Seeing Red October 4 1999

Seeing Red
Monday 4 October
Guest reporter - Adrian Chiles
Producer Steve Carson

A report leaked to Panorama reveals that the Treasury is against bringing in laws to stop banks getting rid of unprofitable customers, even though the Government has pledged to end this form of social exclusion
At present up to 3.5 million people in Britain do not have a bank account and there are concerns that the number will increase. The High Street banks are shutting unprofitable branches across the country - around 4,000 since 1990 - and going to increasing lengths to "deselect" individual customers who are too costly.

Panorama has obtained the details of a banking industry survey which shows that more than half of the bankers questioned want to "fire" unprofitable customers.

Scroll down for programme video clips.

At the Labour Party conference last week in Bournemouth the Chancellor, Gordon Brown, promised to get tough with the banks over competition but no mention was made of their previous promise to tackle financial exclusion.

Panorama can reveal the details of the Government's "Access to Financial Services" report - so far un-published - which was compiled by a policy action team from the Treasury. It comes down against the idea of forcing banks to provide current accounts for all sections of the community, and says that the case for legislation on that is "weak." The report goes on to say "banks' selection of which sections of the market to service should be left to their commercial judgement."

The Treasury concludes that the problem is with customers, not the banks. "If people were better informed about what is available, fewer of them might choose to remain "unbanked," the report states. The report was due out last month but was held back from publication by the Government.

The programme also looks at the techniques banks use to make more profit out of their customers by selling them a wide variety of financial services. The Consumers Association describes the financial services offered by the banks as "very poor value products indeed". In a survey they found that some banks' insurance policies were twice as expensive as the best buy on the market. Also, bank personal loan could cost up to £1,000 more over the period of the loan than the cheapest available.

Related links:

HM Treasury's review of banking services (Don Cruikshank)

Social Exclusion Unit

Bank auditing companies (for advice if you think you have been overcharged). Please note other auditing companies exist besides these:

Acquiring Solutions

Anglia Business Associates

Would you like advice? Contact
Independent Banking Advisory Service
or
British Bankers Association:

The BBC is not responsible for the content of external Internet sites

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Barclays close its branch in Wheathampstead

After 62 years, the Barclays branch here has closed for good. On the final day, the doors are shut an hour early, much to the consternation of locals. The doors are re-opened briefly to admit a member of staff, and some elderly customers try and follow, keen to pay money in. Reporter Adrian Chiles intervenes on their behalf when the doors slam shut for the last time.

Gill Ayre banked with Barclays in Wheahampstead

She runs a haberdashery next door to the doomed branch. She's angry at the way she has been treated by the bank, and feels they are not interested in her or other small business customers.

Dr Catherine Smith. Deselection consultant to retail banks .

Dr Smith has advised banks on how to free themselves of unprofitable customers. She warns that many ordinary customers may find that they don't fit the profile their particular bank wants, and as a result, may find themselves being asked to go elsewhere.