Barclays Bank
Red in tooth and claw.

              Despite the fact that she frequently likes to say Barclays isn't the bank it used to be, an eighty five year old relative of mine has been with them for so long now, she can't really envisage the idea of moving to another bank.
              There was a time for her when, as a retail customer, everything was quite simple and straightforward. She knew where she stood and was able to handle her own financial affairs. But now, even though she only has three accounts, a current and two savings ones, she often has to see a personal banker to make sure she is getting the best interest. Should she fail to regularly consult a personal banker, the way Barclays continually shuffles and switches the conditions and rates of interest it pays on its various accounts means that the value of her savings could be substantially reduced.
              Recently she received a new debit card, one of the touch-and-pay ones. She didn't like this because she realised that anyone who stole it from her would, without having to know her PIN number, be able to spend quite a lot of her money. But who would be liable? The last time she had her purse stolen she didn't notice until she got home and if that happened again, it would give a thief plenty of time to spend her money before she was able to inform the bank of the loss.
              She therefore went to Barclays and requested an old style debit card, one which couldn't be used without a PIN number. But the bank refused to give her one and told her they no longer issued the old style of card and that she, like all other customers, would have to accept a touch-and-pay card.
              But if she lost her card or had it stolen, a thief could go from shop to shop using it to buy packets of cigarettes and half bottles of whiskey. Even in an hour they would be able to spend a great deal of money which she would be liable for. She was very unhappy with this and asked me to look into it.
              In consequence, I went to her branch of Barclays and explained the problem to one of their personal bankers but was told that in such instances Barclays would take each case individually. If they felt the customer had taken every care with their card, they would not make them liable for the money spent.
              This, I explained, put the customer very much on the back foot because if they lost their card or had it stolen; they would have to bend the knee, touch their forelocks and literally beg Barclays to view their case sympathetically. Whether or not they would be liable for another person's use of their touch-and-pay card was very much up to Barclays and its sense of magnanimity.
              I also added that looking at the history of Barclays Bank and its treatment of customers in the past, Barclays always makes the decision which makes the most economic sense. Consequently, if a customer is a millionaire then covering the loss makes good sense while if the customer is just a someone who earns an average wage or less, it then makes the best economic sense to make them pay for a thief's use of their touch-and-pay card. In such a case, if the bank were to take responsibility for the loss, it could take them decades to get their money back and it would therefore be far better, from a shareholder value point of view, to make the poorer customers pay. If the customer then chooses to close their account and move to another bank, well what's one small time customer more or less?
              The personal banker was clearly uncomfortable when I went on to explain that making a low earning customer pay for a thief's use of their touch-and-pay card made the best economic sense. In the old days the customer could simply refuse to pay and take their business elsewhere. But in this day and age, if a customer walks out on the bank leaving the money unpaid, Barclays will simply keep the account open and then continually add fines and charges until the amount outstanding becomes so great, they are able to put it all on a central computer and ruin the individual's credit rating. After this, Barclays have the legal right to approach the courts and get a court order to make the individual pay. Not only the amount spent by the thief but also all the fines and charges which have since been added to the account - including the legal costs of actually bringing the case to court.
              If the customer still refuses to pay that is not a problem for Barclays because the court order will enable them to send round the bailiffs, accompanied by a police officer, and simply take personal possessions which can then be sold to recover all the money.
              In fact, making the customer pay for what the thief has spent on a stolen touch-and-pay card could make good financial sense, especially when all charges and legal fees have been added to the amount the customer must finally pay. Over a period Barclays would make far more from such a customer than if they simply issued them with a debit card which could only be used with a PIN number.
              Is this why Barclays is insisting on giving everyone of its customers a touch-and-pay card?


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---November 27, 2010---

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