Banks "don't deserve" consumers' trust

10/09/2009

Consumers should always shop around for financial products instead of placing their trust in their current bank as in many cases, their lender may not be offering them the best deal, an expert has said.

Ed Bowsher, head of consumer finance at lovemoney.com, said lots of banks are ripping off customers by charging interest rates on products like credit cards that are "far, far higher" than the Bank of England's 0.5 per cent base rate and as a result, they "don't deserve our trust".

His comments come after a survey by Datamonitor found that while only 50 per cent of Brits trust their own bank, just ten per cent are likely to make a switch.

Mr Bowsher said consumers - and especially those who have been with the same bank for a long time - need to get away from the habit of only using their current provider and start "comparing products across the whole market".

According to figures from industry watchdog the Financial Services Authority, customer complaints about banks increased by 32 per cent between the first half of 2006 and the second half of 2008 to over one million cases.

"There was a time when the length of your relationship with your bank counted for something, but that changed once the branch networks started to contract, decision making became centralised and many client relationship functions were outsourced," said EuroDebt director Kevin Still.

"Client trust has eroded with this and many clients that have been very profitable assets for the banks are now being treated badly, but the perception is that the other banks are perhaps no better - so why switch?

"EuroDebt deals with people with debt problems and introduced a prepaid current account for precisely this reason.

"We want to avoid social exclusion and allow UK residents access to the cheapest payment methods and a wide network of places and counters that you can pay money in or pay bills without penalty.

"Our fees are totally transparent and there are no charges for bounced direct debits or standing orders. We believe in simple, no surprises banking."

Tags; Debt Management and Banking, Retirement Money Problems, Young Family Finances,

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