Complain to FSA about misleading conduct from a High street bank

[zootscoot]

Does it make you angry when banks try to mislead you?

Well now’s your chance to do something about it.

You may have noticed in the press and perhaps from this website the fact that Barclays announced they are cutting their overdraft charges to £8. This looked all well and good and seemed a most attractive change for the consumer until you read the small print and found out that in fact it’s not quite as attractive at seemed.

We believe that Barclay’s news release on their website was misleading and that the overall package of fees and charges which they are proposing to introduce are unfair, disproportionately affect the less well off and are marketed in a way that amounts to customer abuse. Furthermore it is clear that the overhaul of the charging regime is a blatant attempt to evade the possibility of the charges being found unlawful in a court of law and yet still allowing Barclays to impose the same level of charges.

What you can do

The FSA has a report facility on their website whereby you can report misleading promotional and advertising material. If enough people complain about the behaviour of Barclays hopefully the FSA will bring Barclays to account demonstrating a clear message to other banks not to follow suit and that customer abuse will not be tolerated.

The report facility only takes a few moments to complete and costs nothing. Furthermore you do not have to be a Barclay’s customer to use it.

Please help CAG help consumers by taking a few moments to fill in the report. Follow this link:

Making a Complaint

Guidance for completion:

Q1 Select: member of general public

Q2 Select: website

Q3 Write: Barclays Bank Plc

Q4 Write: Restructure of current accounts and charging regimes, new service of reserve facility

Q5 Write: 29.05.08 or the date you accessed the website

Q6 Write the web url from here:

Barclays.com | Media Centre | News Releases | Barclays overhauls current accounts to make banking simpler and clearer for consumers


Q7 Either write your own comments or copy and paste the following:

A quote from the opening paragraph of the Barclay’s news release from their website states:

"Barclays is responding to customer feedback by overhauling its current account offering, replacing the unauthorised overdraft with a fundamentally new approach to overdrawn accounts, which significantly reduces the charges for customers who go beyond their agreed overdraft limit.”

I believe that this statement is misleading. Under the present charging system the paid referral fees are capped at 3 per monthly charging period and the unpaid item is capped at one per day. Under the new system a customer can be charged up to 5 times per day in addition to being subject to a new fee of £22 for use of a reserve facility for 5 days. If a customer goes overdrawn on a single occasion and exceeds the reserve limit, the charges under the new system would amount to£30 which is the exact same amount as at present. If a customer were to do this once per week the charges incurred under the new system in four weeks would amount to £120 as oppose to £125 under the present system which is hardly a significant reduction. The maximum charges a customer could possibly incur in a month under the new system is £930 whereas the maximum charges a person could possibly incur under the present system is £790 which represents a significant increase rather than a substantial reduction

A further quote:

“Personal Reserve is designed to act as a safety net for customers who exceed their agreed overdraft limit if they have one or go overdrawn if they don’t. This gives customers the peace of mind that payments will be met, putting the customer in control of their finances.”

I feel this is misleading as it suggests that giving customers, what effectively amounts to an increase in their overdraft, will help them manage their finances. I’m not quite sure how increasing an overdraft will achieve this. The use of the word ‘safety net’ is also misleading as what exactly is it saving the customer from? To me it appears to be an expensive form of borrowing which is a hybrid between authorised and unauthorised borrowing which is far from Barclay’s claim in the headline of the news release that they are ‘overhauling current accounts to make them simpler and clearer for customers’.


I also object to the fact that the reserve will automatically be applied to customers’ accounts and that if they do not wish to take up the service they must specifically opt out. This means effectively imposing an expensive charge (typical charges for unauthorised borrowing for other banks are £28 per month rather than £22 per 5 days) surreptitiously on to an unsuspecting customer who has not indicated that they wish to take up the service. Barclays have no means of establishing whether the customer had read any literature or fully understood the implications of such a service. This is tantamount to an unsolicited service and represents an unfair trading practice which is likely to materially distort the economic behaviour of the average consumer.

Also it is not clear from the news release or from the information given on their website relating to the reserve if the new £8 transaction fee applies only where you take up the reserve or whether the current fees will continue to apply.

I also believe that the introduction of the new charging regime represents a breach of the FSA waiver conditions which Barclays are currently bound by. (If your department does not deal with the waiver conditions please forward this communication on to the relevant department.) From the waiver conditions:

2) Whilst this direction is in force, the firm has agreed with the FSA to have regard to its obligations under the general law and the Banking Code relating to the relevant charges complaints. In particular, the firm has agreed with the FSA that it will not:

(a) make materially adverse changes in the level of its unauthorised charges (or in the ways that it applies such charges to its customers’ accounts) which could amount to customer abuse;

I believe the introduction of a £22 fee for 5 days of use of the reserve service which is automatically imposed is a material adverse change which amounts to customer abuse. It also represents a sham practice of simply restructuring the charging regime so that it applies to a service in providing the ‘reserve’ in an attempt to avoid challenge under the Unfair Terms in Consumer Contracts Regulations 1999. Many customers who are not financially literate may not be unable to understand the true nature of the charges and are being mislead into believing the service is good for them or may simply be unaware of the application of the new fee. As I’m sure you are aware not every customer reads every communication from their bank. I also feel the new fee structure will disproportionately affect the poorer customers. Those who get paid weekly as oppose to receiving a monthly salary are more likely to dip into the reserve more sporadically and therefore incur more fees for using the reserve. A customer on salary may only dip into it at the end of the month and thereby only incur one reserve fee per month. Those on salary tend to earn more than those on weekly pay.

I also feel the news release breaches the Banking Code in particular relating to the fairness commitment with regard to ensuring that promotional literature is not misleading and is clear for the reasons given above. Furthermore the fact that the reserve will be automatically applied to accounts would surely breach the Banking Code obligation of lending responsibly and assessing whether individual customers have an ability to repay.

2. Fill in your name, e-mail and phone number and then press submit.

You will then receive an e-mail confirming receipt of your report with a reference number on.

Thank you for taking the time to report this

[zootscoot]

This is a pdf copy of the website news release. You may be asked to provide a copy of the offending material. If so you can save this to your hard drive and attach it to an e-mail and send it to the e-mail address provided.

[GuidoT]

Done, took about 5 mins.

[tonycee]

Done.

I so want to swear at Barclays for the way they have affected my life..

And thank you team for your endless help..

[reallymadwoman]

Done.

[HSBCrusher]

its easy to do folks

[Alphageek]

Done. 2 mins, get to it people

[banker_rhymes_with]

Done, no sweat, and emailed them the URL too...just for good measure.

Cheers,
BRW

[jody123]

Misleading - they are all at it....for those of us fortunate enough to have any money sitting around to save the HSBC are offering interest on their "Bank Account Plus" @ 8%.... fantastic I hear you all shout, except the max is £1000 and it costs £12.50 per month to administer the account - hhhmmm £80 interest per year.....£150 per year to keep your money in there....so your £1000 is now worth exactly £930....

[vogelrok]

just about to send my complaint. Barclays have wrecked my life over the past 6yrs.
was ok when i had £6k a week going in as soon as i fell ill, they didn't want to know and the rest is history.

[DCG]

done

also passed the info on to my m8ts and there doin it aswell

[Hobbie]

Done! - 2 mins

Any other banks we can place the pressure on?

[smutley]

Done, with pleasure. Also sent email with the offending material

[Blossomandebony]

Done in 2 ticks.

BAE

[Audreygreeneyes]

just done it