Lloyds offers 18 year old bank account costing 10% of income

How do these people sleep at night? As if it isn't hard enough for youngsters in the current climate to find work. Pouncing on them when they go to pay in a cheque is disgraceful behaviour. They should be ashamed of themselves.

Goes to show that it is the FSA need to pull thier overpaid fingers out and do something about thier masters at the bank! No doubt in response to this outrage, they will go an add more regulation to the IFA world, makes perfect sense.....if you are on crack!

What an utterly pathetic story for Citywire to waste time on - who wants publicity here? Is Mr Wynter who plans to study philosophy at uni versity incapable of asking what charges there are - if so he shouldnt be let outside his front door? I am sure that's not the case. Frontline staff need motivating and to prohibit commissions seems totally crazy. In event of unreasonable sales behaviour a penalty system should apply.

This sort of mindless bank criticism should stop.

So you never went to University then John. Also sounds like you are worried about your savings as you sit each day watching the cricket. Did you retire from the bank very early?

I agree with John Kenyon, Wynter is about to go to university and can't look after himself. Didn't he think of asking 'how much does it cost?'

move bank

mum and dad too

the whole family actually

some banks are not as bad as that..........although they are too few and far between. Break up RBS and Lloyds...they are too big for their boots and should grovel for custom.

Perhaps this 'young' man's escapade could count as a credit for his current A level course work?

Proof, if it were needed, that we're well into the 'silly season' - but no match for the Teutonic psychic octopus.

A few years back I had to deal with a case where Lloyds TSB had loaned £8000 to someone who was sectioned under the mental health act and was required to pay this loan back every month even though they could not work and had no income. They had given their address as the mental hospital where they were sectioned on the application form! Obviously there was no investigation. The mentally ill person just gave the borrowed money away.The banks are still driven by greed and the marketing of loans regardless of the customers ability to pay. After a very long battle Lloyds TSB eventually and reluctantly wrote this particular loan off.

totally agree with john!

Surely individuals are taught common sense and ask Q's? not just cost but what the difference in accounts is?

Typical UK blame culture -- "I didnt want the credit, they made me have it" -Ttake some responsibility!

Our bank is charging us for every scrap of paper that goes in or out of the branch, is anyone offering free banking for good customers who stay in credit?

To all those who are saying things such as "pah he should have asked about charges" etc, well why should he ? is it too much to ask that the bank treat their customers fairly and offer them accounts that suit their financial situations ?

When I worked for a Bank in the 1970's the branch staff were there to get the best for the personal customers. If they wanted savings or a mortgage we sent them to a Buildng Society. I was always taught to meet the customer's needs. This started to change in the mid-eighties when we beacme more sales orientated. However on the business side we always charged slighhtly over what we thought the customer would bear with the knowledge that we could always refund. There was very little analysis of actual work done but the customers were generally ok with this arrangement. We were trained bankers then but now they are just into retail.

You will always get examples of these activities as long as the banks are run by their marketing departments, e.g Northern Rock. Close those departments, save massive expenditure on advertising, TV commercials and sponsorship. If anyone wants a bank account, just walk down any high street, go into two or three and play one off against the other.

Common sense really but the current student population is not savvy enough for that, still relying on mum and dad!

Obviously, its go for the jugular at the start of a banking relationship rather than court them via the old fashioned student bank account. Does anyone still do student bank accounts?

Maybe the idea under the last Labour Government to give financial education in schools should be resurrected by the Coalition, but this time done in the banks as the certainly need to understand "what a customer needs" rather than the "flog anything that moves in the banking hall" syndrome.

John Kenyon. I think you miss the point completely. In 1984 I left the Life assurance industry at age 27 purely because it was becoming obvious that we were restricted from giving advice to customers whilst incompetents seemed to be able to get away by pushing people into areas paying the highest commission. From that moment financial services ended up in the hands of operators with a 'cheap' sales team in place (i.e. the banks) The banks incentivise their front end staff, the ones with least experience, bottom of the food chain and lowest paid with commission to sell!! this is the same incentive that the top of the food chain have i.e. bonuses! Key individuals with banking expertise are missing from the banks and instead they are driven by marketeers and salesman only interested in the NOW! and have no concept of the costs to their client or their institutions in the future.

