The National Council of Psychotherapists
All about banks
Have you ever received shoddy treatment or bad service from a Bank? Ever thought that they are too big to complain about successfully? Most people would answer yes to both of the above questions. Twice recently a certain bank charged me twice for failing to settle my account on time. Fine you say, I shouldn’t be so irresponsible with my finances. Ok, but here is the problem, I’d sent them a cheque twice, they had received them, and then, errrr, lost them both. How they lost the second one, which had been dispatched to replace the first one after they admitted losing it, one can only guess. As can be imagined, this involved me in a lot of time and energy to sort out their mess – after it was all over I invoiced them for my time, and they paid. They after all are very quick to send you a bill when you make a mistake so fair is fair.
Most therapists operate in a self-employed capacity. Most don’t know that they can (and should) invoice their banks for their time when the banks are responsible for the error that needs to be sorted out. The self-employed suffer particularly badly when their bankers make mistakes. Add to the stress and hassle caused by the original mistake, then double it when letters threatening your credit history start to arrive, and well, you can probably see where I’m coming from. If I make a mistake fine, I’ll pay up. The rule works both ways… After having spoken to colleagues over the years I sense that the banks have had it their own way for far too long.
Several self-employed clients in my stress management practices have also felt incredibly empowered when their banks suddenly took note of the fact that shoddy service wasn’t acceptable and that their weary customer would invoice them.
You would be forgiven for thinking that my main banking provider would be glad to see the back of me, but nothing like it. The service that I receive from both my business and personal bankers is top notch. It wasn’t always like that, customers also have the right to shop around…
Lets look at another area of banking - What exactly lies behind the credit card culture that exists in the UK today?
According to Price Waterhouse Coopers, UK credit companies lose around £1 billion a year to those small number of wily customers who take advantage of 0% deals. This band of customer will also regularly move their credit card debt from one credit card to another to follow 0% deals or cheaper rates. The money saving expert Martin Lewis is now predicting that zero per cent offers are likely to be withdrawn in the very near future.
How about your credit cards?
Did you know that the banks and other interested financial institutions have created the debt trap specifically with you in mind?
The credit card companies have one aim. They want you to be the equivalent of three months income in debt. That provided them with maximum gains and minimum risk exposure. Anyone more than three months income in debt becomes a risk in their eyes. People carrying too much dept may default or even declare bankruptcy - neither of these options is good for the lender.
The strange thing is though (unless you’re a lender), those who do get their dept under control and are therefore outside of the three month trap are suddenly not so attractive as a customer. If everyone did this they wouldn’t stay in business long. The three-month trap is insidious, and it can be very difficult to break free from. Some serious thought went into creating this situation.
Financially speaking most people can survive from month to month financially. However, those caught in the three months trap can't get themselves free from it.
The debt trap works brilliantly for the lender. But you can escape, there are no quick fixes but it can be done.
This introduces another surprising fact; most people have either a very poor or a very poor or non-existent picture of their own financial state. This is bad enough fro an individual, but consider how much worse this can be for the self-employed person when the end of year tax return comes around. An awful lot of therapists fail in their first years of business, not necessarily because they are poor examples of therapists, but more likely because they have no business acumen or can’t manage money.
Spend, consume, obey!
I passed this little bit of graffiti (above) everyday for a year once and it never failed to amuse me! And it is so true. Many people are in dept because they spend money on things that they simply do not need. It is not in our benevolent lenders best interest that we accept this simple little fact and start saving. The simple rule that governs here is:
If you can only afford to buy it using a credit card, then you can’t afford it at all…
Consider that it would probably take the average credit card holder between two and five years to clear their depths, and that is only if they stop spending on the never never!
The next time someone does you a favour by accepting your credit card application, ask yourself about the psychology involved in convincing you that it is they who are helping you out!
The more clients we can help to avoid this trap the better…
Michael O’Sullivan FNCP