Tag Archives | Allied Irish Bank (AIB)

Will “naming and shaming” financial institutions make any difference to their behaviour?

Short answer, as I wrote about in detail back in 2010, Are Irish business so brazen that “naming and shaming” doesn’t matter any more?, is a big fat resounding no.

This topic has been around for a number of years now, and still the proposed “naming and shaming” powers have not been given to the Financial Services Ombudsman. The Ombudsman, Mr. Bill Prasifka was on the RTE “This Week” programme back in March when he reiterated a call for his office to be granted powers to release details of complaints against individual banks.

In the interview, Mr. Prasifka specifically said that:

Making the complaints record of individual banks public would influence how they behave.

Earlier this month in response to this call from Mr. Prasifka, it was reported by the Irish Examiner that he would soon get his wish. According to the article, Minister for Finance Michael Noonan will, on April 24th:

Bring forward an amendment at committee to provide the Financial Services Ombudsman with the power to name, in certain circumstances and subject to certain conditions, financial service providers about whom the FSO has upheld complaints.”

Never mind that the “certain circumstances” and the “certain conditions” will probably water down any proposals to a status of “let’s make it look like we’re doing something without actually doing anything”, I don’t believe, as I argued in 2010, that this will make any difference to how financial institutions will behave.

As I said back then, taking Allied Irish Banks (AIB) as a case in point:

Last week, I wrote about AIB admitting for the eighth time in 6 years that they’d stolen money from their customers. That’s them admitting to having unjustly taken nearly €34m from over 250,000 of their customers – an average of about €137.50 each. So why does AIB still have 4m customers when so many of them are being treated this badly?

Even with being named and shamed 8 times in 6 years for stealing money from their customers accounts (not to mention the balls they’ve made of their involvement in the property market in Ireland), they still have 4m customers.

How can that be? Do people never learn?

Why now then would any naming and shaming by a captured regulator in limited circumstances as allowed by a captured Minister for Finance make any further difference to consumer behaviour when having money directly stolen from their accounts isn’t?

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What would it take for you to switch your bank?

There’s a lot of talk these days about how our choice in banking is slowly but surely being eroded with the closure of Halifax, Postbank, NIB branches, First Active and the looming threat that both AIB and Bank of Ireland will engage in massive branch closures to save cash.

On that basis, this post may not be all that timely – but I guess after years of recording incidences of where banks repeatedly gouge their customers through multiple overcharging scandals, this post may never be timely in Ireland.

Is there anything that would make you change your bank account – assuming that knowing that your bank is quite likely to steal your money from your account for themselves won’t do it for you.

This article from the Get Rich Slowly website, What Does It Take to Make You Switch Banks?, asks that very question and poses a few scenarios. Are there any of the following points that would cause you to switch your banks:

  1. Higher interest rates on borrowings than the competition?
  2. Lower interest rates on savings?
  3. Poor customer service?
  4. Length of history with your current bank?
  5. The principle of the thing?
  6. Accessibility – particular now with branch closures

Another way of looking at this would be if you imagined what a bank outside of Ireland might be thinking when looking at Ireland to see if it’s worth coming into the market.

We’re going to hear much bleating in the coming weeks and months about the reduction in competition in the banking market, but if people aren’t inclined to switch banks (even during times when we had plenty of competition), what’s the point in calling for more competition if most people are going to stick with the old unreliables?

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Overcharging by the banks – our regulator still only talking a good game

I wrote on Monday about the fact that “naming and shaming” banks and businesses that steal money from their customers isn’t having any effect on either encouraging customers to go elsewhere, or to shame these businesses into not doing it again.

When it comes to banking overcharging, it seems like stronger and more intrusive regulation is the only thing that will truly protect consumers fully.

I should declare though, that I’m not all that in favour of this though – there’s enough information available, for example, to illustrate to consumers that doing business with AIB may not be the best thing for their finances. In such situations, I believe in buyer beware rather than bringing in stronger regulation.

Not that we’ll get any regulation changes anyway

It would have been nice if our new Financial Regulator, Mr. Matthew Elderfield, took the opportunity of the first overcharging incident of his new reign to show that he meant business and acted with purpose on AIB for thieving money from their customers.

