Clean up your act . . . or else

 

One week into the new year and Money Mail is on the warpath. Our message to the financial services world is simple: 'We're sick to the back teeth of those who only pay lip service to the idea of treating their customers fairly - and we're coming to get you.'

We've identified 12 key areas where we believe banks, building societies, insurers and retailers are cocking a snook at the rules. They include abuse over savings rates, bank charges, pension sales and insurance small print.

In each instance, we believe that some financial groups are deliberately misleading their customers or relying on their lack of financial knowledge to give them a raw deal.

On savings rates, for example, we suggested to the Banking Code review that banks and building societies should give customers three to four weeks' warning of a bonus being removed because this is, effectively, a rate cut. Independent consultant Mike Young, who led the Banking Code review, made a recommendation along these lines but this was rejected by the big banks. The reason? Bonuses are designed to confuse savers and blind them to the abysmal rates being paid.

They are a simple way to draw in the unwary and allow rates to be cut without having to inform customers. For instance, Lloyds TSB has two internet accounts with the same name, which are closed to new customers and which were both boosted by a bonus when they were launched.

One version of Online Saver was closed to new savers on March 25, 2007. This paid a six-month bonus of 0.5pc. The second version covered accounts opened between March 26, 2007 and November 2007, and paid a 0.6pc bonus for 12 months.

Even more confusing, Lloyds TSB publishes the interest rates for the Online Saver with a six-month bonus on its website, despite the fact that savers could not possibly have earned the bonus since September 2007. Other abuses consistently crop up in our postbag, such as travel insurers turning down claims on the most spurious grounds.

We are also becoming increasingly concerned about penalty charges being levied on those who do not pay their bills by direct debit. While, for some, this is a lifestyle choice, it is a clear discrimination against those on low incomes who do not have a bank account or access to the internet - many of whom are elderly.

Hiding behind small print and relying on a lack of consumer knowledge is yet another example of treating customers unfairly. So where does this leave the credit card companies who attempt to trick customers into paying more interest by making their supposedly interest-free balance transfer deals as complex as possible?

Take, for example, First Direct. It is offering interest-free purchases for 12 months, but only if you make a balance transfer of at least £100 from another card (fee 2.5 pc) within two months of opening the account. Interest is charged on the transfer at 4.9 pc and you can't clear it until you have paid for all your purchases.

It's confusing and unnecessarily complicated - and by no means the worst offender. Similar nonsense pervades the financial industry - most of it dreamed up by marketing and product design gurus keen to make a few quid out of customers by pulling the wool over their eyes.

Financial groups are constantly asking why their customers are so sceptical and why we are so hard on them. My answer is because so many of them are undeserving of any trust, having long lost contact with the concept of customer service.

The battle lines are drawn. To the industry we say: 'Clean up your act now because there really is no place to hide.'

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When celebrity motor-mouth Jeremy Clarkson mocked fears about identity fraud and published his bank details in a national newspaper, I waited eagerly for someone to put a sock in it for him.

Now he has a fraudulent £500 direct debit going out to the British Diabetic Association and his bank, Barclays, can't tell him who's responsible because the Data Protection Act is so efficient at protecting fraudsters.

My first ungracious thought was: 'What a shame it wasn't more.' More seriously, if a granny had written down her Pin number, her bank would refuse a refund of any fraudulent withdrawal on grounds of negligence.

Mr Clarkson has shown gross negligence and breathtaking naivety to complement his undoubted arrogance. If he asks Barclays for a refund, I sincerely hope they tell him to shove it up his exhaust pipe.