I've got the TV on in the background whilst I'm reading the Forum and they've just announced that tonights' Panarama is about how the banks lure us into debt! Might be interesting to watch!! BBC1, 10.15pm.

Panorama tonight at 10.15pm BBC1 - How the Banks Lure You Into Debt.

Aggressive targets,

Hard Sell,

Sophisticated Marketing Techniques,

and

Profit from Customers in Financial trouble

Chris

Yep I'm tuned in. Will be taking notes.

Did you hear the bit about bank charges - these are the customers you want to retain at all costs?

Watched - disgusted.

Yes I heard that. The customers they consider the most profitable and the ones they want to retain at all costs are those most seriously in debt. And that it's irresponsible lending that has made the banks their profits.

Lots of talk about extremely aggressive tactics to recover money owing, as well as similarly aggressive sales targets. Nothing to do with respecting someone as a loyal and valued customer and all about making profit on the backs of those least able to afford repayments of the huge amount of credit thrown at them.

Yes it's up to the individual to restrict their spending and cut their cloth accordingly, but there is so much aggressive sales marketing in the guise of 'helpful advice' and 'financial health checks' that a customer gets swept along believing that the bank must know what it's talking about. After all if you're in a vulnerable position and the bank tells you that in order to get out of it you can do a, b and c, you're going to take their advice more often than not, rather than risk being hit by other forms of their aggressive debt recovery.

Even more determined now to clear everything I owe, sting them for what they've ripped off me, and then find alternative means of keeping my money safe and bill paying.

Posted in another thread about this programme - thanks to both OPs for the Panorama heads-up.

I too am disgusted. And as I said in that other thread, I shall be paying off everything I owe, stinging them for what they've ripped off me, taking my business elsewhere and finding a way of managing my money and my bills without their "help".

Those personal stories wrung tears out of me.

Damn, missed it - had a look on the Sky+ planner, and can't see it repeated Anyone know if it will be??

Mike

Here’s some notes I made on tonight’s Panorama, in case anyone finds them useful.

The Whistleblower is a top senior executive in banking and credit cards and is breaking the banks’ code of silence. She said she cannot overemphasise the [banks’] focus on profits.

Banks do not want their internal procedures exposed, and they actively push borrowing. Every bank and every branch has ambitious sales targets to make the customer borrow. There are bonuses on every product the bank staff sell, and there are tailored, tested marketing pitches to customers who don’t understand what is actually going on when they’re being sold these products. The marketing department of each bank is the engine of that bank, and has targets for attracting new customers and aggressive targets are set at sales meetings to maximise profits.

There was discussion about banks upping people’s personal credit limits and issuing credit cards to give the illusion that the customer is valued and has status in the eyes of the bank. If people are offered the money they believe they can afford it – why would the banks offer it to them otherwise. Upgrading a customer’s credit card limit is seen as increasing customer loyalty, and the customer has no say in these limits being increased – it didn’t appear from the programme as though they were consulted at all. Some banks and credit card companies will send up to 20 packs of unsolicited mail to a customer per month, each “selling” a different product; customers are also invited in for ‘financial health checks’, ostensibly to have a look at their current finances but actually to set out more products, tie them up in yet more debt if they’re having problems, and again increase profitability from them.

The whistleblower’s opinion was that banks were putting profit before human life (particularly poignant, given that there were dreadful instances given of people who had taken their own lives because of their crippling debt) and that there should be laws to prosecute banks for neglecting their duty of care to their customers. She said “The Banks cannot be trusted to self-regulate. They know they can get away with it.”

The term “Revolver” is used for a customer who [having effectively been sold a hill of debt] borrows heavily, can only make the minimum repayments and will likely not be able to pay off the whole amount. These are the customers most likely to be retained by the banks because of their high profitability, and who have been sold products intended to maximise the profits to be made from them.

The conclusion of the programme was that overindebtedness has become a cancer in this country. Banks are very aware of the problems faced by their customers but they turn a blind eye.

Consumers should be very wary of their banks.

