Is it legal for Lloyds to offer the fixed rate Isa to selected existing customers ?

Somerset

Background - LloydsTsb are offering a fixed rate for 2009/2010 to existing customers who already have an isa with them. HOWEVER some customers are receiving the offer ( to be accepted by 9th Feb ) and lots of other customers aren't. I am one who hasn't been made the offer.

So this is a genuine question - is this legal ? ie FSA material ?

I was thinking about this - a bank doesn't have to offer any product to an individual if they don't meet their criteria, so current account rejections etc. Banks have targets which change, lending criteria, credit scoring, upgrades etc. So just because they accept A doesn't mean they want B.

But this is a pre-existing group of savers ! Pure cash in the bank. And some are being offered, some are not. I think Lloyds are concerned about losing the isa's which they've made the offer to ( by definition not so worried about losing those they haven't offered to) but that's conjecture on my part.

I spoke to my branch. The lad said others had asked but didn't know the answer. Went to his 'boss' who said I'd get the offer 30 days before my fixed rate expired - I didn't. I spoke on the phone today to CS - he also said lots of people had asked this but he didn't know the answer. He spoke to someone else who said a form would be sent, ( I don't think this can be done in time now ie by 09/02 ) and I'd get a 'customer concern' call-back within 5 days.

I understand that I can move my isa when my fixed rate expires, so it's not that I don't have a solution. But I'm seriously asking 'is this legal'?

Energize

They are a normal business, they can choose to sell products to whoever they want for whatever reason.

dunstonh

So this is a genuine question - is this legal ? ie FSA material ?

Yes it is. They can choose who they wish to offer products to or not. The only restriction on that is on grounds of discrimination.

Somerset

dunstonh wrote: »

Yes it is. They can choose who they wish to offer products to or not. The only restriction on that is on grounds of discrimination.

I have already acknowleded that they can choose their customers & products that they are prepared to offer their customers. Generally I have no problem with this and completely understand it.

This Isa situation is different. All 'approved' customers (otherwise they wouldn't have opened the existing isa). No breaking of terms (i.e. in for the full 12 months). No discernable difference in the 'monetary value' or 'customer value' being the decision critea - just completely random.

If the ''only restriction is on the grounds of discrimination'' how can an individual establish whether discrimination has taken place if the staff at Lloyds, both at branch & phone CS level, don't know what the grounds for the offer are ? They say they have absolutely no knowledge why some customers are being offered the deal and some aren't ? Plus, if the computer says I'm not a desirable Isa customer (ie no offer), why when I ask why of CS, do they say they will send an offer letter out ? ( too late now though !! ). Almost as if, if you kick up a fuss they back down, but why would they back down if they are correct in what they've done ?

Within a homogenous group of customers, on precisely the same existing product, Lloyds are offering a better on-going product to some but not others, with absolutely no explanation. Surely they have to explain ? otherwise there is the possibility of discrimination ?

bristolleedsfan

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=145&a=8812

http://www.google.com/search?q=banking+code+treat+customers+fairly&rls=com.microsoft:en-gb:IE-SearchBox&ie=UTF-8&oe=UTF-8&sourceid=ie7&rlz=1I7SUNA

Somerset

Somerset wrote: »

if the staff at Lloyds, both at branch & phone CS level, don't know what the grounds for the offer are ? They say they have absolutely no knowledge why some customers are being offered the deal and some aren't ?

The eight improvements include a new commitment to responsible lending, more aid for customers who could be heading for financial crises, strengthened credit assessment, clearer information about products, prohibition of account closure in response to a customer's valid complaint, information regarding how to find a lost or dormant account, greater clarity of cheque clearing times, and more clarity on credit cards and credit card cheques

.

The second quote is lifted from bristolleedsfan link to 'The New Banking Code'.

masonic

Somerset wrote: »

Within a homogenous group of customers, on precisely the same existing product, Lloyds are offering a better on-going product to some but not others, with absolutely no explanation. Surely they have to explain ? otherwise there is the possibility of discrimination ?

There is only the possibility of discrimination if the sample of customers selected is biased towards particular race/age/religion/gender etc. That sort of bias can be measured by the regulators.

