A friend of mine recently stopped a police woman on the beat in Dalston, East London. “I need to make a complaint,” he said. “What about?” she asked. “Theft. My bank, Lloyds, has been stealing my money from me for the last two years and nothing I do seems to stop them. I want to report it.”
“Oh, I’m very sorry,” came the reply. “I don’t think we can deal with those kinds of complaints. You’ll have to take it up with the bank.” When my friend retorted that he had, repeatedly, but Lloyds continued to force him into positions where they knew he would incur further charges, the police woman laid a sympathetic hand on his arm. “You know, I’ve had the same problems with my bank,” she said. “I know what it’s like, but there’s nothing that we can do to help. Good luck,” and she went on her way.
I’ve watched the saga of this friend’s bank account with Lloyds from the sidelines and their treatment of him has been nothing short of outrageous. Despite three years of being a full-time undergraduate student, they refused to provide a student overdraft, instead levying a £35 charge every time an automatic payment put him even £1 into the red. They would then take a further charge for every single day that he remained over his limit, making it harder and harder for someone with a sporadic part-time income to make it back into the black and thus halt the charges. Students are supposed to be prioritising their studies, not fighting daily battles with bank managers.
The last time that he asked, yet again, for an overdraft of a measly £100, the bank said that the only way they could consider this was if he deliberately let himself go overdrawn, thus incurring another £35 charge, so that his need for an overdraft would be evident. Of course there was no guarantee that upon doing this he would be granted the overdraft, so he was being asked to pay at least £35 for the chance that his request might be successful. The likelihood of this looked extremely low on the basis of three years of overdraft refusals from the same bank. The request from Lloyds that he do this looks as though it should be illegal, if it isn’t already.
Yes, there are financial ombudsmen. Yes, customers of some banks are now being given the opportunity to claim back unfair overdraft charges. But if English is your second language, and you are a student with little experience of the personal banking system, it seems completely unfair that the onus should be on you to chase after the money that has been unjustly taken from you by a bank. Especially one that is awarding £375m in bonuses to its staff after a year in which it has made a loss of £3.5bn.
Even the hardiest and most experienced account-holders amongst us find it difficult to navigate the labyrinth that is so-called customer service from many high street banks. My friend has spent many, many hours in branches of Lloyds, trying to understand what they are doing with his money and why. It is reasonable to expect that a customer be aware of terms and conditions that come with financial services, but trying to stop the bank from taking half of his miniscule wages has become like a second part-time job for this unfortunate Lloyds customer. We know he is not the only one. Personal banking structures and charges hurt most those who can afford it least – those constantly negotiating the line between the red and the black. My friend was right: this should be a matter for the police.