So what did he say? Well, according to this report, he didn’t really say much. He sort of whispered, whimpered even. He said he “was concerned that financial institutions “continue to experience control failures” that result in customers being overcharged”.

He also probably scared the pants off the bank executives when he said that “it was clear from recent cases that “change is needed” in how companies handle charging and pricing issue”, and more importantly, that “the regulator was conducting a review “to strengthen its approach concerning the timeliness of resolving overcharging in firms and the grounds for enforcement actions against such failures”.

Wow. We’ve such a better regulator in place now. Much better than his predecessor Patrick Neary who merely, when faced with similar banking overcharging back in 2007, “warned banks that they would be subject to ongoing checks to make sure they were not continuing to rip off customers”.

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Are Irish business so brazen that “naming and shaming” doesn’t matter any more?

Way back in 2004, Senator Donie Cassidy tried to start a “name and shame” campaign in the early days of what became known as “rip off Ireland”. If you were ripped off, you only had to name them to Donie, and he’d use Seanad privilege to shame them in the Seanad.

That went nowhere.

Since 2004, I’ve been keeping track of the Irish companies who’ve ripped off their customers by overcharging them in many various and ingenious ways. Last week, I wrote about AIB admitting for the eighth time that they’d stolen money from their customers in the past 6 years.

That’s them admitting to having unjustly taken nearly €34m from over 250,000 of their customers – an average of about €137.50 each. Handy money if you can get it (or more importantly if you’re bank is AIB, actually keep it).

It’d make you wonder:

1. What might be going on that we should know about but still isn’t being admitted to?

2. Why does AIB still 4m customers when so many of them are being treated this badly?

I’m focusing more on point number 2 here, and I’m a little perplexed.

I’ve been a persistent critic of the Financial Services Ombudsman who has steadfastly refused to “name and shame” financial institutions against which he makes findings.

My hope has always been that by naming and shaming, consumers would know who the transgressors are, and can then make conscious decisions to take their business elsewhere. So, if you know that financial institution x has been found to have misold a financial product to an unsuitable client, you can make your own decision to avoid that institution if you’re looking to do a similar kind of business.

But AIB has been named and shamed 8 times in 6 years for stealing money from their customers accounts (not to mention the balls they’ve made of their involvement in the property market in Ireland), but they still have 4m customers.

How can that be? Do people never learn?

Which brings me to this, from the Guardian:

There’s no point naming and shaming the banks. They have no shame

In an article from Patrick Collinson back in September, he leads with “Naming and shaming bad banks will never work. What we need is tougher regulation”.

When it comes to dealing with AIB for example, it seems we can have all the naming and shaming in the public domain that we could care to see, yet consumers aren’t learning their lessons – they’re remaining customers of the bank.

Who’s fault is it then, further down the road, if AIB dips back into their customers savings or current account for a few more quid? It’s not like they don’t need the extra cash at the moment.

Yes, obviously it’s the banks fault, but how much is the customer to blame, given they have full knowledge that having done this in the past, it’s possible that they may do it again.

Where does the Financial Regulator fit in here though? They can inform consumers – but consumers are informed now, but just not listening.

All that’s left, it seems, for Ireland as well as suggested by Mr. Collinson for the UK, “The alternative, which the financial services industry has fought tooth and nail against for years, is direct product and price regulation.”

So, more regulation. As Mr. Collinson closes, “The banks can’t be shamed into action. Instead they will have to be kicked”.

Unfortunately, as we’re seeing here in Ireland at the moment, our financial regulation has been named and shamed in its own right for recent disastrous activities, so we probably can rule out any new protections for consumers when it comes to overcharging in the near future.

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Comparing Ireland to France when thinking of moving home

I received this e-mail a little while ago from someone who was in the process of moving home to Ireland from France. They’d done significant research on the impact to their pocket of moving home when it came to their bills and shopping. (Before the last budget, mind you). Here’s the problems they found they’d be encountering when moving home:

I’d like to contact you to offer both my compliments and thanks to your site.