When i was with Sun life of Canada I wasn't allowed to sell anything on my own for 6 months (had to be overseen) and then only allowed to sell those products which i had passed the internal exams for.

In essence any company out there trying to ensure high standards cannot financially compete with the ones who employ cheap unqualified labour to flog stuff. The banks work on the lowest common denominator all the time and treat their customers in the same way which happen to be you, me and everyone else for that matter

In answer to Mr Kenyon (and the comments made by Anonymous 2 in relation to Mr Kenyon's post are ones I share wholeheartedly) there is this difficulty. UK customers still cling on to the notion that banks and bank officers as trustworthy professionals who would not steer them wrong deliberately. This impression, historically, was even more firmly held when dealing with a building society (supposedly a band of brothers)

No customer imagined that they needed to be on their guard in entering a banks portals, in the same way they would be were they buying at an auction or in a street market. My own view now is that bank practises over the last 20 years degenerated into a ruthless endeavour to maximise profits at the expense of all decency. You doubt me?

In my own case my wife and I were loyal members of the Halifax Building Society. We had been with them from day one of our house purchase in 1974. We were an ordinary professional couple with no children - a mortgagee's dream.

Not content with the very considerable profits they would make on the mortgage (and the house insurance that one had then to buy through the BS) The Halifax suggested we adopt an endowment method of securing our mortgage. They omitted to tell us that the agent who sold us the policies shared the commission with the branch on a 50/50 split. Eight years later the same branch churned* two of the policies sold [* a churn occurs when, solely for the sake of the commission earned, the bank/building society adviser recommends the surrender of a perfectly good usable policy and its replacement with a new policy]

They also suggested to the panel surveyor that "for the Halifax" he (and others) should not regard himself as bound by "vital restrictions" issued by the Royal Institute of Chartered Surveyors (RICS) on the use of the House Buyers Report and Valuation (HBVR) in reporting on older houses. In other words, do not slow the mortgage process down by recommending a structural survey. In doing this we believe the Halifax induced a breach of contract because, of course, the panel surveyor was acting for my wife and me, not the Halifax, in producing the HBRV. The "vital restrictions" issued by the RICS were for our protection and the surveyors. The surveyor told me that "if he had returned the instructions to the Halifax on the grounds of the age of the property", as the RICS enjoined him to do: "he would not have been working for the Halifax the next day", and 50% of his firm's business came from the Halifax.

I decided to spend whatever time it took to bring the Halifax (now HBOS plc) to justice. It took seven years. The Financial Ombudsman Service (FOS) proceedings were tortuous and, in the end, fatuous. A claim worth some £25,000 was assessed as being worth "approximately £925", according to the FOS formula. We reluctantly, having obtained a FOS determination that a churn had occurred (and an admission to that effect from the bank) took the matter to the county court. We won (the damages being assessed by an expert actuary at some £25,000 plus costs of some £5,000) but we had everything going for us. Time, money and access to really excellent legal advice, free of charge. What chance does an ordinary working man or woman have when they have been mis-sold an endowment or PPI policy?

To all of those defending the banks on this:1) The frontline staff should not be making sales as they are not qualified to do so, their incentive to do their job, should be their take home pay, otherwise they should be providing a service.

