The Free Market is an interesting concept. Mainly, in that, it doesn’t work. The financial sector recently offered the best evidence into why greed isn’t always good, and why greed doesn’t benefit society, and why short selling and derivative betting isn’t productive in the long run. Banks, don’t seem to have learnt a thing since 2008, when Lehman’s collapsed. In fact, neither do Governments. Surely further regulation is required? Surely protecting the consumer from a continuously shrinking market, dominated by only several huge multinationals, is required more than anything? Because when you deregulate further, the consumer and ultimately society suffers, but it’s hidden away from us, because those with the money and the power benefit.
I, like most people, have store cards. It’s a wondrous way for the consumer to fall into debt, whilst shareholders for the company, make a fortune. Saying that, I knew that store cards are a bit of a con, and I went for it anyway. I was 18, and a little bit hungry for MORE of everything. One of these cards that I own, is for the clothing store River Island. The store cards and payments were controlled through GE Money, a part of GE Capital Bank Limited. On January 7th, 2009, GE Capital Bank Limited was bought out by Banco Santander SA.
Here’s where the free market system starts to play games with consumers.
Whilst with GE Capital Bank, the interest rate on my River Island Card, was sold to me at 16.620%, which in itself, is extortionate. Today, I received a letter informing me that my interest rate, under new management, was now 21.659%. I’m locked into this agreement. I didn’t sign anything to say that’s perfectly acceptable. I was told my interest rate would be at 16.620%. I have no choice now. I have to pay an extra 5%. There is no “choice” in this. I can’t switch to someone other than the increasingly strong and wealthy Santander.
This begs the question, why would Santander put interests rates on store cards up by 5%, when the base rate is so incredibly low? The only reasonable conclusion I can possibly come to, is that they know we’re locked into an agreement, they know base rates are at the lowest they’ve been for a very long time, they know how rich and powerful they are, and they want more wealth and more power.
The letter continues…
“Why has your rate changed“
Ah here should exist the answers to all my questions. Surely this next sentence will just read “Firstyly, because…. we own you! ahahaha. And secondly, because we’re quite greedy, and I want a new Yacht.“
Actually, what it does say, is a much more elaborate version of what I just assumed they’d write…
“We are committed to responsible lending and so we regularly review our customers’ accounts using our own internal data.“
Firstly, I didn’t want Santander to have my internal data, nor did I know they did have it, until almost 9 months after they acquired it.
Secondly, committed to responsible lending, by encouraging forcing me into much more debt than I was originally paying? REALLY?
Thirdly, what they’re trying to say is, over the past couple of months, i’ve been paying less per month, because financial troubles mean I need to save a little bit more…….which they don’t like…….so they increased my interest rate to force me to pay more….. which I can’t afford. Lower rate increases will affect those who have the money to pay more. Higher rate increases will affect those of us who can’t afford it. This will obviously please Conservatives and Republicans everywhere.
So, I decided to give “Tim Woods” the guy who signed my letter, the “Head of Customer Services, Santander Cards” a call. A lady answered and I asked to be put through to a Mr Tim Woods. She said “Oh no we can’t do that“. So I told her I wasn’t happy with this new interest hate hike that I had no say over. She told me she could explain this, and pretty much just said what was already written on the letter. So I asked again, to be put through to Mr Tim Woods, to which she replied “he doesn’t take calls“. The head, of customer services, doesn’t deal with customer services apparently. But he’s more than happy to deal with customer services, when it makes him a lovely bit of extra money, by signing my letter.
Whether it’s legal or not is irrelevant. I’m just not entirely sure how one can justify a 5% interest increase, when base rates are at their very lowest, and your company is making a fortune. At some point, a board of directors must have got together round a table, and agreed that putting their rates up by 5% on accounts that are struggling recently, is a great idea. It is that way of thinking, that bewilders me. It is exactly the reason that free markets do not work.
These are simple things that need to change. We as consumers (including me) need to get out of the habit of “owning” whatever we can. Home ownership causes misery. The culture of “you MUST own your own home!!!” needs to end. It has become an obsession. And if it doesn’t end, this kind of crises will never cease, there will always be problems. Secondly, if you’re “head of customer service” try to provide a service….to customers, rather than to the company. And lastly, the banks, and financial sector, which was deregulated largely in the 1980s by the Thatcher government, needs to be much more heavily regulated. It is the only way these immoral idiots are ever going to contribute a decent service to society, rather than to the board or shareholders.