I’m moving back to Ireland after spending five years abroad – four of them in France and one of them in the UK. I’ve been planning the move back since November and found your site in December, and have been following the posts on the site since then. It’s provided a wealth of valuable information for me. I thought I’d share some thoughts about French and Irish prices, from the point of view of an average Joe, rather than a columnist in the paper. After all, the EU is supposed to be about the freedom of goods, single market, better competition and all that jazz.

France is a strange place for consumer pricing. Some areas see fierce competition, while others, for example the taxi industry, remain expensive and regularly.

Home telecom and internet sees, in my opinion, the best competition with excellent prices available.I am with a company called free who provide me with telephone, internet and television for 29.99 per month. There are hundreds of stations to choose from, the internet is 24mb speed with no download cap, and the phone calls to most EU and several international landlines are completely free. In comparison one of the best similar deals I can find in Ireland is with ChrousNTL, which will cost me 77 euro a month, and won’t include free EU or international calls – with close family in the US, UK and Spain as well as Ireland, this will be a disappointing drop in value. Not only will the base cost be more than double what I’m paying here, I will still need to factor in the cost of calls to the aforementioned countries.

Next up with have electricity. Electricity in France is reasonably priced, and that’s even with the default company, EDF. My current scheme runs on a yearly basis – I pay a fixed fee every month from my bank based on average usage for 11 months of the year, then it’s tallied at the 12th month. According to my last paper bill in August 2008, the origin of the previous year’s electricity was 87% Nuclear, 7.1% renewables of which 5.7% was hydro electric, 3.7% carbon, 3.2% gas, 1.5% fuel and 0.3% others. Wiki tells me that high % of nuclear power is a result of the 1973 oil crisis badly affecting the country. So, let’s see what sort of cost all that nuclear energy gives consumers.

Usage
August 2005 – August 2006: 2149 kWh – Cost: €300 approx – harder to calculate as EDF was still linked with gas bill and I had gas on the same bill.
August 2006 – August 2007: 2393 kWh – Cost: €318.09
August 2007 – August 2008: 2614 kWh – Cost: €346
August 2008 – August 2009: 2592 kWh – Cost: €360- obviously this is based on presumed usage, but I’m paying for this figure on a monthly basis at any rate.

These include the unit rate, and each year I’ve paid 12-14 euro for other fees.

My bill states that I pay just over 7 cent a unit, but the price plan i’m on seems to be represent the actual price of about  €0.1350 cent a unit. Not that much cheaper than the ESB clocking in at €0.1640 – yet the difference adds up; for my current estimate of usage it would be €425.08 with the ESB for the electricity alone.however this doesn’t include the standing charge, which makes no appearance on a French bill. This is approximately €0.28602 including vat (all my prices include vat, and on French sites TTC indicates vat included) for a year this amounts to another €104.39, bringing the total bill to €529.47 with ESB We are surrounded by wind and waves that could provide a cheaper and sustainable source of electricity…
On this note, I gather prices will drop; I noticed a large series of campaigns by Bord Gais about bringing cheaper energy to the market.

Mobile phone – here’s one where Ireland beats France, but where the UK stands ahead. I’ve included the UK  Offers there trump France and Ireland by a long shot. I’ve included them as I’ve lived there in the past, and have family there to compare deals with. I checked out the following links in anticipation of moving back for a phone I’ve fancied, and posted the best deals I could find in each country for a mix of text and minutes.

UK contracts for LG U990 touchscreen phone:

1) Free phone – 100 minutes and unlimited texts per month, £20 a month for 18 months with 3 telecom.

OR

2)
Free phone – 400 minutes and 500 texts, £29.37/month but 7 month free rebate means it averages at £17.95 per month for 18 months with o2

Ireland contracts for same phone with 3 telecom.

€149 phone – 90 mins OR 270 texts, €19 a month for 12 months
or
€129 phone – 150 mins OR 450 texts, €29 a month for 12 months

As you can see, you receive a lot more in the UK. Against France, Ireland wins out. The offers here are many and convoluted, especially with Orange. The same phone on a 1 year contract with Orange France costs 79 euro and has several contract methods. €18 a month contract gets you 40 minutes to mobiles and national numbers, or “unlimited texts” between 1600 and 2000. €21 gets you 60 minutes or “unlimited texts” between 1600 and 2000. The issue is the texts aren’t unlimited – you can convert your minutes to a fixed block of texts, 150 and 180 respectively. Higher packages similiarly yield more poor results.

