BBC NEWS | Business | Big banks accused of 'cynicism'
The UK's High Street banks have been accused of "bare-faced cynicism" by an influential committee of MPs.
In often heated exchanges, members of the Treasury Select Committee challenged the chief executives of Barclays, HBOS, Royal Bank of Scotland and Lloyds TSB about how they treat credit card customers.
The focus was on the interest rates charged on credit cards.
And one member of the committee described the marketing tactics employed in attracting new card business as "a bait and a trap".
This is both a cycnical and optimist posting. Firstly the Cynical bit:
UK banks since the mid 1980's when the muzzles got taken off have been marketing credit and particularly (the very profitable to them) credit cards. This has become a very competitive market with so many providers out there, and yet the interest rates charged (as the MPs noted) are still extremely high in comparison to the Bank of England base rate. People are baited and trapped to quote the committee.
Financial Services and in particular high street banks need very seriously to consider their position. ethically, morally they appear bankrupt and seem to do little in the way of being a part of or understand their communities despite the brand image of some like HSBC attempting to show us it knows local custom worldwide or Abbey National rebranding to Abbey (and their faintly ridiculous giant lilo) or First Direct having genuine (really?) people say how wonderful their service is or Samuel L Jackson potificating on... actually what is he going on about? Anyway it comes to a parasitic relationship with you (and me) the consumer, where they extract the value and give little back in return.
So who do I bank with? Smile part of the Co-operative Bank. Are they perfect, well no but I do trust them when it comes to their committment in ethical investment and they genuinely do have better rates than the majoirty of competitors but its the 'trust' element and the willingness to engage customers that most attracts me to the brand. However even they could go further and be more open with customers. I know their credit card rate is competitive but whenever interest rates are lowered, the rate never follows.
On the optimistic side this shows a group of MPs, cross party, within a parliamentary context of a Select Committee making some extremely sound points on behalf of their constituents and the consumer as a whole. Some of it no doubt is posturing, as thats what politicans do, but they were also trying to scrutinise and that my friends is their 'real' job which they often forget. I would dearly like to see more of this scrutiny, with constructive criticism and with a bit of luck some real action taken on their findings. Making such reports compulsory to business on the floor of the House (Parliament) or forcing the Government to respond would help.
Professor the Lord Norton of Louth would be proud - some of his lecturing did sink in :)
Posted by Paul Goodison at October 16, 2003 10:18 PM | TrackBack