Consumers urged to put pressure on the Big Banks

As this year’s ‘Bank Reporting Season’ kicks off, one of the only true alternatives to banks in the UK - Zopa.com - is encouraging consumers to take a stand against the excessive profits taken by the Big Banks in this country.

Zopa (zopa.com) - the world’s first marketplace where people meet to lend and borrow money to get a better deal by cutting out the banks – is encouraging consumers to seek justification from their Bank for the ‘GDP-sized’ profits they will each be declaring over the next few weeks of Bank Reporting Season.

This year’s figures have just started to come out, but last year, every household in the UK contributed an average of more than £400 to the profits of the big five Banks. And with the Banks representing five of the FTSE top thirteen companies, there is clearly an imbalance between the interests of the Banks and their shareholders, and those of their long-suffering customers.

So Zopa is encouraging consumers to ask for answers to a series of specific questions aimed at exposing the real injustices that help create Bank’s excessive profits. Although individual consumers putting their own Bank on the spot and insisting on being given answers is hardly likely to bring about an overnight change in Bank behaviour, Zopa believes taking this sort of action collectively will at least help to increase the pressure for much needed improvements in the quality and value of what Banks provide.

The specific questions Zopa would advocate being asked include:

How much money did you make in the UK? (If your overall profits look smaller because of your misadventures elsewhere in the globe, I want to know how much you made in this country from people like me)

How much profit did each of your UK customers afford you on average?

What percentage of your profits resulted from customer inertia, eg - how far off the leading deals offered in the market are your most profitable products?

Do you still offer better deals to new customers than you offer to those that have been with you for years? If so, how do you justify this?

What percentage of your profits are earned from the penalties you inflict on your customers, eg – for going overdrawn without prior permission, for bouncing cheques/DDs etc, for overdue interest payments on credit cards, etc.

After the recent Bank of England interest rate rises, how long did you wait until you increased the interest you charge on mortgages and other lending and how long did you wait before you increased the rates you pay on interest-bearing accounts? If you waited longer to raise the interest rate you pay out, or you increased this rate less than you raised the rate you charge your borrowers, how do you justify this?

To help these questions reach the right place, Zopa suggests that people keen to take action should put them - and any other questions they would like to add - to their Bank’s customer service teams.

James Alexander, co-founder and CEO of Zopa said, “Until the public starts to put more direct pressure on the Big Banks to change their behaviour, very little is likely to change in the quality or value they offer. National Consumer Council research shows that people in this country dislike Banks, in fact more than cold callers, door-steppers, public transport and mobile phone operators – so there’s no lack of motivation to see Banks improve. But taking GDP-sized profits from their customers has become institutionalised standard practice amongst the Big Banks in this country, and they are not going to stop it lightly.”

“Of course the more effective way for frustrated customers to apply their own pressure is simply to vote with their feet – something we don’t do enough of in this country. And rather than just switching between the Banks, people can make their vote count for much more by cutting them out altogether and coming to Zopa, where they will get a much better deal by borrowing or lending with fellow consumers in our Bank-free zone!”