Friday, 11 December 2009
How to take on Lloyds/TSB Bank - and Win!!
I thought I’d best hold back releasing this blog until the money had cleared into my account, which it did this weekend.
People in the UK are very well aware about how we, the public, have bailed out our Banks in recent months, of how the Government instructed the banks to get the cash flowing again by more lending, and how this never happened (did we ever expect it to?).
Here’s a story that proves just how stubborn and idiotic the people in charge of our banks really are, and I wonder if our economy ever IS going to recover ever again.
About this time last year, I was planning to rent-out my parents’ house (which I now owned). It just needed a bit of work to bring it up to rentable condition. I was quoted by the agents “about £2000”. I could sort this out myself but it would be very tight for a few weeks.
So I went to my bank (Lloyds TSB - yes, the one that we, the public, now own over 44% of) and thought I’d ask for either a short-term loan or an overdraft facility for about £1,500 for just six weeks. It was a guaranteed rent with (according to the agent) clients ready to move in.
I spoke to Simon, my bank manager (a chap I’d known for over fifteen years since he started as counter staff). Simon and I have always got on well, but he said there was a problem.
“If it were up to me, Ray, and knowing what I know of you, I would have no hesitation in lending you anything up to twenty five thousand, straight away. The trouble is: we long ceased to be traditional bank managers. These days we are salesmen: do you want an insurance policy…how about house coverage….or a different type of account?…that sort of thing.
“This concept of us making informed discretionary decisions based on our local knowledge and on the conduct of the customers’ accounts was long abandoned. These days our decisions are dictated to us by computer-generated fiscal models and credit-reference agency reports which, in a good number of cases, are simply wrong! So, sorry, Ray, no-can-do.”
I even offered to put the house up as collateral but he said that way could not be justified as the cost of setting up the arrangement would probably be greater than the amount wanted in the first place. Simon was supportive, but there was nothing he was allowed to do.
I decided to write to Sir Victor Blank’s office (he was - then - Chairman of Lloyds/TSB: photo above) to outline the ludicrousness of the whole situation, bearing in mind the growing pressure the banks were under from Government to facilitate liquidity again. I will say, to his credit (albeit after seven weeks of regular pressure from me) Blank’s office came up with a way round this problem: to treat the deal as a business loan, which would mean there are different criteria for judgements, and the deal might be done.
So I was then thrown over to the Bank’s Head of Business Loans - one Mr. Tony Hopson (I did warn you, Mr. Hopson, that I would mention your name in despatches!) at the Barking branch - a branch about ten miles away [even my own bank manager had never heard of him!].
He was passed Sir Victor Blank’s letter and it was not difficult to read between the lines of how to make this arrangement happen, and Tony Hopson gave me the firm impression that this is how it would happen…after all, he opened up a new Business Account for me (even if he did want to charge me £100 for the privilege).
The account opened, the cheque book printed, the statement sent charging me £100, he then calmly announced that he could not let me have the overdraft facilities…”because you don‘t fit the standard model for loans”…..!
For some reason Mr. Hopson seemed genuinely baffled when I asked him “well why did we open this new account in the first place?” He just didn’t get it…. and I told him to take me to court if he wanted his £100. [He subsequently did nothing].
Meanwhile, I had already sorted out my finances and the house was, by now, being refurbished. But for me, this had become a matter of principle.
I went back to my friendly bank manager to recount this bizarre episode and we got chatting. In the daily Press stories were starting to appear about how Lloyds/TSB was now the most complained-about bank in the UK and that many of these complaints centred around the selling of (unwanted) Insurance Protection Cover for loans issued.
I mentioned that in 2002 I had a loan out with the bank over a few years, and that I distinctly remember being told by the (then) manager - let’s call him Sean - “if you don’t take out the policy, you won’t get the loan”. Inevitably, I capitulated, even though I never needed the policy. I felt I was miss-sold this Insurance cover, I still had the paperwork (including my handwritten notes which clearly read - and underlined - “no policy = no loan”). I also remember that soon after my taking out this loan, Sean left the bank for another career. “Well, Sean always did sail a bit close to the wind”, was my bank manager’s opinion.
And so I put in my complaint to:
Lloyds TSB Insurance,
(Tel: 0845 300 5599 / Fax: 01633 468835)
Filling in the (very easy) forms, I worked out that over the years of the loan I had paid a total of £883.20 for the insurance cover - and that’s how much (minimum) I was claiming for. I was also encouraged by subsequent statistics which showed that, of all the complaints against Lloyds/TSB’s “miss-selling” of Insurance Cover, 83% were found in favour of the customer.
Surprisingly quickly, within eight weeks (this was now November 2009) they got back to me and upheld my complaint, without question. They would refund me my £883.20 plus 8% interest for something this and 8% under that model. I still had no idea how much I would get.
In early December I phoned them up to enquire about my money, they told me “we are still working on October’s refunds, we are very behind in this” - but at least they assured me I would get the money “before Christmas”, but I still had no idea about how much.
Last week they sent me a letter to tell me how much I would get, and the money is in my account now……well….. let’s just say it is nicely above £1,200. And tax-free.
I believe they call this Reeee-Zult!
I went back to my original bank manager (Simon), told him the story (I felt he was always supportive of me from the start) and said to him: “Isn’t it ironic that we’ve moved from a position where your bank Could have made money out of me in the form of short-term interest rates to a position where I want money from your bank, and now I’ve got it”.
So there we are:
£1,500 - the amount of overdraft I wanted for just six weeks
£883.20 - the amount I was claiming for a ‘miss-sold’ insurance policy
£1,200+ - the amount they finally gave me back.
And That, dear reader, tells you everything you need to know about the state of the British economy today and the people in charge of our so-called economic recovery. What a pathetic farce the once-respected British banking system has become (and I am speaking as a former banker)