Groceries – sadly I left my notepad in Ireland with the prices I had mentioned, So I can’t comment too much here. For an overall feel of prices, I’ve found France cheaper in general for all goods such as day to day shopping, or things from the electronics section in the supermarket. Without the exact prices to hand, I noted that for store brand produce, the prices were very close between Ireland and France for standard supermarkets (Dunnes Stores, Tesco, etc against Auchan, Carreforre), but for branded goods the differences showed. I’m pretty certain the difference in innocent fruit smoothy was almost two euro.

I guess none of that will matter too much to me as I will be shopping at Aldi/Lidl to minimise costs as much as possible.

Anyway, enough ranting from me, thanks for the great site and keep up the good work.

Makes for some interesting reading, doesn’t it. We’re being told that we now have competitive electricity and mobile phone markets, yet we’re not seeing the type of offers and discounts that you could get in either the UK or France.

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AIB Customers Targeted by Phishing Again

I received this e-mail during the week. It was reported last weekend in the Sunday Business Post (link expired since their website update) that these phishing attempts have increased by 150% in the last year.

I don’t have an AIB account, so it’s immediately obvious to me that this is a scam, but for others it might not be so obvious.

I’ve highlighted the dead give-away though – see what happens when you hover over the link that they’re directing you to – It’s not an AIB web address.

While you should probably never click on a link to go to any website where you need to log in with your username and password, this shows what you should be watching out for.

According to this article, not being careful about watching out for such things could cost you a significant amount of money:

Some customers were having as much as €30,000 taken from their online accounts from fraudsters who gain their access codes by stealth.

In 2007, 25 phishing attacks were successful with total losses in the region of €400,000, Ms Dillon said.

Last year, there were 63 cases with total loses to the banks of €220,000.

The only problem now is that it seems that anyone who’s caught and charged with carrying out these scams is getting away with it – according to this report anyway:

A MAN involved in a “phishing” scam on a Kilkenny bank customer has escaped jail after Judge Desmond Hogan gave him a suspended sentence at Dublin Circuit Criminal Court.

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Go Green with your banking

We in Ireland are still somewhat behind the UK and the US when it comes to “green banking”.

For a number of years now, financial institutions have provided “green investments” that allow you to invest in green businesses such as wind and wave power, recycling and other “carbon neutral” businesses.

However, a growing number of financial companies are starting to implement greener ways of running their businesses – ultimately aiming to become becoming carbon-neutral businesses.

As part of these initiatives, some banks are offering green accounts, mortgages, credit cards and other services that include financial contributions towards green projects and organisations made by the bank on your behalf.

The closest that I can find in Ireland at the moment is provided by Allied Irish Banks. They are currently providing an offer called Add More Green. Under this scheme, AIB has promised to pay €5 per customer if they sign up to receive statements online. Sign up to get your current and credit card statements online and they’ll donate €10.

That’s a once off payment though, so its something rather than nothing. The banks website says that “AIB will work with partners to identify suitable environmental projects to benefit from the fund.” However, no details are provided online as to what these projects are.

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Did you make your commitment to AIB?

You’ve probably seen the ridiculous full page advertisements taken out by AIB in the newspapers on Sunday. The Angry Hedgehog has an image of one of the adverts.

The bank is making a commitment to us, the Irish people, as a “thank you” to us making a commitment to them. That commitment was where we gave them €3.5bn to bail them out of the hole that they’ve put themselves in by being shit at their jobs.

Let’s get things straight here. We, the Irish people, didn’t make a commitment to AIB – it was our politicians, helping out their banking buddies. And don’t say they were elected, because no one here elected Brian Cowen as Taoiseach.

The commitment is to play their role, as Irelands largest bank, in helping to get our economy back on it’s feet.

So there’s no truth in the rumours then that they’re going to hold on to the money for themselves until their own position strengthens before actually helping out those cash strapped businesses needing loans.

