Time for banks to serve their customers

Banks are holding on to their money once again. Interest rates were raised by the Bank of England last month and the banks increased their variable interest mortgage rates within minutes but we tens of millions of savers are still waiting for some improvement in our interest rates. Meanwhile credit card interest rates are at their highest since 1998 and overdraft rates are almost uniformly at 40%.

At the same time hundreds of thousands of leasehold flat owners are stranded unable to sell or re-mortgage because banks are too frightened to loan on properties that have cladding. The government has announced that it will make the builders and ground landlords pay for any repairs, but still the banks are silent as to whether they will now lend on these properties now that there is little or no risk.

With peer-to-peer lending in decline a wonderful solution to both problems could be for the High Street banks to offer saver to borrower loans that would allow us to collectively fund mortgages for flat owners. It would give savers better rates than the standard 0.1% for instant access and 0.5% for notice accounts and free flat owners to move on.

It could be very popular. Or the banks could stop blacklisting flats without certificates guaranteetring the quality of the external wall coverings of the properties when they know that there are not enough qualified engineers in the country to make the inspections.

Giving customers what they want could be a novelty for banks. I will not hold my breath though.

Getting ready to charge us more

The banks have started sending out letters. The first batch warned that credit card customers would have to pay more each month and in some cases that their credit limits were being reduced. Breach those and penalties have to be paid. Interest rates also average 24% even though bank base rates are still at 0.1%.

Meanwhile latest letters warn that agreed overdrafts are to be reduced often by £1,000 or more.

All this before the Bank of England has decided whether inflation currently 4.2% CPI and 6% RPI will be tamed by interest rate rises.

Having already withdrawn the cheapest fixed rate mortgages banks are getting ready to make even more money out of customers struggling with energy and fuel costs, rising food prices and council tax rises on the horizon.

Retail sales in the High Street are almost back to pre-pandemic levels. Perhaps they shouldn’t be as credit card spending and debt is rising. It looks like we are celebrating the end of the pandemic early and have learned little.

Just as we need to conserve heat in our homes we should conserve our money. The energy tariff cap is predicted to increase another £500 in April as the council tax bills need paying.

Don’t let banks put us in danger

When my bank left town I did not think too much about it as I use its Internet service. But now I realise it has put me and many others in danger. I need to transfer a large amount of money to a solicitor . Last time I did it the branch organised the process and charged £25.

Now with “Friday Fraud” a growing thing where thieves hack into accounts and send messages changing bank account details to people about to complete on properties or needing to pay a builder we need our banks to protect us.

Unfortunately that is not uppermost in their business processes. When I called my bank to ask how I could transfer a large sum I underwent a security check and was told I needed to record Voice ID and then was sent on a ten minute journey of bad music, messages about how busy it was, and warnings must be careful not become a victim of fraud.

When I finally got through to Jason at the call centre he told me I needed to speak to another department and transferred me to it….after another wait the next person could not talk to me because an 0800 number was displayed because I had been transferred and she could not therefore confirm my identity.

I will try again tomorrow and the next day. But in the meantime anyone paying money to a new person or company needs to make sure that they use the confirmation of payee system and get an exact match. If your bank does not offer this online then you need to telephone your bank to get the details checked. If your bank does not offer this protection it might be time to move your account to one that does and keep your fingers crossed they do not close your local branch.

You can also transfer £1 to the solicitor, builder or whoever and check that they receive it. Currently all the onus is on customers to stay safe with only TSB agreeing to pay all customers who are defrauded. Others tend to find that the customers were not diligent enough.

It is lucky that I was not trying to report fraud when I was sent on the merry-go-round of my bank’s call centre. The money would have been long gone by the time I got through to the second call handler, who could not deal with me.

Stay calm and shop

Empty shelves and Christmas shortages are worrying many shoppers as the supply chain crisis encompasses cleaning products, toys and chicken. It is not time to panic buy, but to plan ahead and settle for less. Shops have more to worry about than customers as container and delivery costs spiral, and their stock is delayed half way round the world, just as they were wanting to make up for the revenues they lost during lockdown. Shoppers have to be careful if they want to splash the cash with their contactless cards, which now have a limit per spend of £100. Keep them safe and if they are stolen or lost tell the bank/card company straight away and keep checking for “rogue” payments for months as thieves can keep on spending. But if you notice the payments you can get a refund.

Supply chain, energy costs and other crises

Lindsay Cook reviews the financial news for Connections Radio and warns of more dangers to come. We have to be careful out there. There is worse to come on energy costs, council tax and shortages.

Financial news from Connections Radio

Lindsay Cook’s regular weekly broadcast alerts listeners to the big financial stories and warns how to protect yourself.

Connections Radio for Money fight Club

Every week Lindsay Cook talks to Connections Radio about all things financial. This week she looks at the economy but also welcomes the Treasury Committee’s interest in the number of bank accounts being frozen without warning.