Should banks be allowed to offer you credit if you have never asked for it?
We all know how easy it is to be tempted by an enticing advert for something we don’t really need.
But there is a big difference between waving a new pair of trainers under someone’s nose and encouraging them to saddle themselves with thousands of pounds of debt.
After all, taking out a personal loan is something that requires some serious thought, so you know you can afford the repayments should your circumstances suddenly change.
Irresponsible: Banks should have to be far more explicit when seeking permission to send out offers for loans or credit cards
It is not something you should apply for on a whim. Yet, as we reveal here, some lenders are casually enticing customers into taking out loans larger than their annual salaries.
Banks insist that they only market loans to customers who have opted in to receiving correspondence from the firm.
But this is disingenuous. It’s far more likely that they ticked a box on a form when they opened their current account and never realised a torrent of seductive advertising would follow.
Banks should have to be far more explicit when seeking permission to send out offers for loans or credit cards — particularly given that the rates they are offering are typically not even close to the best on the market.
In many cases, customers aren’t even guaranteed to get the rate advertised, as a marketing loophole means banks are obliged to offer this to only 51 per cent of successful applicants.
Britain has a well-documented debt problem. So as we head into the spendthrift festive season, lenders should be encouraging responsible borrowing — not handing out expensive credit like it’s chocolate money.
After months of reporting horror stories about the way banks treat fraud victims, it was reassuring to get this note in praise of NatWest from Money Mail reader Ivan in Wiltshire.
He says that after transferring two significant sums of cash to savings accounts with other banks, he received a prompt call from NatWest’s anti-fraud team checking he had not been coerced into doing so.
Ivan says: ‘The payments had been flagged up on their system and blocked until their integrity had been checked with me.
‘All praise to NatWest for preventing what could have been a fraud and protecting my money.’
It shows just how swiftly banks can move when they want to.
While we’re on the topic of fraud, a quick update.
A consultation on new rules spelling out what banks must do to prevent customers falling victim to fraud closed last week.
We submitted a response on behalf of every reader who has raised concerns about Britain’s growing fraud epidemic.
In it, we called for banks to refund victims until an official compensation scheme can be agreed, tougher checks to stop fraudsters opening accounts, and a better balance between the speed and safety of payments.
We attached dozens of your letters and emails (without any personal details included) to hammer home how devastating fraud can be.
It is now down to the steering group of bank and consumer group representatives to agree on a final code of conduct. Please, please ensure it goes far enough.
EE and Virgin were fined £6.3 million and £7 million respectively last week after overcharging thousands of customers when they left their contracts early.
Yet while EE graciously paid up, Virgin threw its toys out the pram and vowed to appeal.
If I were Virgin, I’d be keeping my head down. Ofcom has just dropped its investigation into the firm’s policy of charging customers hefty exit fees when they move to an area it does not supply.
Given that Virgin provides a service for only half the country, it’s incredibly disappointing Ofcom has chosen to let it off the hook.