Friday 3 January 2014

No good turn goes unpunished

This is going to be a very quick moan, I promise.

I thought it was just me, but it turns out that all banks and insurance companies have been punishing people for being loyal to them for many years now.

Several cases have been highlighted of elderly people being charged over £3000 premium for their household insurance, simply because they have stuck to the same companies virtually all their lives. When they eventually got around to switching their insurers, their premiums went down to around £300 for the same - if not better - cover.

It makes you wonder what the logic is behind the shocking way that loyal customers are treated by the big money companies. Do they really want to lose business like this?

The answer is much more simple.

The number-crunchers have worked out that older people do not like change, and become confused with various tariffs and premiums on offer - deliberately confused, because the structure of them has been formulated to be so complicated to compare with others, that even highly qualified and experienced accountants cannot work out which is likely to be the best deal in the long-run, particularly since the deals change by the month, and all new offers are extended to new customers only.

In the case of insurance, the companies have had - by definition - many years experience with loyal, individual customers, and for the last 10 or 15, they have been simply upping the charges just to see what they can get away with. After a while, there is a cut-off point when even if you lose an old customer, you will have made more money from them than you would have if they had stayed loyal to you for the next 10 years on a reasonable rate. Like everything else, the short-term is the immediate goal.

This is going to sound really far-fetched, but I promise you that it taken very seriously by some respected analysts. All the big finance companies have discovered by accident that the best managers (i.e. the ones which make most money for the shareholders) will - if examined - show up somewhere on the spectrum of Asperger's Syndrome at best, and mild psychopathy at worst.

Both these conditions have two things in common: A single-minded approach to every situation, and an inability to relate to others in society in a normal, compassionate way. What a perfect combination for the administration of a perfect and perfectly ruthless business model.

18 comments:

  1. Huh. I'm just about to change my bloody bank account. All I do is put money in, then they spend it. My UK bank actually gives me money for the pleasure of having such a decent client; whereas my bloody French lot are just thieves. I'm thinking of changing my account to La Poste (post office).

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    1. Put it in my account - I'll spend it more wisely than those bastards.

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  2. Cro - a friend tried to pay her water bill at the post office and was told that she had to pay to do so - she went across the road to One Stop groceries and paid it over the counter and it cost her nothing. Be warned.
    I am sick of banks in general, who charge large sums in so called bank charges even if you never overdraw if it is a business account. For two pins I would keep my money in a tin under the bed.

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    1. I know someone who does just that - it's cheaper than running an account.

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    2. I still haven't made enquiries, but I think that over here they are a better option.

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    3. It's not much use when you need an overdraft though!

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  3. There's hope for OB's banking future then with the Aspergers. Who needs another car designer anyway?

    My mum is one of those non-movers but is with Saga, which I hope might be in her favour. I've h=just moved the car insurance from NFU to the AA, saving over £200. I feel an advert coming on....

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    1. sorry about the strange h= there. No idea what happened. Bloody keyboard.

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    2. I had Saga insurance when I hit 50, much to the amusement of my friends. For one year it was a good deal, and then they tried the usual tricks. I'm now with the NFU as well, though - surprisingly - they don't do shooting insurance, so I am with BASC for that - another fine organisation. The AA shat on me by sending a car insurance cheque back to me uncashed many years ago, allowing me to drive uninsured against my knowledge for about 10 months. For that, I never forgave them.

      As far as OB's future career is concerned, I don't know what to say.

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  4. While I generally heartily agree with your sentiments, we have been with M&S car insurance for three successive years because each time I got them to match the cheapest I could find on-line ( like for like to include RAC breakdown in UK and EU) . However at the most recent renewal the quote was about £45 less than last year - and we reduced it even further when we telephoned to make a minor change because we had reduced our annual mileage. So nearly £100 off the
    original very fair quote. So kudos to M&S in this case.

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    1. I'm with the NFU like Em, but I will look into M & S next time.

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    2. Like Em was, I should say. I should also point out that Alcohol Anonymous does not offer car insurance.

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  5. I hate insurance companies. Jennifer's "rat bastard" comment pretty much sums 'em up.

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    1. I quite like rats, I just wish they could - like fish - peacefully coexist with hoomans.

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  6. It's not just the financial institutions that prey on old folk.
    They are easy targets for every tradesperson, shopkeeper, and even close relatives who would swindle them out of their savings.
    The attitudes of the insurance companies, utility companies and so on just reflect the attitude of the average person in the street. That it's ok the cheat someone out of their money, to feel smug when the restaurant has forgotten to add the bottle of wine to the bill. How many people who would call the banks and insurance companies rat bastards would point out the forgotten wine to the waiter and pay up?
    You need to have your wits about you these days and suspect everyone of being a cheat and a thief, because they probably are, it's how we are all expected to behave in this "me first, sod you" society in which we all live.

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