The failure of banks (#coronavirus)

The other day, I blogged about the failure of government in this crisis. Today, I’m blogging about the failure of banks. I am aware that in some countries – the Netherlands seems to be one – there has been great continuance of bank service. Unfortunately, the UK is proving to be one of the worst and ​I was not going to share this experience on the blog … but it got so bad as a horror story that I am compelled to.

It began with my card being blocked and not being able to access online just before the virus hit. I called the call centre in India, as I have been doing once a month near enough due to the terrible service, and got my card unblocked and, finally, access to the online statements to share with my accountant.

From there, it all went downhill.

The first thing is that, two weeks after successfully accessing online, it got blocked again with a screen saying “we don’t recognise you”.

I called the Indian call centre and they said they would look into it and to also report it as an issue with their online web form (they don’t have an app!).

I guessed the issue was that the bank had just changed its logon process from username and password to username, password and PIN. They had sent me a new card and a PIN entry system recently, but it kept failing. That's why I was locked out of the account online (they have no app, did I mention that?), and it was 'a known technical issue' according to one email I received.

Anyway when, after a week, I heard nothing, I rang the call centre again. Now, I got the message that the call centre was closed. In other words, I cannot access online or on the telephone … and they don’t have a branch.

This was sudden - India as a country locked down with four hours notice - but the message from my UK bank was: "Sorry, we can't talk to you right now. Try again some other time." It surprised me that they had no backup plan for an offshore call centre issue but then no one planned for a global lockdown.

So, it's not ideal but it was ok, the card was working. This is important as it just so happens it was my only credit card that I had with me in Poland, where I was staying when the lockdown hit. My other cards were either on hold due to high balances or they were left in my office in Britain. I usually only travel with two credit cards, and was now dependent on the one card that still worked for living expenses whilst in lockdown.

Then the stupid eejits blocked the card. Turns out this was because I used it to pay Netflix £11.99, which they flagged as a possible fraudulent transaction, which it wasn't. An £11.99 transaction on a card with a £15,000 limit and regularly sees transactions of 1000's. Hmmm ....

I got a message to ring the company to unblock the card ... but their call centre was shut down. I filled in their contact form a few more times and got a few unreliable email responses. Finally, I spotted that online they have a chatbot. Great. Happy days.

I open the chatbot and it says I’m eighth in the queue.

Fantastic. Happy days.

I’m thrilled to see the queue countdown until I reach number two in the queue. Then, as I’m thinking I’ll now be number one, I got the message that all operators were busy and there’s no one available to chat. So much for their chatbot.

Jeez.

In other words, I’ve got one credit card; it’s been blocked for no good reason; I cannot talk to the bank, because their call centre is shut; they haven’t bothered placing anyone on emergency contact to deal with any customer issues; I cannot get onto their website to clear the issue for a ‘known technical issue’; and no one responds to anything via email, telephone or chatbot.

The card company are a total disaster.

Imagine.

A major financial institution with a strong brand and reputation who effectively were shutdown in the lockdown and haven’t offered any way to contact them.

This is one the worst example of my Covid19 financial experiences, but there are many others.

For example, on March 23rd, I discovered something called CBILS. Not Basil Fawlty’s wife, but the Coronvirus Business Interruption Loan Scheme. This was an announcement from Rishi Sunak, the UK Chancellor, making it clear that the UK government were making available half a trillion dollars to be loaned to business through the UK banks.

I called my bank – unfortunately the same one as above – to get one. After an hour, I got hold of a human in the business banking team.

"I'd like a CBILS please."

Their reply: "I can log your interest, but you need to speak with a credit specialist to get one."

So I registered my interest and waited.

On 6th April, at 19:00, I got a text:

“This is a message from your bank. We want you to know we have received your request to call you back. Due to the volume of call back requests and staff available,  we may take longer than anticipated to call you back.”

Great.

I got a call on April 13th, three weeks after my original request. The lady on the call asked for details about the business and said the bank would make available 50% of last year’s profits as a maximum loan. I said ok, and she then requested my accounts via email. I duly sent the accounts. She didn’t reply.

Finally, after multiple follow up emails, she replied on April 23rd, one month after the original phone call, saying that the accounts were no good as they were for 2018 and she needs 2019 accounts. I replied, stating that these are the last accounts produced and filed and that 2019’s accounts were not due for preparation until the summer. She insisted she had to have last year’s accounts. I emailed back stating that they didn’t exist. What can I do. She emailed back saying that she had to have last year’s accounts.

I spoke to my friend in the bank. He said: it’s a regulatory requirement, and that the unaudited management accounts would do. I said: a bit difficult as my accountant invoiced me for last year’s work just as the lockdown came into force and I couldn’t pay it, due to the lockdown. A catch-22.

I’m not the only one in this situation. I heard that one UK bank has asked business customers to fill in a 9-page form to apply for a CBILS loan. It turns out the 9-page form is a pre-application to see if the business can make an application for the loan, and most get turned down and are not registered.

In this case, I don’t blame the banks however. I blame UK Government. For more on that, read this: CBILS faulty: Sunak’s flagship UK lending scheme looks unfit for purpose, Euromoney, April 24 2020.

But then the government solved this. They introduced "bounce back loans". These are 100% government backed loans for small businesses to borrow up to £50,000 and the funds delivered to your account within 24 hours. That kind of worked, apart from Barclays Bank whose systems could not cope.

Nevertheless, banks that keep you on hold for hours; don’t deal with applications for loans; ignore government advice and requests to fund small businesses; profit from the bad times by asking for security against any overdraft or loan requested; paying dividends and bonuses even when in the midst of a crisis; and so on and so forth, is not a great situation or attitude to the customer.

I’m also aware of some companies doing well in this crisis like Railsbank, Monzo, Citizens Bank of Edmond, Chime and a few others. Oh, and American Express who, without request, proactively called me and said don’t worry about paying my balance for the next sixty days and there will be no late fee charges.

I also asked for good bank stories in this crisis and am still collecting them. If you have any good bank stories, please share them with me so that I can post the opposite of this blog update.