And let’s hope that AIB doesn’t put us first in the way they might have done in the past when stealing in excess of €50m from hundreds and thousands of their customers in the past 5 years through various different overcharging scandals.

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Consumers ‘victims of €620m rip-off’

The Irish Examiner
Tuesday, November 25, 2008
By Jennifer Hough

CONSUMERS have been ripped off to the tune of €620 million in the past four years, according to a watchdog website.

The report by ValueIreland.com shows more than 1.6 million customers were overcharged €623m for a range of goods and services from insurance companies to banks to phone companies from 2004 to 2008.

Editor of the website Diarmuid MacShane, a former director with the Consumer Association of Ireland, said he started compiling the name and shame list following a number of high-profile cases in 2004, and a survey by the website which found that more than 41% of Irish consumers did not check their bills before paying them.

The report paints a stark picture of how consumers pay for companies mistakes. AIB was listed eight times on the survey. Bank of Ireland had five offences, while the ESB was named four times.

The Government rang up the largest bill when it admitted in December 2004 that it knew pensioners with medical cards were being charged illegally in nursing homes.

This repayment of this overcharging is expected to cost in excess of €50m.

Mr MacShane said these revelations could possibly be the tip of the iceberg, as many people did not even notice they were being overcharged.

He added that he felt the Financial Regulator could be doing more to discipline the offenders, some of whom seemed to be overcharging again and again.

“As far as the consumer is aware there has been silence on the part of the regulator,” he said.

Dermott Jewell, chief executive of the Consumers’ Association of Ireland, said the research highlighted how important it was that people checked their bills.

Mr Jewell said the issue of overcharging had come up in a CAI survey in relation to supermarket receipts and price discrepancies.

“At different occasions we have carried out similar surveys looking specifically supermarket receipts. People need to be vigilant and check their bills.”

Mr MacShane also called for consumers to be cautious and not to make the mistake of assuming the bill was right.

“Banks and other companies had overcharged customers by large amounts of money, yet customers rarely noticed,” he said.

“If we don’t take such a precaution as checking a bill to protect ourselves from overcharging businesses, how can we expect others to protect us from these businesses?”

A spokesperson for the Financial Regulator said it was very active in pursuing companies who were thought to be overcharging.

The regulator yesterday announced that some of the country’s top banks are still not dealing adequately with complaints from customers.

It said that while all institutions had procedures in place that complied with the requirements as set down in the Consumer Protection Code, there were still problems, with 27% of consumers having “no idea” how to complain about a financial product or service.

Overcharging: High-profile cases

  • August 2007 — Ulster Bank admits overcharging customers by €4m.
  • April 2005 — AXA Insurance promises to refund €1.7m to 130,000 customers who overpaid for home or motor policies.
  • April 2005 — Bank of Ireland admits not refunding customers who had overpaid on insurance products to the tune of €15m.
  • June 2004 — Vodafone admits overcharging 22,000 customers a total of €147,000 through exaggerated roaming charges.
  • July 2004 — AIB confirms it was to make refunds to 34,000 of its third level and graduate customers. The total, before interest compensation, was €1.4m.
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    Overcharging banks – Consumers suffer again

    The Irish Examiner
    Tuesday, November 25, 2008
    Editorial

    A SURVEY, compiled by ValueIreland.com since July 2004, indicates a range of banks, service providers, and insurance companies have been exposed as overcharging 1.6 million Irish customers by at least €623,943,892, over the past four years.

    In April 2005, Bank of Ireland admitted that it had not refunded customers who had overpaid for insurance cover on car loans.

    It estimated that there were a total of 65,000 loans involved in that error. It agreed to refund all the customers a total of €15m.

    In May of this year, Bank of Ireland announced it was refunding about €200,000 to 16,000 holders of child saving accounts.

    The bank has agreed to repay the money after an incorrect interest rate was paid on the savings accounts between May 2003 and February 2008.

    Ulster Bank admitted in August of last year that it overcharged clients by not refunding about 25,000 borrowers almost €4m that they were due on insurance policies after they had repaid loans early.

    Abuses at AIB had previously been detailed.

    Over the past four years, Irish consumers have been ripped off by the banks to an extent that the term bank robbery has been given a whole new meaning.

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