2) No product should be sold (or as I find in my branch of NatWest) pushed on to a client without the charges being outlined at the outset to prevent such a back log as this. Why the hell should a laymen young person be needing to ask what charges are applicable to a bank account! Most don't charge anything for starters, and so they shouldn’t as they fund long term loaning from this and therefore profit anyway

This type of aggressive, unnecessary and most importantly opaque sales is exactly what caused the financial crisis in the first place. There is zero accountability for mistakes in these huge banks governed by a chronically impotent (and un-justifiable smug) regulator. My father retires shortly from bank of Santander because he is constantly being 'forced' to sell products to 'targeted levels' (John this is in his own words obscene, not an incentive as he is leaving because of it! ). he is being replaced by......a salesperson, that's right, in one of the busiest branches of Santander where queues frequently go out of the door and into the street, they are bringing in a person to sell yet more sub-standard investment products to the public without a comprehensive assessment of its suitability instead of somebody to actually provide a service. i am glad to see that the banking world has moved forward and learned its lessons i am really am!

It is obvious that all youngster should be exploited ASAP or I would never be able to retire at 50 with my gold plated pension.

It's bad enough that Daddy had to save this 18 year old "boy" but some of you seem to expect Nanny to as well........seems to me he got a lesson in modern life that was obviously overdue.

My 21yr son signed up to HSBC. He needed an account that didn't allow him to overdaw as he was no good at managing finances and estimating what he did or didn't have in his account (minor learning difficulties). He like your article was persuaded to up grade - at a cost of around £13/yr - which gave him "free" travel insurance and other services - which he didn't need! Given he is unemployed, and getting around £40/week JSA, he was regularly getting hit with £25 charges for being overdrawn + interest. He was even charged for being overdrawn when his bank charge came in (= £13 + £25). His position was unsustainable - so as parents we came to the rescue and the account was closed. The bank sucked him dry of every thing they could get out of him - knowing his limited income AND is inability to handle finances. He had gone to them for help in the first place! He is currently with the Alliance & Leicester - so far so good - they seem to be doing what he needs.

Ian - if the person in question was an elderly person (this practice has been known to happen to elderly an awful lot as you are probably already aware) would he be being taught a well needed lesson? Or would you actually agree that the elderly person was being throughally shafted??? The fact that this person was young seems to have clouded your judgement, or perhaps you work for a bank and think this cut-throat practice is ok because, after all, the banks are teaching us lessons when they pull our pants down aren't they?

I see no problem with banks employing sales staff in order to sell their products in the same way as any other profit making organisation does. Why should retail financial products be any different to retail electronics, cars, houses, et cetera? All the consumers really want (and are entitled to) is advice that is clear, fair and not misleading, and to be sold a product which is suitable for their needs. The fact that this is done (in the vast majority of cases) on a non-advised basis means that there is no accountability on the part of the salesman for the product which his customer "chooses to buy". Give them all the capacity to give advice, as well as the training that goes with it, and there should be fewer cases like this, where the salesman "non-advises" the customer to buy something completely inappropriate.

So, to summarise the above comments, the young, the old and mentally challenged are fair game? We complain about society and unruley youths bein obnoxious and destructive but now it becomes all to clear that many of us never had any values to pass on....

As normal only one side of the siutation is reported and therefore it may be that the facts are not as cut and dried as reported. Not a very sharp A level student, is he unable to ask simple basic questions, he has much to learn !

lol this kid gets £70 a month pocket money, can't drive a car and needs his dad to come with him when he goes to the bank.

i'm sure he'll make an excellent philosophy undergraduate!

Financial Services is not taught in schools, they have religious studies and Personal social education instead. Also, (being somebody who was in high school less than 7 years ago) you are made to beleive that A-Level - University- amount shead loads of debt is the only way that you can do better than scrubbing toilets! This is because schools get extra money for sikth formers and it helped Gorden Brown in his announcements to tell ppl just how many new students there were in university (pure Stalinism). I think whilst this article does highlight that banks prey on the vulnerable, (just look at Anon 6s comment), or the comment about a person who was certified insane being given a loan, it also shows that our schools, really should be teaching students the basics and importance of being financially astute. To those who have focussed on the fact that the lad is an A-level student I ask the following: Why the hell would that mean he would ask a bank of all institutions about banking charges when it is obvious he never had to pay them before???? it is not in the vocabulary you moronic, ageist, cretins!

