Even charities are fair game

There’s no limit to the deceptions that high street banks use to wring money out of their customers. If you think that I’m exaggerating, consider the plight of Direct Help and Advice, a charity based in Derby.

This charity offers support to people who are in difficulty. It aims to help them to avoid debt and homelessness. It’s unlikely that its employees need to be skilled in currency trading, commodity futures, or hedge fund management. They will be called upon to give more mundane advice.

This is so obvious that you might wonder why I bothered to say it. Bear with me. It will be clearer as this sorry tale unfolds.

The charity needed to arrange a mortgage for its premises. It applied to a bank. This is the point at which it  became ensnared in a web of devious machinations, fuelled by greed and deceit, that banks so excel in.

The bank in question was NatWest, though I don’t suggest that it is any more devoid in common decency than any other. This bank pressured the charity into taking an interest rate swap product to help to protect the mortgage. This was presented as a ‘zero cost’ option. This advice was unsound. It was the opposite of the truth.

No-one at the charity was familiar with this kind of product, and it made the fatal error of trusting the bank not to lie to it or set out to ruin it. We know now that this is a dangerous strategy, and we’ve learned how much damage interest rate swaps can do, At the time, though, there was no reason for the charity to sense any danger.

The inevitable happened; interest rates fell, and the mortgage repayments rose steeply when most others were falling. The charity had difficulty meeting its commitments to the bank and still being able to offer help to its clients. It could only extricate itself from the mortgage by paying a fine of a quarter of a million pounds to NatWest Bank.

The charity’s funds began to be sucked into the bank’s insatiable maw. It was brought to the edge of collapse, then the bank took over its finances via a third party. You know the kind of firm: the ones that run a company into the ground, then sell its assets.

The regulator has recently told the banks that lying to their customers, in order to persuade them to buy a product that will damage them, is not best practice. They have been ordered to compensate those customers who were mis-sold interest rate swaps.

Who will decide whether or not a customer is a victim of mis-selling? The banks, of course. Who will decide on the time-scale for the investigations and compensations? You’ve guessed.

This set-up gives the banks even more advantage than they normally enjoy. If they take their time sorting out this unedifying mess, businesses will go under and leave no-one to be compensated. This is exactly what is happening to Direct Help and Advice. NatWest is permanently ‘in the latter stages’ of the process, but never actually completes it. It refuses to give any indication of a date when its ruminations might end. What odds do you give that this charity will survive?

Related articles

• ‘Goes away or goes under’? Are the banks dragging their feet? (itv.com)
• Debt charity warns future in doubt after RBS uses stalling tactics to major misselling claim (independent.co.uk)
• Direct Help and Advice (dhadvice.org)
• Supporting small businesses against the banks (bully-banks.co.uk)

I’m a troll, fol-de-rol!

I’ve been blocked from posting comments on Santander’s Facebook Page. I see this as some sort of achievement.

Santander views its Page as an advertising opportunity, so it’s understandable if it doesn’t want it spoiled by negative comments. Even so, I must have done something special to warrant being banned, because you’ll still find plenty of uncomplimentary comments on this page. Perhaps I pushed my luck by posting four comments in one day.

It’s amusing to poke fun at this self-satisfied bank on its own advertising portal, and I’ll miss it now that I can’t do it, but it’s no tragedy. It’s more serious to me that, on the same day, another user was banned from the Page.

She is a customer of Santander who has been put in an impossible situation, having had an insurance claim rejected. This insurance was arranged by Santander.

The sum involved is substantial, and she has no way to raise the funds. She may be forced to sell her home. Attempts to discuss this with Santander have been fruitless. You know the routine, having to make repeated calls to the bank, never speaking to the same person twice, explaining the whole saga from the beginning every time, no resolution in sight. It’s no surprise that it left her worried and frustrated.

It’s because of this that she has tried to get some response from her bank on its Facebook Page. Although her complaint is genuine and her language was moderate, Santander responded by blocking her and removing her comments. This bank is a shining beacon in the world of customer service!

I’ve been deliberately vague, and kept her anonymous, because she has now made tentative contact with the bank. I don’t want to do anything to compromise this negotiation.

Even though she might get somewhere now, the banks initial reaction, of pulling up the drawbridge at the first sign of dissent, gives a clear insight into its opinion of its customers. They only exist to make money for the bank. Once this ends, they become the enemy.

I see little sign of this attitude changing.

Have you had the same thing happen to you? Do you disagree with my assessment? Feel free to leave a comment.

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• Santander aims for US acceptance with a new media campaign (boston.com)
• De Niro talkin’ about Santander in new ad campaign (bizjournals.com)