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How the media changes reality: banks liars and bullies

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In an eight-page document
to the Chief Executives of UK Banks released on Friday, the UK's
Financial Services Authority (FSA) accused the UK Banking industry of
being "unfair". The document concludes an investigation into
unauthorised overdraft charging complaints procedures.  In softening
the blow with an opening "we did see evidence of firms taking steps to
improve their approach" and the fact that they "noted positive efforts
by some firms to do more to assess who they are charging, why and
when", the document then gave a pretty flagellating summary of its
conclusions:

  • "in some firms we found significant deficiencies and important areas of weakness" in responding to complaints;
  • "a failure to respond to these complaints";
  • "delaying or impeding complainants" with "unfair closure of accounts, or threats to do so"; and
  • making "false or misleading statements" to complainants.

The
conclusion is that the senior management of all firms "need to review
their firms' complaints handling procedures" and check that "they
comply with our standards, which include handling complaints fairly."

Or else.

In reporting the news, the UK media typically went over the top with the following headlines:

"Lies, scams and threats – banks are condemned", The Times

"Banks Accused Of Bullying Customers", Sky News 

Funnily
enough, both of these are produced by Rupert Mordoch's News Corporation
who obviously detest banks.  Maybe this has something to do with the
Wizard Mordoch's own upbringing in Australia which gave him a pretty
tainted view of banks and politicians, although he is not alone as yet
another national, the Daily Mail, ran the headline: "Watchdog attacks 'bullying banks' over rip-off charges".

What
it shows is that UK banks have been caught out this time - and this is
not the first time - and so the UK's leading newspapers will continue
to run a campaign to destroy the image of UK financial providers.

Meanwhile, if you look at less consumer-oriented reporting, a few other headlines on the same FSA report are more measured:

"Two firms face enforcement action over unauthorised overdraft charges", Money Marketing

"Clarity on bank charges could take over a year", Yahoo

So,
I think we have a case here of skewing the news reporting to suit the
reporter and the audience.  After all, "lies, scams and threats" is a
bit extreme, although the FSA's publication could be interpreted that
way.

Of course, the banking sector does not help itself when you get this headline in the Daily Telegraph about how Lloyds TSB accidentally leaked a memo that trains staff to reject customer's overdraft charge claims; and then you have today's Guardian reporting that the banks will be paying out over £1 billion this year in unfair charges - which is five times
more than the previously estimated cost of £200 million - after HSBC
admitted it had already paid out £120 million. 

The point of all of this is that banks do not behave in their customer's interests.

Now
this perplexes me as I cannot think of many service organisations that
could get away with treating the customer this badly as the customer
would leave ... apart from maybe the gas and electricity services, the
telephone and broadband firms, the airlines ... now I mention it, banks
aren't so bad after all.

All of this points out that banks can
be an easy target and the truth is that banks can sometimes be
somewhere between 'unfair' and 'liars and bullies', but are never
always unfair, lying and bullying, or they wouldn't keep any customers
would they? 

You tell me your view.

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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