Anonymous 1........my judgement wasn't clouded, the person in the article is young! so why cloud your comments by suggesting he could have been elderly? To suggest that my comments can only be justified by me being a bank employee is, frankly, condescending........!

As for A2......you obviously haven't learnt any of life's lessons yet (or to spell) but if you read these blogs often enough some of us "moronic, ageist cretins" will teach you!

Frankly I am shocked at the level of criticism directed at the young lad in this article. I have a son of 18 who has an account with Lloyds TSB. This account was initially an under 19's account with which he basically had a debit card and no other frills. Now my son is in the army and was advised about six weeks or so ago by his superiors that he would need to ask the bank for a cheque book as he was about to be deployed. My son duly went to the bank and asked for a cheque book. He was told by the staff member that he could not have a cheque book unless he upgraded. She then proceeded to 'sell' him an account that has a monthly charge for just having the account and various other 'incentives' which he is highly unlikely to use including mobile phone insurance - which he told her that he already had.

Now my son didn't ask about charges etc at this meeting largely due to the fact that he was just eager to get a cheque book as per his superior's instructions in the very limited window of opportunity that he had. But my son is by no means an UNEDUCATED MORON as the comments above would lead you to believe. When my son started a college course through his school I took him to the bank to open his first bank account so that he would have access to money whilst he was at college etc. He was 15 years old. He had not paid bank charges or had any 'incentives' on this account he simply had access to his money which he paid in on a regular basis out of his building society savings account. This account was ideal for him and in his inexperience with banking he effectively relied upon the advice of the staff member and agreed to the upgrade - and to be honest I think that she was very aware of his situation and frankly took advantage of that.

I have since been advised that he shouldn't have needed to upgrade in the first place since he could have had a cheque book issued on this existing account. I am very disappointed about the whole episode and I can guarantee that had I or someone else with more experience been with him at the bank that afternoon he would NOT have come away with a totally unnecessary upgrade to his account!!!!!

I can also guarantee that when my son returns back off tour I will be taking him in to his local branch to redress this situation!!!!!

BUY LLOYDS SHARES!

In this case the behaviour of the bank staff was at best unscrupulous and to my mind dishonest. I am amazed at the comments of John Kenyon and others essentially exonerating the bank for its dishonesty on the grounds that anyone foolish enough to be ripped off by LBG deserves everything they get for not keeping their wits about them.

I find the widespread acceptance of this truth profoudly depressing.

Sadly amoral behaviour is endemic within the whole organization of LBG - and the entire world banking system. Dont believe me? Just look at the whole garbage spouted by the boards of both Lloyds and HBOS in the time leading up to, and following the merger with HBOS. Lloyds shareholders were criminally misled, and personally if Eric Daniels told me it was tea time I would not believe him without first telephoning the speaking clock.

Anonymous 2 back again

Good to see some positives here - the main one's to do with the fact that not everyone young, old or with mental illness will be able to pick up on the fact that someone they are placing their money with.is actually not looking after their best interests. Banks are there to make money - but also need to look at some of the practices they are using to do this.

It looks like our non-University retired bank manager is watching the cricket afterall!

Harry could you live on £70 a month with a peer group of 18 year olds?

Another one who didn't go to University - 'envy is in the air' and it is certainly not 'love is all around'.

Look them up Harry or ask a smart youngster - if you are able to...

Sam - good for you - a good father...

Ian Phillips has too much time on his hands to look at how little he has to do -again envy of youngsters.

That will do for me - i stirred it a little amongst soem very sad folk it seems. I must go as i am writing a speech for the next Banking Association conference. Perhaps i will see some of you there?

Bank fees

This is the tip of the iceberg !

Banks make around 1% of everything sold by debit cards, sometimes more if shop owners are bad negotiators, typically over 2% of everything sold on credit cards. Plus the fees that customers pay to use the cards as well.

This means thay take around 1.5% of everything turned over in the UK with card purchases, which in fact is the majority of sales in the UK.

lets add in apr on loans that people without cash borrow and we move to a figure something like 15% of the UK's GDP is taken by banks for them having the pleasure of managing the countries wealth. Seems a bit excessive, but I'm sure shareholders are happy.

