FSA to monitor refunds from banks

It has been reported that the UK’s financial regulator, the Financial Services Authority, is to closely monitor refunds that are made by banks in instances where the consumer states that he or she has not authorised a transaction. Regulations that were brought in last November required banks to make immediate refunds to consumers for transactions that they claim that they had not made unless there was clear evidence that the consumer was involved in fraud or had been reckless. Read more

Mortgage war could be sparked by HSBC

Earlier this month the High Street bank, HSBC, which also owns the Internet bank First Direct, announced that it was cutting mortgage loan rates even for those with smaller deposits. Read more

HSBC’s £1bn boost to first time buyer market

HSBC has allocated £1 billion to a new 90% loan to value product which it is hoped will give a much needed boost to the first time buyer market. Read more

Is HSBC favouring its richer customers?

A recent report has suggested that High Street bank, HSBC, is giving more favourable treatment to its better off customers with its Internet arm First Direct than to its poorer HSBC customers. Officials claim that the customers of First Direct, who tend to be better off due to changes that were made by the bank a couple of years ago, are getting a far better deal than customers with its parent company, HSBC. Read more

Students protest against HSBC

Students in the UK have launched a protest against one of the UK’s leading banks, HSBC, and the protest has been quickly gaining popularity through the Facebook website.

Students are now threatening to boycott HSBC over new regulations that will mean the end of the hugely popular three year interest free overdraft facility on graduate accounts with the bank.

Many graduates have benefited from this three year interest free overdraft facility with the HSBC over recent years, enabling them to enjoy a financial lifeline without paying interest between leaving university and starting work.

However, the bank has stated that many of these accounts were abused, and this combined with high levels of bad debt have resulted in the bank having to make a commercial decision to scrap the three year interest free overdraft facility.

However, students are arguing that the reason they joined the bank in the first place was to be able to take advantage of these popular graduate accounts. The protest comes at a bad time for the bank, which along with other banks in the UK, is now vying for the business of new students that are starting university as the academic year kicks off.

One student stated: “They’ve shot themselves in the foot to be quite honest. Why would they want to alienate themselves from graduates who’ll be earning high salaries in years to come?”

Another stated: “I am so disgusted with HSBC right now – it actually makes my blood boil… Never before have I lost so much faith in an organisation. As soon as I can I am closing my account, moving my ISA and finding a new decent bank.”

Tom Smith
6th October 2007

Bank to waive mortgage fees until end of September

One of the UK’s leading high street banks, HSBC, has announced earlier this month that it plans to waiver all mortgage fees for new and existing customers until the end of September.

The bank has already agreed that it will be axing mortgage exit fees, as have many other lenders, following a call for action from UK regulators and campaigners who stated that mortgage exit fees has rocketed for no apparent reason over the past few years.

According to reports the mortgages offered by HSBC will be totally fee free for existing and new customers until the end of September. However, the bank is offering its best rates as mortgage specials, and for these customers will still need to pay arrangement fees. According to some officials, the bank has set rates higher than many of its competitors, and this, along with the arrangement fee charged on the best deals, could mean that customers could still be better off going elsewhere despite the fee free offer.

One official from HSBC stated: ‘With some lenders recently bowing to pressure to scrap their exit fees, HSBC has decided to stay one step ahead by removing all fees on its standard mortgage range until the end of September. This will enhance HSBC’s reputation for providing transparently priced mortgages which offer real long-term value. Sadly some lenders will simply look to rename their exit charge or bump up fees elsewhere, however HSBC customers can rest assured, the rate they see is all they will pay.’

The bank does offer a range of mortgages, but consumers are urged to do some research and compare rates from other lenders, as even if they have to pay a fee with another lender it could still work out cheaper due to the lower rates of interest offered.

Tom Smith
28th September 2007

Overdraft warnings will be displayed to HSBC customers

In a recent announcement the HSBC bank has revealed that its customers will now receive a warning if they try and withdraw money from one of its cash machines and the withdrawal could take them over their overdraft limit.

The machines will display the warning to customers that risk going overdrawn as the result of taking out the cash, which will offer additional protection and help to safeguard the customers from being hit by expensive bank charges.

The bank has warned that this facility will only be available to its own customers and not to customers of other banks that are using the cash machines, and this is because the bank has no access to the overdraft details of customers of other banks even if they are using HSBC cash machines. Over 3500 machines will have the facility to display this message, and the scheme is due to come into force at the beginning of October.

Although the precise wording that will appear to customers has not yet been confirmed HSBC officials state that this will help to make its charges more transparent and help customers to avoid having to pay the charged at all by enabling them to stay within their limits. The bank has also stated that if unauthorised borrowing amounts to under £10 per day no charge will be made. This will also be the case if money is paid back into the account by the end of the day to cover the amount of the money withdrawn or if the customer has not exceeded his or her limit in the past six months prior to going over the limit.

