Are you being screwed by your bank?

MCBIRNIE25

Are they doing a number on you?

Banks' little-known ranking system keeps tabs on you, says Patrick Collinson

Saturday August 19, 2006
The Guardian


What does your bank really think of you? Research by Guardian Money has uncovered scoring systems that rank every customer at Lloyds TSB on a scale of one to nine, and at HSBC on a scale of one to 100.
At a Lloyds TSB branch, as soon as the cashier has your account number and sort code, he or she will be able to see your "risk band" score. This (separate from a credit-rating agency score) tells the cashier that the customer is in one of nine bands - influencing the decisions and actions the cashier will take. A customer rated as a number one is top-notch; usually someone with a long history at the bank, who has no record of bounced direct debits or returned cheques, and who never exceeds their authorised overdraft limit.

Customers slip down the rankings if they mismanage their accounts. Persistent cheque bouncers - often college students with only a short history at the bank - are likely to find themselves labelled as seven, eight or even nine. A low score makes it much tougher for customers to obtain extensions to their overdraft, and if they want a loan, they will receive a less attractive interest rate.

HSBC is understood to run a "behavioural score" of between one and 100, plus a star system, where customers are rated from one star through to five stars. The ratings do not appear on bank statements or in other communications to customers.

Guardian Money tested several branches of Lloyds TSB. In each, counter staff were reluctant to tell the customer their score. In one north London branch, the cashier said she could not give out the number, and ushered the customer into a separate office. He was told he was a number two, which meant he could obtain preferential rates on loans and other services.

None of our mystery shoppers was ranked a number one by the bank, but neither did we find any sevens, eights or nines. Most scores were bunched around two, three and four.

A Lloyds TSB spokesman said: "We do have a customer segmentation system, called risk banding. It's for internal use only. It is drawn from a range of information we hold on the customer. It is not an external credit rating, and it does assist us in our decision making."

HSBC said it would not disclose details of its behavioural scoring.
Like other banks we spoke to, Lloyds TSB insisted that the existence of the scores makes no difference to the quality of service it offers customers. It said the score moves up and down according to how the customer is using their account. "If you were a three, four or five and, because of a holiday, things went awry, you can always get back on track."
Customers cannot challenge their score - Lloyds TSB says it is automatically generated. The only way to move up the ladder is to change behaviour.
NatWest uses a combination of scoring techniques. It says these are "commercially sensitive" and only used in conjunction with external credit- rating agencies to determine suitability for lending. Barclays says it has customer profile scores, but these cannot be seen by front-line staff at branches. A spokeswoman said: "It wouldn't be right for any Tom, !!!!!! or Harry in the branch to be able to access such information."
If you want to find out your bank score, the simplest thing is to just ask the cashier. If your request is denied, you can write to the bank requesting a copy of information held on computer records under the Data Protection Act, known as a "subject access request".

MCBIRNIE25

Imagine the fun i will have going and asking for my score Monday.I have copied the article from the Guardian and will take this with me.
Always wandered why i have had seriously snotty looks in the past.
I will demand this.

Have a good weekend all.

Smashing

Are you being screwed by your bank?

It's more than likely.

spud30

My bank advertise that they care for existing customers, yet within a week or two of hearing we have financial problems, they have reduced our overdraft by £850 and increased the APR from 7% to nearly 30%.

I've had an account with them for over 30 years, never before have I missed any payments

Very caring :mad:

They are all as bad as each other.

justruth

Get your own back, reclaim your bank charges, get debt free and invest your savings elsewhere!

nrsql

Why is anyone surprised at this?
Banks (and most other businesses) have to make decisions based on risk and it's a lot easier if they can assign a risk category to a decision and give rules so that unskilled staff can follow it through. It becomes a lot more expensive to involve experienced staff.
It's also a good thing to be able to change the way products are available to people depending on how well they manage there finances.

The lower the risk the better borrowing rate and higher limit should be available.
The higher the risk the highr the rate and lower the limit.

My only problems with what happened to spud30 is the amount the rate was increased and also I think if someone says they have problems that also should be taken into account - stop giving excessive extra credit but don't raise the rate. By owning up they have shown they are addressing the problem. I'm sure banks used to treat people like that (but that was when cashiers recognised you and didn't ask for id).

It's a bit like saying - oh dear we've made a mistake giving all this credit so we're going to correct it by making sure you struggle even more.

kuohu

I don't think it's unknown that banks have their own credit scoring systems (or risk banding, whatever you want to call it) but I wouldn't have expected this figure to be displayed on a cashier's screen if I was just popping into the bank to pay a cheque in. (Not that it makes a great deal of difference, though).

Do we have any bank cashiers here who can (anonymously) say if they see this figure on their screens when doing normal transactions?

Dr.Shoe_2

I heard years ago that customers were rated as fruit ranging from plums (the best) to lemons (the worst). It seems that I was an apple for years until my recent problems and now I'm an overripe lemon!

cathybird

MCBIRNIE25 wrote:

Are you being screwed by your bank?

I'd fall off my chair with astonishment if I wasn't!

What else do banks do with their time? :rotfl: :rotfl: :rotfl:

CarolnMalky

As someone who works/worked for a bank, I already know about this...its something we would never disclose to customers, and is used as a sales tool more than anything else.
If anyone wants more info feel free to pm me.

cattie1

i was told this by a member of staff at lloyds tsb 4 years ago-with my mother in the room-she even gave both of our scores in front of each other!!
mine was pretty good then but i'm sure i'm "a lemon" now!!!