Never trust a banker
Just when you think that all of the banking world's dirty laundry must surely have been aired by now, another skeleton tumbles out of its rather large and murky closet. Not content with incurring the wrath of a pitchfork-waving public by bringing the global economy to its knees, whipping intermediaries into a frenzy by mis-selling PPI, which has caused a monumental hike in innocent broker's FSCS levies, they now appear to be turning their attention to cashing in on small commercial insurance business, the lifeblood of the broking community.
According to a number of sources, quoted on the front page of October's edition of Insurance Age, naughty bankers are putting pressure on small commercial clients to take out their insurance with the bank's preferred national broker when applying for loans, and even overdrafts. And of course the greedy little bank earns itself a juicy kickback in the process. If the allegations are proved to be true, the banks are basically forcing businesses to switch provider, a highly uncompetitive practice.
So worrying is this trend that the British Insurance Brokers' Association is highlighting in its 2011 manifesto and I wouldn't be surprised if the Office of Fair Trading, Competition Commission and Financial Services Authority eventually wade in if enough solid evidence is presented.
I'm not saying the broking community is whiter than white, after all intermediaries are forever trying to nick clients away from each other, but that is what's called healthy competition. What the banks are accused of doing is not. Basically, a regional broker doesn't stand a chance if a bank is holding its client to ransom. Both broker and client, who I'd imagine wouldn't change providers in a million years if they were given a choice, are left powerless.
Once again it could be a case of the big bad banks getting one over on the little guy. I hope you will join with me in rooting for David, lets hope that this time he, and by he I mean we, can get one over on Goliath.
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