Accounts open only to New External Money - totally against Fair Competition

Sceptic001

Sadly loyalty is long dead in the banking industry.

I remember with wry amusement that when I was a teenager in the 1970s I had a regular saver account with my local building society (long since defunct) into which I faithfully paid £5 per month as I was reliably informed by my parents that it would help me get a mortgage. :rotfl:

SeethingSaver

Aegis wrote: »

Now this I agree with. If enough people protest in this way and go to the clean accounts, you will eventually see the practice change altogether. I'm not 100% sure this would be a good thing, as the better rates in general would by necessity reduce, and the spread of rates would likewise need to narrow.

(to Originally Posted by Sceptic001
I agree this practice is very annoying. If you feel so strongly, why not close your accounts with the institution and write to the chairman and chief executive to explain your actions. If enough people do this they may change their policy.)

SeethingSaver said:-Same to large extent goes here Aegis as with another posting.

Says nothing for any regard to customer loyalty or trust on behalf of the bank/society does it. There are plenty of people who are too old to go round opening accounts all over the place (not to mention the ridiculous as well as inconsistent of amount of documentation you have to produce to do so these days) they are also not aware of the multitude of differing accounts that are continuously being sprung up - or of things like the account they currently have has been discontinued and/or the rate reduced to virtually nothing. Also many people trust these institutions a situation which they blatantly take advantage of. Will you still feel the same when you are 90 years old?

Also Aegis you are to an extent advocating the cut off your nose to spite your face principle, which shouldn't be needed. Lose the pittance of interest you are being given while you're moving your money somewhere else then when the new place does the same to you in a month or so tout your money around again.
Regulatory bodies should be there to effectively protect the integrity of what these banks/societies are doing and to see the weaker and less clued up are not exploited. Things should be stopped before they happen not after having to complain until you are blue in the face to a chairman who probably takes no notice anyway unless they are officially forced to.
You though seem to think the opposite and it's everyone for themselves I'm all right jack I've got perfect information and read the small print.

Innys

SeethingSaver wrote: »

(to Originally Posted by Sceptic001
I agree this practice is very annoying. If you feel so strongly, why not close your accounts with the institution and write to the chairman and chief executive to explain your actions. If enough people do this they may change their policy.)

SeethingSaver said:-Same to large extent goes here as with another posting.

Says nothing for any regard to customer loyalty or trust on behalf of the bank/society does it. There are plenty of people who are too old to go round opening accounts all over the place (not to mention the ridiculous as well as inconsistent of amount of documentation you have to produce to do so these days) they are also not aware of the multitude of differing accounts that are continuously being sprung up - or of things like the account they currently have has been discontinued and/or the rate reduced to virtually nothing. Also many people trust these institutions a situation which they blatantly take advantage of. Will you still feel the same when you are 90 years old?

Also you are to an extent advocating the cut off your nose to spite your face principle, which shouldn't be needed. Lose the pittance of interest you are being given while you're moving your money somewhere else then when the new place does the same to you in a month or so tout your money around again.
Regulatory bodies should be there to effectively protect the integrity of what these banks/societies are doing and to see the weaker and less clued up are not exploited. You though seem to think the opposite and it's everyone for themselves I'm all right jack I've got perfect information and read the small print.

Erm.......yes - "I'm alright Jack" is the way of the world. We do not live in some kind of utopian world that you seem to think we do. I'm not saying we shouldn't but we don't and, to be honest, I don't think the human species ever did.

Banks/building societies are not charities and live in a competitive environment. They need to perform to their maximum and, yes, that means making the most return they can from each customer.

If you don't understand that principle and how to use it to your own advantage, perhaps you should read some of Martin's articles.

SeethingSaver

Aegis wrote: »

Now this I agree with. If enough people protest in this way and go to the clean accounts, you will eventually see the practice change altogether. I'm not 100% sure this would be a good thing, as the better rates in general would by necessity reduce, and the spread of rates would likewise need to narrow.

Innys wrote: »

Erm.......yes - "I'm alright Jack" is the way of the world. We do not live in some kind of utopian world that you seem to think we do. I'm not saying we shouldn't but we don't and, to be honest, I don't think the human species ever did.

Banks/building societies are not charities and live in a competitive environment. They need to perform to their maximum and, yes, that means making the most return they can from each customer.