We live in an age of internet banking and fast electronic transfer of funds, managed mainly by software programs, why why why is it neccessary for banks to take what they like, it will only get worse unless harsh regulation is put in place quickly.

And then the government bails them out because they could not manage it well (unless you count them taking it all out in salaries and excessive bonus as managing it well).

now that interest rates are below 1% their profit margins on loans and mortgage's are massive.

Its time to socialise banks and or stop them ripping everyone off!

They will not be happy until they are getting of have 100% of everyones cash (oh, they do already, don't they ?)

Add to that, that they essentially own everyone with a mortgage's property and you may begin to understand how in essence capitilism works to the benefit of banks and shareholders but to the detriment of the wider society as a whole.

Okay John Kenyon and Ian Phillips:

Here's the bottom line. In order to cope with banks you have to become as sharp, as uncaring and as ill motivated as they are. Thus I record all my calls to banks and use the two law degrees I possess to hold them to account.

Unsurprisingly (because they are, at bottom, bullies) they respect you for this, because you are doing to them exactly what they, routinely, do to others. It is not however how one should live one's life. A bricklayer or a carpenter does a wonderful job, without which none of us would have homes in which to live. Of course, come the recession, building work stops, and they are supposed to live on air. City and Guilds in the above trades does not equip them to deal with the pra*ts who mis-sold various bank products to them. I am really angry at the way in which the banks have behaved, and I am really glad we live now, via the internet, in a democracy where the ordinary man and woman can have his, or her, say. Of course the pr*ts who sold them the bad products were told what to do by the senior pr*ts who ruined the economy, and then departed with huge pensions the taxpayer underwrote.

Timothy.......you're a pompous condescending pr*ck. Do you think that because you have two law degrees and need a bricklayer and a carpenter to provide you with a home to live in you can tell me what "the bottom line" is?

Anonymous2........what's this supposed to mean "Ian Phillips has too much time on his hands to look at how little he has to do -again envy of youngsters" ?........and I agree with Harry, but would add if £70 a month (hand-out) is not enough GET A JOB!.....sorry, Harry, I'm sure you can reply for your self *grin*

Wow!! Just to let you know I have never been a banker! Also I was criticising primarily Citywire whom i thought were winding us up on this - the charges 10% of income but his income negligible - so the % is meaningless. Hasnt our whole society changed so much - the banks are part of that - certainly dont believe they are worst culprits around.

BUT am not defending the many examples (am told Santander one of the worst - so avoid them if you can) where poor service is given by bank staff - grief I'm 70 now so hardly likely to like what goes on...the world to pot etc!! But do think this is a cultural problem - we live now in a world where too many of us do not have a high view of honesty, truth and service and fairness to others. Bring back heaven and hell!!???

I've often gone on the basis that if you need to sell it (push it on) to me, it means I don't need but you get a big advantage if you do. At the end of the day, if I needed it or it was that spectacular, I would have got it already or it would have sold itself!

Many years ago when I was about 21, having just graduated and looking for a job I applied for a graduate loan with LloydsTSB but was told I must have the payment protection or have my parents act as guarantor. I said neither option was acceptable and she refused to process the loan further. The Adviser even got a random form out of the draw making out it was the guarantor form which I later found out there was no such thing. Anyway, out of desperation, I agreed to the payment protection (I was approved having declared NO INCOME!) and later complained about the sales process and returned the money, closing the loan. It would seem the reward for flogging the unclaimable payment protection policy by far outweighs the risks of paying out £100 goodwill gestures.

Another example was when I had trouble paying back my student overdraft with the Halifax (again being about 21). It was on 0% APR and the solution offered was to convert this into a loan at 12.9%APR...so if I'm having trouble paying at 0%, how would paying interest help matters? The bank had no sensible comeback to this and after 30mins of going round in circles, they agreed to extend the interest free period for another 3 months until I found a job.

