Name: David Sheppard
Company: Perception Finance
When this story broke last week, it was met with a level of shock that was surprising.
We have been watching the banks try to secure more direct business over the last 12 to 18 months and this activity should be expected now.
Having once worked for a bank, the training was to ask for the business every time. To do anything else was deemed to be a development need and a sure way to prevent the next promotion.
The key difference in this circumstance is the timing. When a client who needs to provide certified internet bank statements to support a mortgage application approaches their bank for this service it should be realised that, in most cases, this will mean the application is already underway and fees are likely to have been paid.
With this being the case, to try and hijack the business could be open to question. Any bank asking their staff to try this should think very carefully about the potential consequences.
There is talk that outcome-based regulation is on the way, and I question whether the outcome of HSBC’s stance will be deemed acceptable if a client loses money by these tactics.
This opens up the question about the acceptability of internet bank statements to support a mortgage application.
Rather than penalising those that opt to avoid waste, lenders should all be looking to see how the modern era can be best embraced. I appreciate that this means additional anti-fraud measures.
Name: Jonathan Cornell
Company: First Action Finance
While I think that it is perfectly acceptable for banks to try to persuade their own clients to take out mortgages with them, there are many ways of doing this professionally.
In my view HSBC’s tactics remind me of a timeshare company’s sales methods.
It is understandable that banks and building societies will want to sell products to their clients.
Typically in an environment where many customers enjoy free banking, a bank will not make enough money from customers deposits to cover the cost of free banking, so it needs to make money by cross selling.
HSBC’s mortgage range has been competitive recently as it has been trying to build its lending by offering low rates, but it has been very picky about who it chooses to lend to.
There are plenty of ways to market a product to an existing customer through advertising and other methods before you have to resort to tactics like this. I cannot remember a more unprofessional way of trying to sell products to an existing client.
Presumably, many people who bank via the internet do not have time to spend hours in branches sorting out their affairs so to insist that they see a branch adviser before their internet bank statement can be stamped is incredibly inconvenient.
What happens if the adviser is not free when the client goes in? Does the client have to make an appointment and come back later? If this happened to me I would close my account down and transfer it to another bank that treated me fairly.
Name: Brian Murphy
Company: Mortgage Advice Bureau
I am sure that the issue of whether HSBC’s current practice of insisting on one of its own bank account customers being forced to meet with one of its own mortgage advisers will be considered sharp practice by the majority of mortgage intermediaries.
HSBC is attempting to ensure that customers in this position consider its own mortgage proposition.
The only reason that this potential selling opportunity has come to light is the requirement of a rival lender (in this case Woolwich) for a bank branch stamp and a sign-off to be added onto a particular internet account statement to prove its authenticity.
The customer may have already considered HSBC or may have taken independent advice and rejected the bank’s products.
The issue here is whether it is reasonable to expect a customer to need to go through another interview. If the customer will not be provided with this required authenticated documentation unless they meet with an HSBC adviser, that is unreasonable.
The reality is that whether we like it or loathe it, this practice is happening, and as brokers, we need to brief our customers accordingly and set the expectation that this practice is likely to occur.
However, if the broker has built the relationship with their customer appropriately, then the vast majority of clients will see this for what it is.
It is a cynical attempt for this bank to win business for itself, and I have no doubt that customers will reject the proposition.