One HSBC official stated: “More than 95% of HSBC cash withdrawals are now made at ATMs and while you can already check your account balance before you make a withdrawal, few people do. We believe that alerting customers at this point will enable them to make an informed choice about whether to proceed.”

Tom Smith
20th September 2007

The Big Four not up to scratch state experts

Industry experts have stated in a recent report that the four biggest UK banks are not living up to required standards when it comes to offering value and service to customers, despite the fact that they are raking in huge profits each year. Read more

HSBC may be confusing customers over withdrawal fees abroad

With the summertime fast approaching many people in the UK are getting ready to jet off abroad to enjoy a relaxing holiday, and most will go armed with their debit cards in case they need to withdraw any cash when they get to their destination.

For consumers who have a packaged current account with HSBC the news appeared to be good, as HSBC has been boasting that these customers can enjoy using their debit cards at cash machines abroad without facing any withdrawal fees. However, although this makes it appear that the transaction will be totally free of any charges this is not actually the case.

HSBC do waiver the withdrawal fee for customers that have a packaged current account, which is basically a premium account that offers a range of benefits but costs the customer fourteen pounds a month. Being able to make fee free cash withdrawals at cash points abroad with a debit card is one of the benefits offered to these account holders. However, what many consumers fail to realize is that a loading fee of 2.75 percent is added to the foreign currency exchange rate.

According to campaigns and advertisements from HSBC: ‘Withdrawals from Cirrus/Maestro ATMs worldwide, free from HSBC transaction fees’ and ‘Cash withdrawals from ATMs worldwide are free from HSBC charges’.

However, viewers that look at the foot of the advertisement will see the small print relating to the loading fee, which means that these transactions will not be free of charge because of the increased foreign currency exchange rate.

An official from HSBC stated: ‘The 2.75% loading is not a fee. It’s part of how we calculate our exchange rate. We don’t believe we have misled our customers.’

However, Nationwide, which is one bank that does not charge any loading fee or additional charges is looking into the claims made by HSBC.

Tom Smith
12th June 2007

HSBC to improve insurance products

One of the UK’s leading banks, HSBC, has announced that it is extending its relationship with insurance underwriter Norwich Union in a bid to improve the insurance products and services that it provides.

Over ten million customers with HSBC can now opt for a range of general insurance products through HSBC that will be underwritten by Norwich Union. The bank and the insurance company have already been working together for over twenty years on certain insurance products, and their relationship will be strengthened as the bank increases the insurance products that will now be provided through Norwich Union.

HSBC hopes that this latest move will place it amongst the top ten providers of general insurance in the UK. Previously, HSBC offered a number of insurance products through Norwich Union, and this included travel, vehicle, and home insurance.

The bank also hopes that profits from its insurance products can be doubled through this improved joint venture, with the bank’s managing director of insurance stating: ‘Creating preferred strategic partnerships with leading general insurers is a key element of that plan. In the UK, an estimated £1 in every £5 of financial services expenditure is spent on insurance. That is why we have chosen Norwich Union, the leading UK insurer with whom we already have a strong working relationship, to help HSBC satisfy its customers’ insurance needs.’

The Chief Executive of HSBC stated: ‘It would be fair to say that HSBC has historically punched below its weight in insurance but we have shown before that our customers want to stay with us if we offer well serviced, good value products.’

Tom Smith
23rd May 2007

Will other banks follow First Direct and charge fees on current accounts?

Following the shock announcement recently made by officials from First Direct Bank, a subsidiary of HSBC, that it intends to start charging customers that do not pay a certain amount into their current accounts each month, many are now wondering whether other banks and building societies will follow suits, bringing to an end the era of free banking for consumers in the UK.

First Direct made the announcement last week, shocking experts and customers by stating that a ten-pound monthly fee would be charged to current accounts that did not have at least fifteen hundred pounds in. It has now been revealed that Nationwide may also be looking into charging bank account holders in the same way at some point in the future, with one executive from Nationwide allegedly stating: “I don’t think we can rule out charging for current accounts totally although we have no immediate plans to introduce such charges at the moment.”

Halifax, on the other hand, have promised that it will not be introducing any such charges on current accounts, and is in fact planning to open three new branches in the UK, as it is thought that many existing First Direct costumers will now be eager to find alternative banking solutions in order to protest against and avoid the new charges being introduced by First Direct.

One official from the Halifax stated: “Halifax is committed to free banking, and we would hope that other banks and building societies share this commitment.” Sadly it looks as though First Direct do not share any such commitment, and the impressive reputation and customer base that this Internet bank has built up over recent years is likely to take a tumble over the forthcoming months, with consumers desperate to get their accounts switched to a non-charging bank or building society.