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Thursday, 14 March, 2002, 16:34 GMT
One firm's struggle with the banks
Banks need more competition, David Carter says.
Gordon Brown's clampdown on the "excessive profits" made by banks from their small business customers have been welcomed by one businessman who has first-hand of experience of the banks' practices.

When David Carter set up his building contractor business Carebuild Ltd in 1978, he had a fairly good idea what to expect from his bank.

In those days, he said, dealings with the bank were done usually through a bank manager, over the table, and above-board.

But like many others in his position, he has become increasingly frustrated with the way the big business of banking has become a faceless, and at times unfair, partner to small businesses.

Any excuse under the sun they would charge for

David Carter
Mr Carter said: "Once they got rid of the traditional bank manager and brought in business sections, run by graduates keen to make a career in banking and operating away from the coal face, the service deteriorated dramatically."

He found it harder and harder to accept some of the charges he was being asked to pay simply for having an account with his bank.

"They would charge me for all sorts of things - visits to them were charged for, which I found objectionable.

"Basically, any excuse under the sun they would charge for."

Problems moving

Frustrated by the service at the bank he had used for 20 years, Mr Carter decided to switch banks.

But that would lead to just more frustration.

"I had real problems moving. The old bank were being as awkward as they possibly could be.

"I thought the banks would talk to each other, but they didn't do anything of the sort."

Mr Carter said his original bank was reluctant to help with transferring standing orders, or providing credit information to the new bank.

"Because of that, it took about three months before my new account settled down properly," he said.

Under the regulations proposed by the government on Thursday, banks would have to facilitate switching accounts within five working days and impose no charges for closing accounts.

Proposals welcomed

They would also have to provide a portable credit history - a statement that can be passed to other banks and be more transparent on how and why they made charges.

Mr Carter welcomed the proposals, and said he hoped the increased competition in the banking sector would mean small businesses getting a better deal.

While Mr Carter is happy with the service at his new bank, he said he suspected that some practices would never change.

"Throughout banking generally, there are some things that all the banks do.

"I have to make an annual visit to my bank to discuss my account, and I get charged 250 for that, and I am charged for every cheque they handle.

"But hopefully, with all the competition, if one of the big four banks takes these proposals on board, the others will follow."

See also:

14 Mar 02 | Business
Brown orders bank charge clampdown
14 Mar 02 | Business
Q&A: Small business banking
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