All entries for Monday 03 February 2014
February 03, 2014
“How much do you think it will cost make an electronic transfer from a Lloyds Instant Access Savings Account?” I was asked on Friday.
How much then? Thirty pounds! They charged more than for a bankers draft (cheque), at £20!
A couple of weeks ago a recent widow went into the Lloyds branch to organise an account to hold the main savings from her late husband’s estate and for a bond that is to mature shortly, both from Lloyds accounts.
The bank staff recommended an instant access savings account with the benefit of a Cashpoint card allowing withdrawals of up to £200.
Having taken advice on savings products, balancing interest return that is better by tying up the capital with the potential, finally, for an increase in rates, she decided to split the funds 3 ways.
Organising this by the safest way, an inter-bank funds transfer, would have cost £90 when the charges were made clear or £60 with 3 cheques.
At the time the account was opened, no paperwork was provided to her. Over the phone I guessed correctly that it was their Easy Saver account. I also spotted online that she would need to go to the bank and use a form, and photo id for larger transfers.
This is not a surprise given the money-laundering rules. There were restrictions for non-Lloyds current account holders but the charges for a CHAPS payment were only found in their general charges list, available online. Why is BACS not an option?
So they recommended her capital went into an account where the only free transfers available were to another Lloyds account. Miss-selling again?
Luckily, the next time she was accompanied by a relative who is legally qualified. They offered to make the transfer, for free, if it were all done with a single cheque. So they agreed to wait for the bond to mature to transfer all the money. Meanwhile Lloyds keep her capital for 0.5% aer.
All this becomes clear to me on the day the Lloyds Group’s provision for PPI compensation approached £10bn. It seems that the banks repayment of these PPI premiums is probably been the most effective cash-injection into the UK economy as it is to people who can spend it on the high street. How much have PPI repayments contributed to our consumer-led recovery? Given the total £20bn for all the banks so far, it is not trivial.