If you don't understand that principle and how to use it to your own advantage, perhaps you should read some of Martin's articles.

So Innys you are all for unfair competition and too bad for those who are not so well versed as you obviously seem to reckon you might be in manipulating situations to your advantage (have you got elderly parents or relations?). Don't you think that collectively forums/discussions like this should be pushing to eradicate the inequalities so we don't all have to spend hours researching every angle to extract the most we can from over complex terms conditions qualification rules and the such like?

SeethingSaver

Sceptic001 wrote: »

I agree this practice is very annoying. If you feel so strongly, why not close your accounts with the institution and write to the chairman and chief executive to explain your actions. If enough people do this they may change their policy.

I have been in correspondence with the norwich and peterborough ceo Matthew Bullock and he (or his designated letter writing lacky) has failed to defend his societies actions. If you also would like to take issue with this society I can happily send you his email address.
They though are not the only people doing this.
Have you had a similar problems and have you taken the matter to the appropriate body concerned?

SeethingSaver

Aegis wrote: »

How so? They make the terms and conditions quite clear that the account interest rates are variable, and it makes perfect sense that they would try to generate a large amount of new money in their deposit accounts rather than paying a lot more interest to a generally apathetic customer base. At the end of the day, they're out to make money, and they won't do so very well if they simply raise the amount of interest they are paying on all of their old deposits.

It may not be much fun for the consumer, but it's fair and competitive for the banks. It allows consumers to get a small additional interest rate over the best clean rates if they're willing to rate chase at least every year. Anyone else should accept the fact that variable rates generally suck, and should look to other accounts where the interest rates are fixed if they want to increase their interest rate.



There's no link between low interest rates offered by the banks and the financial crisis. In fact, lower savings interest rates across the board would actually have helped the banks weather the storm because they'd have had fewer outgoings to pay out. If you want to form a link between the crisis and the interest rates offered, then you'll effectively want all institutions to lower their interest rates to increase profitability and to reduce the probability of another crisis occurring.



Not really relevant again. The low interest rates are caused by the Bank of England's decision to reduce the base interest rates dramatically to give the economy a kick-start. Giving money to the failing banks was a decision that benefited everyone: savers, borrowers and those who simply use current accounts all need to have confidence that their institutions are safe to put money into.

In any case, the ones that have been bailed out are part-owned by the government, so there will be additional money reclaimed when the shares are reissued to the stockmarket.



As I said, there's plenty of justification, it's just not much fun to be on the receiving end of it.

I take it Aegis you are someone who borrows rather than saves or profit more from being able to obtain money at lower interest rates.

Firstly to your initial comment let me point out you don't even get as far as the terms and conditions of things if you are prevented from being able to apply in the first place.

From what you say I can only assume you consider this whole economic disaster would have been averted with the same near zero interest rates we currently are suffering, massive pre-war germany inflation would not have been the problem engulfing us all instead?
I for one am sick and tired of hearing the brown, darling and king hand washing claims that they despite being experts in worldly financial matters did not have advance warning of the problems coming...then joe public having to stomach the effects of their panic measures to supposedly resolve matters. They blame world events for the problems but want to claim although they couldn't do anything to prevent things becoming a disaster they do however magically in this instance have the answers to making things better again. If external world events caused things then recovery can only be attributed to external factors not these guys.
The pound (as always) has been inappropriately wrecked, confidence has not been instilled and everyone has not benefited by giving money to the banks...in the long run the banks will be raking in shedloads of profits after bleating for assistance from something their misguided greed seeking dubious lending precipitated.

Aegis

SeethingSaver wrote: »

I take it Aegis you are someone who borrows rather than saves or profit more from being able to obtain money at lower interest rates.

I borrow and I save. As do most people in the UK in some form or another. I've been lucky with my borrowings, but I've also managed my savings and investments effectively, and therefore have done pretty well now that we're at the other end of the market problems. Regardless, I still utilise savings accounts and therefore still have a valid opinion as to how they are operated by the banks.

Firstly to your initial comment let me point out you don't even get as far as the terms and conditions of things if you are prevented from being able to apply in the first place.

Which would be a consequence of the terms and conditions of the account. A "new money only" term is fairly common, and a bank is perfectly within their rights to offer an enhanced product for new business. They risk annoying their existing customers, but the only way to effectively object to this treatment is to move your money away. It's a good way to protest.

