Friday, August 31st, 2007 at 1:47 pm
I haven’t written about excessive bank charges for some time. It all seems to have quietened down while we await a deciding court case that is due in a month or so. In the meantime I want you to be aware of a scam that is being perpertrated to obtain financial details from people in what is a rather devious but clever way. The following is from the Office Of Fair Trading website…
OFT warning regarding scam telephone calls on bank charges
125/07 31 August 2007
The OFT has been made aware of a scam involving consumers being telephoned by people, alleging to be from the OFT, asking for personal and financial information including their bank account details in order for the OFT to reclaim bank charges on their behalf.
These callers have no connection with the OFT, and their intention is to use the information for identity theft or to run up bills or commit crimes using stolen details. The OFT will never contact consumers asking them for personal bank details.
The OFT is warning consumers not to pass on personal or financial information to cold callers either over the phone or via email, and if they have already done so, to contact their bank as soon as possible and review their credit card and bank account statements to see if there have been any unauthorised transactions.
Thursday, August 30th, 2007 at 12:57 pm
There is a long standing image we share about banks. It may have once been true but it is now just a relic from the past. It is the myth of the caring bank manager. Do you have any idea who your bank manager is? Do you suppose that if you phoned your bank and asked for an appointment to see the manager you would get to see him? These days the bank manager is a distant and irellevent figure and this clearly demonstrates how banks are these days. They are commercial oraganisations with just one priority. Making money from their customers.
If you walk into a bank and ask to open an account because you get one small payment each month they will have little enthusiasm or interst in you. They won’t expect to make any money from you. Walk into the bank and tell them you just won 8,000,000 on the lottery and you will be offered coffee and a comfortable ‘fireside’ chat. They will be talking to you but they will be seeing money and profit signs in their eyes. This shows where their priorities are. They are not your friend. They are not your mentor and advisor and they are not your husband, wife or partner. They are a business which makes it’s money from people like you.
Their staff may have been set targets of how many financial products they are expected to sell each week and they may well receive a bonus for achieving that target. This being the case, do you suppose that they have your best interests or their own bonus payment at the end of the month? They are only human after all. At least they might feel a little guilty about it but the bank as an organisation doesn’t care. You are just a number to them and you are either profitable or you are not. If they can’t make a profit from you then they don’t want your business.
There is nothing actually wrong with that approach. A business exists to make money and the banks are businesses. What is wrong is that they allow and encourage this myth that they are your friend. They Are NOT your friend. Don’t be hoodwinked.
When you deal with your bank always, always, always keep in mind this phrase. ‘They want to make money from me’. They do provide useful services and they are almost essential in modern life but they are not your friend and their services are provided to you because they want to make money from you or from your money.
They demonstrate self interest time and time again. Do you think that them charging you excessive amounts of money for a failed payment is good for you? If I wanted someone to educate me about keeping track of my balance I would hope they would do more than just treat me like a criminal and fine me. Banks are not your friend. It is a purely business relationship.
Never trust your bank and assume they will do what is best for you. Never simply accept their advice -consider if it is right for you and perhaps get a second opinion from a qualified professional who will not benefit from you taking the action suggested. If financial advice is given that benefits the person giving that advice then it should always be treated with caution. If financial advice recommends a competitor then it may be more genuine.
Always remember…’My Bank Wants To Make Money From Me.’
Wednesday, August 29th, 2007 at 11:40 am
The repercussions of the international banking credit squeeze are continuing to reverberate around the world. Stock markets have reacted to further bad news about companies that are exposed to losses due to the sub-prime and liar-loans lending debacle. Liar loans are a term used to refer to loans made to people who have not been required to provide any evidence of income or security.
 It seems odd that people will lend money without any proof that the person borrowing can afford to repay the loan but it would seem that they were happy to do this since they could then bundle up the loans and sell them on as ‘investments’ to various banks and other investment companies.
It is staggering that people working in the finance industry were paid huge salaries and bonuses for coming up with these crazy offers. Any schoolboy or girl would look at these loans and see that the maths does not work. Unless, of course, they naively thought everybody taking out these loans would be totally honest. Surely the finance industry is not that naive? If not then what were they thinking when they set up these loans? They surely must have been able to foresee the consequences but presumably they considered that selling on the loans cleared them of any obligations or potential problems. It does demonstrate what a selfish industry the finance industry is.
They have made their money and grabbed their bonuses and everybody else will have to pay for their carelessness. The effects of this will reverberate for some time yet. Investors of all sorts will have lost and continue to lose money on their investments. People saving for their retirement will find they have less than they had hoped and confidence in the stock markets will be reduced.
Consumers were misled, or seduced, by reduced early year payments and, temporarily, reduced interest loans into taking out loans and mortgages they could never afford to repay. The large numbers of people affected will have even less spending power and the rest of us will have our spending abilities reduced too as the effects travel outwards like a ripple in a pond. This is bound to hit businesses of all types.
This should be a warning to all of us, both individuals and governments. We cannot trust big business since their motives are entirely self centred and they are only looking to their next shareholders meeting rather than the long term view. Society has become dependent on credit to fuel a massive consumer spending boom. It was obvious to anybody who looked that this was unsustainable. The money has to come from somewhere to repay these debts and it would seem we are borrowing against our children’s inheritance and they will be the ones who have to pay the true cost.
It would be fascinating to be able to sit back as an observer and view this dispassionately as the fools running the finance industry suffered the results of their own foolishness. Unfortunately the fools have already got their money and very few of the rest of us are likely to be unaffected. What can we do about it? Very little it would seem. This is so far out of our hands that all we can do is suffer the consequences and be as prepared as possible for the next time such greed and stupidity causes global problems. There is a saying that, ‘A fool and his money are soon parted’. Unfortunately that also applies to you if you let your investments be managed by fools but how do you judge who are the fools? It would seem it could be anybody in the finance industry and, as they say, past performance is not a guide to future income.
