MSE News: Lowest-ever loan from Sainsbury's fires up price war

Consumerist

JuicyJesus wrote: »

You mean to say they comply with the legal obligation to offer the advertised rate to at least 51% of applicants?

You raise an interesting point.

When the banks were required to offer the advertised rate to a minimum of 66% of applicants, the banks complied. The moment the EU directive allowed them to offer it to only 51% they couldn't comply fast enough.

The point being that banks will only do for consumers what regulation and legislation forces them to do.

Fairway871

I have now discovered that Sainsbury applied twice to Experian for my credit record as a result of my application. If I was cynical I would suspect that they did so to undermine my credit score should I wish to apply to another lender. This would encourage me to go to them for the loan offered above their much publicised rate.
Surely, the comparison sites, like even MSE, should have spotted that the low rate which puts them at the top of the "best rate" table is NOT available to the general public, but only to the selected few who shop at Sainsburys and have a Nectar card. It is disappointing MSE did not recognise this

JuicyJesus

Consumerist wrote: »

You raise an interesting point.

When the banks were required to offer the advertised rate to a minimum of 66% of applicants, the banks complied. The moment the EU directive allowed them to offer it to only 51% they couldn't comply fast enough.

The point being that banks will only do for consumers what regulation and legislation forces them to do.

I can summarise your complaint with this as "banks are businesses that want to make as much money as possible, in common with all businesses."

I'm not entirely sure I see a problem.

I have now discovered that Sainsbury applied twice to Experian for my credit record as a result of my application. If I was cynical I would suspect that they did so to undermine my credit score should I wish to apply to another lender. This would encourage me to go to them for the loan offered above their much publicised rate.

That is a pretty impressive conspiracy theory.

Simple answer - ask them to correct it. It is their responsibility to do so and your right to tell them to. One application, one search.

Surely, the comparison sites, like even MSE, should have spotted that the low rate which puts them at the top of the "best rate" table is NOT available to the general public, but only to the selected few who shop at Sainsburys and have a Nectar card.

I'm not sure that counts as a "selected few", and I'm fairly sure Martin would be quite happy to endorse getting a Nectar card, buying a paper in Sainos and swiping the card with it in order to possibly save hundreds of pounds.

Consumerist

JuicyJesus wrote: »

I can summarise your complaint with this as "banks are businesses that want to make as much money as possible, in common with all businesses." I'm not entirely sure I see a problem.

That doesn't surprise me in the least.

Most other businesses are in competition with each other and therefore have to price competitively. In banking there are so few players that they can operate more or less as monopolies - rather like a cartel. The name of the game in banking is who can charge the most and get away with it whereas in a truly competitive environment it has more to do with who can cut prices the most and survive.

Your other comments don't relate to anything I've posted.

Fairway871

JuicyJesus wrote: »

I can summarise your complaint with this as "banks are businesses that want to make as much money as possible, in common with all businesses."

I'm not entirely sure I see a problem.



That is a pretty impressive conspiracy theory.

Simple answer - ask them to correct it. It is their responsibility to do so and your right to tell them to. One application, one search.



I'm not sure that counts as a "selected few", and I'm fairly sure Martin would be quite happy to endorse getting a Nectar card, buying a paper in Sainos and swiping the card with it in order to possibly save hundreds of pounds.

I did not say it was a conspiracy, its merely a marketing ploy perhaps, or maybe it was just incompetence or an accident. Who knows
If MSE thinks its a good idea to do as you suggest I think, perhaps, they would have suggested it.

Niv

Fairway871 wrote: »

As an addition that I did not see in the small print, you must be a Nectar Card Holder ( which I am) and have had your card swiped in store or online ( which I haven't unless you count Homebase) to qualify for the 5.4% rate.
MSE Helen please note...this, I would suggest, significantly affects the number of potental applicants who will realise the eye catching rate
Dont think that Derbyshire loan rate has any "hidden" criteria like that so, generally is the better deal. Comparison must be like for like I would suggest

FYI Sainsburys does not own Homebase, and have not for ~10 years.

Niv

Fairway871

Niv wrote: »

FYI Sainsburys does not own Homebase, and have not for ~10 years.

Niv

Thanks for that Niv. It maybe explains why they added 1% to the loan offer. It would appear that you are a safer risk if you shop at Sainsburys and have a Nectar card;)

Fairway871

Update. I have been offered and have accepted a loan advance from my bank, First Direct, of £9000 over 36 months at 6.1%pa. This was done in about five minutes and the money was immediately transferred to my current account.
I contacted Sainsburys and told them that I have rejected their offer ( same loan at 6.7%) which immediately sent them into a flap and resulted in an offer to beat the offer from my bank. They did not say by how much they would better the offer but I rejected it anyway as I do not trust an organisation that claims to base their business on sound financial criteria then immediately ditch that policy for reasons of commercial competition.
What I am saying is that Sainsburys base their decisions less on the risk presented by the client and more on what they can get away with charging

JuicyJesus

Consumerist wrote: »

That doesn't surprise me in the least.

Most other businesses are in competition with each other and therefore have to price competitively. In banking there are so few players that they can operate more or less as monopolies - rather like a cartel. The name of the game in banking is who can charge the most and get away with it whereas in a truly competitive environment it has more to do with who can cut prices the most and survive.

Yes, that's why Marks and Sparks charge more than Tesco who charge more than Iceland. There is no incentive for a business to charge less if they can get away with charging more for the same product.

But regardless, the loan market is competitive. If what you were saying was true, Sainos could have just not bothered launching a 5.4% rate and kept it up at the 6.whatever they were doing before, and M&S bank wouldn't have launched their 5.5% rate, and...

It's a bit of a nonsense, what you're saying, because it simply doesn't fit with the actual market as it stands. There are plenty of competitors in the loan market. Probably more than in the grocery market as I discussed above.

Niv

Fairway871 wrote: »

Thanks for that Niv. It maybe explains why they added 1% to the loan offer. It would appear that you are a safer risk if you shop at Sainsburys and have a Nectar card;)

I am glad you realise i didnt mean it like that hehe, just as a share of information. Anyway grats on getting the loan!