(Too damn right)

Damn, missed it - had a look on the Sky+ planner, and can't see it repeated Anyone know if it will be??

 

Mike

You can watch it here Mike

BBC NEWS | Programmes | Panorama | The money trap

Elsinore

Nothing really suprising here.

I have noticed in the Halifax in the last year or so when you visit the branch theres always staff hovering with a clipboard asking you if you who you have your mortgage with who you get your car insurance off and if you have a credit card.

In business its always acknowledged that you use your existing customer base first if you want to sell them something else that they maybe are getting elsewhere...... if you can provide this yourself.

The post office are a good example they will try and sell you anything these days,I am expecting them to be offering discounts on fruit and veg any day now .......

What has suprised me with the litigation thats taken place is their willingness to pay out before court given that the major banks actually run the country,this basically means if they were to recall all the money owed to them there would be hardly any businesses unaffected.

This is serious clout meaning the government has to take notice of them.

I am expecting the banks to complain that their widescale payouts will have a knock on effect to their business support and therefore investments to the industry.........I can see them using this as a leverage.

If the banks run the country then who will ever stop them from making their big proffits by whatever means they dictate?

A figure of £1 trillion was mentioned in the programme for the debt burden in the UK, and the RBS alone made £8bn profit in 2005.

I don't see the repayments to personal customers affecting their business activities and support though - we're small fry in comparison - although as you say, martin3030, I'm sure it won't stop them trying to use them as a means of political leverage.

The more I think about it the more determined I am to find alternative means of money management, and only use a bank account for the most basic of transactions if there is no other way of doing something.

It painted the picture that we've already seen. Maybe a few more will pick up on it now - but don't hold your breath .... there is a variant on bystander apathy that frequently comes into play .....

GSMGuy ....... you can most probably find the script + case studies of the prog at BBC NEWS | Programmes | Panorama

It made absolutely frightening watching and those families of those poor individuals was absolutely soul wrenching, it seems to me that there needs tobe an independent body to regulate and penalise (yes that word again) the banks to make then act more responsibly and to stopmaking the british public their private milch cows

Two threads merged.

Incidentally, if anyone's not got a good enough connection to watch the clip online, or doesn't have permanent access (such as me trundling down to a local cyber cafe), the BBC tend to repeat programmes such as Panorama and The Money Programme while in-season as part of their overnight "Sign Zone". These repeats will be anything from 3 days to 3 weeks after original transmission, so it's worth watching the overnight schedules for this - I imagine it will be longer at the moment due to the bloody football (). They'll do just nicely, if you can live with the picture reduced to around 2/3 size and an interpreter standing in front of it.

Keep those peepers peeled!

It was a repeat of the programme shown some time ago, possibly late last year.

The more I think about it the more determined I am to find alternative means of money management, and only use a bank account for the most basic of transactions if there is no other way of doing something.

What are the alternative means of money management? Aside from notes under the mattress...

Saj x

That programme was sooo interesting and absolutely sad at the same time that people are taking their lives over debt. I have a friend who works for NatWest and finds the job so stressful that she's considering leaving because of the banks demands and targets put on staff to litterally get people in debt.

I work in finance of the admin credit control dept of a telecommunications company and recently we received a letter from a widow who angrily had a go saying that her husband killed himself because of his debts and she felt that we played a slight part in his decision to do so, he was only 25. I found that really sad but at the end of the day what can us the debt collectors do when a debtor owes money? We get hundreds of financial assistance letters every week from people who may only owe a couple of hundred for a phone bill offering to pay a quid a week but are up to their eyes in debt. I once met a guy whos wife had 7 credit cards with thousands on each! 7? I can just about get one!

I have to say a few years ago I personally felt that NatWest was unscrupulous in its Credit Card procedures because i'm sure the minimum income requirements went down to £5k on the visa/mastercard(it is now £10k gross income per annum). I think it is sad when someone kills themselves when they feel they can never get out of debt. I really think Credit Card providers should work together to make sure people aren't given so many CC's.