From what you say I can only assume you consider this whole economic disaster would have been averted with the same near zero interest rates we currently are suffering, massive pre-war germany inflation would not have been the problem engulfing us all instead?

We're not suffering, the low interest rates are designed to keep the recession at bay. Even so, the interest on savings accounts has until recently been in excess of the inflation rate, meaning the real return has actually been somewhat higher than usual.

dunstonh

SeethingSaver wrote: »

Financial bodies need to act fairly and competitively, this way of getting a quick injection of money is neither.
The actions of supposed financial experts in so-thought responsible institutions in the recent past has crippled the economy and slaughtered the currency. They have then relied on the country to bail them out. Savers are probably the people who are least responsible for what has happened yet they are the ones suffering the most.
There is no defence or justification for these unfair accounts not completely open to all and money from anywhere.

Whilst I have some sympathy with your view on accounts for new money only, I do get am beginning to get a bit fed up with anti bankers posts and attitudes of some.

Banking is not the first industry that has required taxpayers funds. Retail banks are also not to blame for the scale of the problem. If you are going to negative towards bankers then you may as well be negative towards every industry that has taken taxpayers money over the years.

Politicians are the worst. Anyone earning over a certain amount now is a considered a banker. So, a hit the higher earners with another new tax is promoted as bash a banker.

Politicians are also to blame for the scale of the problem. Gordon Brown borrowed and borrowed to spend and spend as if the bad days were never to return. Rather than reduce debt when we had the money to do so, he increased it. The banks are not to blame for that. Indeed, without the tax brought in by the financial industry over the last 10 years the country would be an even bigger basket case.

Banks and building societies do a lot wrong but lets get past the rather silly bash a banker attitude that now exists.

Back on topic for your post, the "new money" approach is not that different from the car and house insurance situation in reverse where they heavily discount, even sometimes at a loss, to new customers but wont offer those terms to existing. Sky do it with their digiboxes offering free boxes to new subscribers but existing had to pay for an upgrade. Its nothing really new but it is damned frustrating at times.

The savings rates offered are fairly consistent with long term average "real" returns on savings. So, whilst they appear low, they aren't really in real terms. The only people losing out now are not savers but those that use cash to generate an income. That is rarely a good thing to do at any time but especially isnt now.

Milarky

jamesblue wrote: »

Another thing i did not like last year, when i was looking to move my ISA the top paying account was with a popular Bank, but i had to be over 50

Age discrimination! This time against people under 50.

I totally agree that set criteria based on some arbitrary age threshold is laughable - it serves no useful social purpose is potentially divisive and damaging.

Wait a minute though, don't we already have arbitrary age threshold/discrimination in much of the public sector? The classic for me is 24 year olds pay the same taxes as everyone but are given 20% less JSA than 25+ (the full 'adult' rate) in order to eat. Does the government know something about the calorie requirements of under 25s that I'm not aware of?

[Age discrimination isn't just against old people!]

Innys

SeethingSaver wrote: »

So Innys you are all for unfair competition and too bad for those who are not so well versed as you obviously seem to reckon you might be in manipulating situations to your advantage (have you got elderly parents or relations?). Don't you think that collectively forums/discussions like this should be pushing to eradicate the inequalities so we don't all have to spend hours researching every angle to extract the most we can from over complex terms conditions qualification rules and the such like?

I do happen to have elderly parents and, yes, they do suffer at the hands of financial institutions in that their money doesn't work hard enough for them.

I have tried to help them by advising them that loyalty doesn't pay and the response I get is "That's too much like hard work - we just can't be bothered". In fact, it's the same response I get from my siblings when I try to help them

This, I feel is the nub of the issue - a lack of willingness by the general public to take responsibility for their own actions. It's far easier to blame someone else or simply complain about how hard they have been done by.

I don't deny that I dislike over complex terms and conditions. However, I take responsibility for my own actions and therefore am prepared to jump through the hoops to get the reward. Plus, with the wealth of information available, including that on sites like this, there's not much excuse, is there?

As for your second point, the sad fact is nothing anyone says on forums like this is likely to precipiate the kind of sea change in the Industry you feel we should be pushing for.

In summary, no, I don't like the system, but I will live with it and use it to my best advantage. If you wish to start a one person crusade to change it, by all means go ahead, but I don't think it's quite as bad as you make out.