To be honest, the customers that have been selected for this offer are probably those that the bank has data on suggesting they are (or may be) profitable to the bank, or as you say, those they are at risk of losing. There's nothing wrong with a bank negotiating a better deal for a customer in those circumstances. That practice is very widespread.

humfer

I suppose they can do want they want. However that doesn't mean I agree with whatever there criteria for this offer is. From my view point both my wife and I have decent amounts in fixed rate ISA's and pay a fairly large amount into our current account each month. I guess the only way around this is for this country to get out of its cronic lethargic attitude to this sort of thing, so that when company A does something bad, they all move to company B, therefore making company A reconsider, etc....in theory what real competition should encourage

Anyway, back to the subject. Just called again about this early bird offer. Stated that my account matures on the 7th feb and that I would go onto there variable at 1.50% but that I should look out on the website for new offers. When I asked why I hadn't received the new offer, the response was what offer. The offer explained on moneysavingexpert.com. Oh wait there. 2 minutes later complaint raised with her manager set to call me tomorrow. We'll see if they bother......

Somerset

There is only the possibility of discrimination if the sample of customers selected is biased towards particular race/age/religion/gender etc. That sort of bias can be measured by the regulators

.

Agreed - but how can anything be measured if Lloyds refuse to disclose what 'the bias' is ? ie. the criteria ?

To be honest, the customers that have been selected for this offer are probably those that the bank has data on suggesting they are (or may be) profitable to the bank, or as you say, those they are at risk of losing. There's nothing wrong with a bank negotiating a better deal for a customer in those circumstances. That practice is very widespread

Is it ? Seriously I'm not being sarcastic or anything. I assumed if Lloyds offered me e.g. a 'current account plus', that's the product spec ---->. the same for everyone, no special or side deals. What you're saying is, after 6 months they can offer me a better rate than other customers, just because they can or want to. Gawd I'm innocent.

If CS do ever do their 'customer concern' call-back, it's going to be an interesting conversation. Equally, I might do the unprecendated and volunteer for a 'customer review' and when they explain how they can save me money and offer better products, I can ask them why they chose to offer an inferior product on this occasion - why would I be interested in their insurance/credit card/mortgage etc when they obviously didn't want my isa or value me as a customer. Cross-selling means establishing a relationship with a customer - Lloyds actions re this two tier isa offer will only alienate the 'lower tier' customers and destroy the relationship. They seem to be cutting their own throat. Some bright spark probably got paid a lot for this idea !

masonic

Somerset wrote: »

Agreed - but how can anything be measured if Lloyds refuse to disclose what 'the bias' is ? ie. the criteria ?

All they need to do is provide demographic information about the sample of people targeted to the regulators. That will show if there was any illegal discrimination. Any other form of discrimination is allowed.

Is it ? Seriously I'm not being sarcastic or anything. I assumed if Lloyds offered me e.g. a 'current account plus', that's the product spec ---->. the same for everyone, no special or side deals. What you're saying is, after 6 months they can offer me a better rate than other customers, just because they can or want to. Gawd I'm innocent.

If CS do ever do their 'customer concern' call-back, it's going to be an interesting conversation. Equally, I might do the unprecendated and volunteer for a 'customer review' and when they explain how they can save me money and offer better products, I can ask them why they chose to offer an inferior product on this occasion - why would I be interested in their insurance/credit card/mortgage etc when they obviously didn't want my isa or value me as a customer. Cross-selling means establishing a relationship with a customer - Lloyds actions re this two tier isa offer will only alienate the 'lower tier' customers and destroy the relationship. They seem to be cutting their own throat. Some bright spark probably got paid a lot for this idea !

The system breaks down if people find out that other customers are getting a better deal. That's why many employers do not like employees discussing their salary and benefits with their colleagues.

KTF

humfer wrote: »

Stated that my account matures on the 7th feb and that I would go onto there variable at 1.50% but that I should look out on the website for new offers.

Is there any record of the maturity date or do you have to wait until the interest gets added? I opened mine in March but cant remember the exact date.