A further example from my student days was I had a £350 interest free overdraft with Natwest and got into difficulty waiting for grant to come through (the LEA had a processing backlog). I asked for the overdraft to be extended temporarily but that was refused and they withdrew the facility but then increased my student credit card limit by £500 (paying about 12%APR).

Fortunately, in spite of the government's act of pulling up the ladder from the world of free higher education, my financial position couldn’t be any further from those days of needing overdrafts and such like. If I weren't as savvy as I was back then, I would have been shafted on both accounts.

And let’s be clear here, it's not entirely down to the adviser. This is pushed down from the top and is intrinsic to the operational model...the computer systems were (are?) configured to approve loans on ridiculous circumstances.

My wife used to work for Alliance and Leicester as an adviser and was instructed to sell 2 credit cards to each customer. One was for everyday use and the other being “for emergencies”...Eventually, with a temporary lapse in personal integrity, she was selling 2 credit cards to all and sundry, including old dears. Double the card sales, double the branch points and obviously double the bonuses...and this was encouraged top down and the neither did the ‘risk-controlled’ computer systems had any problems with issuing two credit cards to pretty much anyone.

Later my wife moved to Barclays had a daily phone call with her area manager where she had to explain each instance of a mortgage being sold but no cross-sale insurances. Then this moved to why didn't you sell the PPI insurance in addition to the life, contents and critical illness policies. Suitability for the customer was never a consideration. A failure to cross sale all insurances demonstrated an inability to convey the benefits (or relentlessly wear the unsuspecting and trusting soul into submission). She no longer works in a sales capacity for any bank

So, bank sympathisers, do you still maintain a 'buyer beware' stance or do the vulnerable and financially unaware need protection from the Big Boys? In every day, civil situations these examples would be considered obtaining an advantage by deception - otherwise known as fraud!

PS - I've now dismounted from my high horse ;-)

The first lesson in business/life for your child( about five years old).

Get him to climb up stairs and tell him. Jump down daddy will catch you.

When he jumps step aside and let him fall. As he lies in tears on the floor.

Give him the lesson. My son, trust no man, not even the nice lady at the bank..

Bob Saxton

Lloyds TSB are a disgrace and don't want to help loyal customers only screw them for every penny, but sadly they are no different to any other high street bank. So we have a choice, 'just walk away!'

Why whole of market IFA's get a bad press is beyond me, when most will be up front with their charges and be able to offer a much more personable service for many years. Whilst the faceless banks just bite the hands that feed them, chew them up and spit them out whether this is customers or their staff that don't provide the profit they are looking for.

However, the banks are making a profit again now aren't they wonderful?

Lloyds were in the wrong, NO ONE should have to ASK what are the charges, the banks should have it in BOLD capitals in red at the top of the application form, its about time all this minute small print was outlawed and banks insurance companies etc made to be TRANSPARENT.

jerry

Ian Phillips,

Calling someone a "... pompous condescending pr*ck..." is not really a very good answer is it? I'd go back to the bar stool if were you.

Best Wishes

Tim

John, who supported the banks in doing whatever made tham the most money, is amoral. This young lad, like all of his young years, was an easy victim, and should not have been so exploited. In many countries, "cricket bats in the car park" would be the recourse taken for such actions. At least this young escapee from marauding banks learnt his lesson early and to little cost. This is just another example that indicates that all "investors" have to be savvy and know enouigh to hold their own counsel. Otherwise just stick to ultra simple accounts with no frills at all! The endowment mortgage thing that some mentioned in this discourse is a good case in point. For years they have been rubbish with huge risks to the mortgagee, but they are still sold and bought by many. Anyone considering engaging with any financial so-called products HAS to write down all the risks of every option and work through the likelihood and the penalty, and THEN decide which is right for them.

Timothy Burton says it all to those who side with the banks. Anonymous 11 puts his case well also. Now the mortgage lenders are screwing people with their excessive product fees. How can that be legal?