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redrose
Beginning Saver
Joined: 04 Apr 2005
Posts: 33
Cash Points ££ 544.14
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 Posted: Sun Jun 04, 2006 2:54 pm Post subject: Britain's streets of debt: Whistleblower |
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A powerful insider breaks the banking industry's code of silence and reveals how the High Street banks deliberately target their customers and push borrowing.
Speaking exclusively to the BBC, this whistleblower is a key decision-maker involved in retail banking with one of the main High Street banks.
Her past experience in every department - from strategy to planning and sales - has given her an extensive understanding of how the banks do their business.
"In all my years of experience in the banking industry, I would say that consumers should be very, very wary of their banks.
"They put profits before the customer at every given opportunity," the whistleblower said.
Ambitious targets
At every level - from the branch to head office - the insider reveals an industry driven by ambitious targets to sell borrowing to customers.
"Every branch of any bank, and every individual who works in a bank, has very ambitious sales targets to sell you more products - effectively to make you borrow money and to get you further into debt."
"And they will have targets on every banking retail product that is available through the branch. And they will have commissions and bonuses on every product."
"It is a very very, sophisticated, tailored, tested marketing strategy and sales pitch to a public that have very little knowledge of what is going on."
Credit Cards
The insider lifts the lid on the world of credit cards, showing the various ways the banks try to get customers to borrow more on their cards - and carry debt over from month to month.
It is a world where customers are given names like "revolvers" and "transactors" depending on their spending behaviour.
Credit card transactions are carefully monitored by the banks. And they target their marketing according to how much customers are borrowing. It is all designed to maximise profits for the banks.
Credit Limits
One of the favoured tools the banks use to increase borrowing on the cards is to raise customers' credit limits.
The whistleblower explains how in many cases credit limits are "automatically increased" - and how limits can "literally double" in the space of two years.
"The higher the credit limit, the more the customer is likely to spend."
"It is generally felt in the industry that by increasing the customer's credit limit, by upgrading their card to gold or platinum, you are increasing customer loyalty, and hitting those marketing targets of retaining profitable customers."
Robert Jenkins had the credit limit on his Lloyds TSB platinum credit card raised from £6,000 to over £11,000 in under two years - on an annual salary of £18,000. His wife Evelyn was lent £4,500 on her Lloyds TSB platinum card on an annual salary of £5,500.
Mr Jenkins believes he was targeted by his bank to borrow and then lent more than he could afford to repay.
Commenting on Mr Jenkins case, Lloyds TSB told the BBC: "These limits and subsequent increases were offered after reviewing their joint income, their ability to repay and their external credit record."
"Financial health check"
Another tool the banks use is the "financial health-check". Customers are invited into the bank to look at their finances, but often, in reality, it is an opportunity for the bank to cross-sell lending products.
"When you are conducting a health check, you will look at areas where that person doesn't have perhaps one of the banks' products: they don't have a credit card, they don't have a loan.
"And in most cases, they probably do not need it. But, if they do not have it, you are going to try and sell it to them," the whistleblower explains.
Suicides
The insider reveals how the banks profit from those in financial difficulty.
"The most profitable customers are those that are perhaps the most vulnerable."
............... rest on the link ...
http://news.bbc.co.uk/1/hi/business/5029530.stm |
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Lucky
Newbie
Joined: 13 May 2006
Posts: 22
Cash Points ££ 512.86
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| Posted: Mon Jun 05, 2006 4:17 pm Post subject: |
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| Nothing much new there, though I think people bring it on themselves and need to be more responsbile when borrowing money that HAS to be paid back at some point ! |
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Lorna
Newbie
Joined: 16 Mar 2005
Posts: 14
Cash Points ££ 220.84
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| Posted: Wed Jun 07, 2006 12:22 am Post subject: |
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| i agree its nto exactly news, we have known of the tactics used for years, i.e. all the offers through the letter box and uppingof limits without request for. |
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Truman
Newbie
Joined: 08 Mar 2005
Posts: 12
Cash Points ££ 208.24
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| Posted: Mon Jun 19, 2006 12:58 am Post subject: |
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| Our bank branch has a poster inside showing a woman holding a credit card up to her nose with both hands, eyes closed, and with a look of ecstatic happiness on her face as if smelling a bouqet of freshly cut flowers. The caption: "You can experience the smell of a new car with our xyz credit card". I felt like puking when I saw that. |
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Sami
Beginning Saver
Joined: 17 Apr 2006
Posts: 39
Cash Points ££ 795.66
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| Posted: Thu Jun 22, 2006 1:29 am Post subject: |
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| I think its a question of people being too weak for their own good ! |
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