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From Times Online
August 29, 2008
End this cheater's charter
Andrew Ellson, Personal finance editor
The old saying goes that it is easy to make money if you have money. But I would now like to add a new phrase to the lexicon of the English language: it is easy to make money if you manage money. Less catchy, admittedly, but no less true, at least if our investigation into the way that banks handle the transfer of mortgages is anything to go by.
As we report this week, lenders are making £30 million a year by double-charging borrowers a day's interest when they remortgage. Buried deep in the terms and conditions of your mortgage contract is a clause that allows your bank to charge interest “up to and including” the day of redemption. This means that when you remortgage, you pay a full day's interest to both your old and new lender. By any notion of justice, this is grossly unfair and the banks, yet again, stand accused of profiteering from customers.
The banks' feeble defence is that it is too complicated to calculate interest according to the precise time of the transfer, in hours and minutes. Except, of course, that they don't seem to have similar difficulties when it comes to transferring savings, where they have to pay rather than receive interest. In most cases, banks don't pay interest on deposits on the day of an outbound transfer. A similar system could and should be used when transferring mortgage debt.
Sadly, the Financial Services Authority (FSA) seems disinclined to take any action on the issue. The watchdog says that it can act only if the banks do not follow their own terms and conditions, or if those terms are unfair. Clearly, the FSA needs to look again at this issue, because if making customers pay twice is fair, it's a cheater's charter. The FSA also requires lenders to be clear with, and not mislead, customers. But few, if any, borrowers will know when they sign up to a loan that they will have to continue to pay interest after their mortgage is redeemed, even if it is only for a day.
However, borrowers do not have to act with the same apathy as the regulator. If you remortgage and are unhappy about paying more interest than you should, write to your lender to demand a refund. If it refuses, take your case to the Financial Ombudsman Service or even the small claims court.
Lloyds TSB password spat is no laughing matter
Who said bankers are boring? One enterprising employee of Lloyds TSB has demonstrated that she, at least, has a mischievous sense of humour.
When a disgruntled customer, Steve Jetley, changed his account password to “Lloyds is pants”, this loyal member of staff altered it to “no we are not”. Needless to say, Mr Jetley - who had been in a wrangle with Lloyds over holiday insurance, which had left him with a £1,200 bill after a skiing accident - was not amused.
When he called the bank's business centre to change back the password, he was told that he was not allowed to use such a term. Nor would the officious employee allow him to choose “Lloyds is rubbish” or even “Barclays is better”. An exasperated Mr Jetley suggested “censorship”, only to be told that his password could not be longer than six letters. When he then suggested “faeces”, he was informed that new rules meant that the characters had to be numbers, not letters.
While it is tempting to laugh at such comic farce, the whole debacle does raise a couple of serious points. First, it reflects badly on Lloyds, not only because it shows how easy it is for rogue employees to access, alter and steal sensitive customer details, but also because of the sheer intransigence of some of its call-centre employees. Have they never heard of the notion that the customer is always right? Lloyds may not like what some people choose for their passwords, but it must be the customers' prerogative.
But the episode raises another question: what on earth is Mr Jetley playing at? Of course he should be entitled to change his password to anything he chooses, but if he is so disillusioned with Lloyds, why has he stayed with the bank? By all accounts, he remains a loyal customer, despite the problem with his insurance and the password debacle. It is no wonder that the banks offer such poor service when customers tolerate such misdemeanours. If Mr Jetley really thinks Barclays is better, why has he not switched?
August 29, 2008
End this cheater's charter
Andrew Ellson, Personal finance editor
The old saying goes that it is easy to make money if you have money. But I would now like to add a new phrase to the lexicon of the English language: it is easy to make money if you manage money. Less catchy, admittedly, but no less true, at least if our investigation into the way that banks handle the transfer of mortgages is anything to go by.
As we report this week, lenders are making £30 million a year by double-charging borrowers a day's interest when they remortgage. Buried deep in the terms and conditions of your mortgage contract is a clause that allows your bank to charge interest “up to and including” the day of redemption. This means that when you remortgage, you pay a full day's interest to both your old and new lender. By any notion of justice, this is grossly unfair and the banks, yet again, stand accused of profiteering from customers.
The banks' feeble defence is that it is too complicated to calculate interest according to the precise time of the transfer, in hours and minutes. Except, of course, that they don't seem to have similar difficulties when it comes to transferring savings, where they have to pay rather than receive interest. In most cases, banks don't pay interest on deposits on the day of an outbound transfer. A similar system could and should be used when transferring mortgage debt.
Sadly, the Financial Services Authority (FSA) seems disinclined to take any action on the issue. The watchdog says that it can act only if the banks do not follow their own terms and conditions, or if those terms are unfair. Clearly, the FSA needs to look again at this issue, because if making customers pay twice is fair, it's a cheater's charter. The FSA also requires lenders to be clear with, and not mislead, customers. But few, if any, borrowers will know when they sign up to a loan that they will have to continue to pay interest after their mortgage is redeemed, even if it is only for a day.
However, borrowers do not have to act with the same apathy as the regulator. If you remortgage and are unhappy about paying more interest than you should, write to your lender to demand a refund. If it refuses, take your case to the Financial Ombudsman Service or even the small claims court.
Lloyds TSB password spat is no laughing matter
Who said bankers are boring? One enterprising employee of Lloyds TSB has demonstrated that she, at least, has a mischievous sense of humour.
When a disgruntled customer, Steve Jetley, changed his account password to “Lloyds is pants”, this loyal member of staff altered it to “no we are not”. Needless to say, Mr Jetley - who had been in a wrangle with Lloyds over holiday insurance, which had left him with a £1,200 bill after a skiing accident - was not amused.
When he called the bank's business centre to change back the password, he was told that he was not allowed to use such a term. Nor would the officious employee allow him to choose “Lloyds is rubbish” or even “Barclays is better”. An exasperated Mr Jetley suggested “censorship”, only to be told that his password could not be longer than six letters. When he then suggested “faeces”, he was informed that new rules meant that the characters had to be numbers, not letters.
While it is tempting to laugh at such comic farce, the whole debacle does raise a couple of serious points. First, it reflects badly on Lloyds, not only because it shows how easy it is for rogue employees to access, alter and steal sensitive customer details, but also because of the sheer intransigence of some of its call-centre employees. Have they never heard of the notion that the customer is always right? Lloyds may not like what some people choose for their passwords, but it must be the customers' prerogative.
But the episode raises another question: what on earth is Mr Jetley playing at? Of course he should be entitled to change his password to anything he chooses, but if he is so disillusioned with Lloyds, why has he stayed with the bank? By all accounts, he remains a loyal customer, despite the problem with his insurance and the password debacle. It is no wonder that the banks offer such poor service when customers tolerate such misdemeanours. If Mr Jetley really thinks Barclays is better, why has he not switched?
actually enjoyed reading it.
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