Entertainment
theatreSinger to join cast of his Broadway show after The Last Ship flounders at the box office
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Argyll Scott International: Risk Assurance Manager

    Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...

    Argyll Scott International: Business Analyst - MGA - London Market - Insurance Broker

    £50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...

    Ashdown Group: PR, Marketing & Events Executive - Southwark, London - £35,000

    £30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...

    Selby Jennings: C++ Developer – Hedge Fund – New York

    $80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

    Day In a Page

    How bad do you have to be to lose a Home Office contract?

    How bad do you have to be to lose a Home Office contract?

    Serco given Yarl’s Wood immigration contract despite ‘vast failings’
    Green Party on the march in Bristol: From a lost deposit to victory

    From a lost deposit to victory

    Green Party on the march in Bristol
    Putting the grot right into Santa's grotto

    Winter blunderlands

    Putting the grot into grotto
    'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

    'It just came to us, why not do it naked?'

    London's first nude free runner captured in breathtaking images across capital
    In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

    Iran is shifting from pariah to possible future policeman of the Gulf

    Robert Fisk on our crisis with Iran
    The young are the new poor: A third of young people pushed into poverty

    The young are the new poor

    Sharp increase in the number of under-25s living in poverty
    Greens on the march: ‘We could be on the edge of something very big’

    Greens on the march

    ‘We could be on the edge of something very big’
    Revealed: the case against Bill Cosby - through the stories of his accusers

    Revealed: the case against Bill Cosby

    Through the stories of his accusers
    Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

    The Meaning of Mongol

    Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
    Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

    Kenyans still waiting for justice over Mau Mau uprising

    Thousands join class action over Britain's role in the emergency
    Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

    The last Christians in Iraq

    After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
    Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

    Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

    Britain braced for Black Friday
    Bill Cosby's persona goes from America's dad to date-rape drugs

    From America's dad to date-rape drugs

    Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
    Clare Balding: 'Women's sport is kicking off at last'

    Clare Balding: 'Women's sport is kicking off at last'

    As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'