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A warning against using Lloyds TSB as your business bank

I’ll be honest, it’s not just Lloyds TSB that are bad. When I started up, my company was a body for me to freelance through, and I didn’t need much from a bank. No overdraft, no additional facilities. Nearly three years ago, I approached them to ask for a business overdraft, having decided to take the business full time, and they said “No”. Lloyds TSB came to the rescue and provided the vital lifeline that got me on my way.

It didn’t last. I had a bank manager I could call, on his mobile if needed, and ask questions of. All great, until he left and I was sent a letter saying I now didn’t have a bank manager, but a relationship manger who was based 200 miles away in Leeds, and who I couldn’t just meet with and discuss the business as and when needed. That seemed just about OK to me, until just before Christmas last year when it all got a bit too much to deal with.

I’m sure any of you with Lloyds, and some of you with other banks, have seen these Chip and Pin card readers that are being sent out to customers on the premise of increased security. You put your card in and enter your PIN along with various other pieces of information to put in theoretically unique codes, which, depending on the bank, let you perform various tasks – logging in, paying people, and so on. Well I got sent one just before Christmas, and when I did, I dutifully put the details into the online banking platform provided to me by Lloyds TSB. It promptly locked me out. The code which I entered was somehow invalid, despite being the same as what was on my little card reader device. First bad experience. I build web applications. That’s just shoddy.

A short, but what should be unnecessary, call to telephone banking sorted that and I was on my way. Or so I thought. I have staff to pay, and I have freelancers too. So whenever I want to pay one, each and every time, I have to enter my PIN number to sign in, then enter my PIN again, the account number and amount of the payment in order to get a code to enter on the site to make a payment. I’m told this is to enable Faster Payments. I personally bank with First Direct and Faster Payments works just fine without this ridiculous mechanism that just makes my life a chore. It’s security by obscurity, and doesn’t prevent fraud because people can still swipe my card if I’m in an unscrupulous shop or restaurant for instance.

So I tweeted. And to my surprise Lloyds TSB responded! I sent a private message and a few minutes later I was talking to someone on the Lloyds TSB Twitter team over the phone. The only part of the entire business it seems that wants to try and help. I’ve been informed that by applying for Bulk Payments, which requires me to apply for a credit limit, I can avoid all this fuss. Shame I can’t avoid the fuss caused by not being able to get anyone to actually make Bulk Payments available on my account. It is apparently supposed to take a couple of days, and I gave a bit of leeway over Christmas and New Year. 3 weeks in though I’d expect to have either got it on my account, or to have heard something. So I tweeted again saying nothing had been done, and I was duly informed that my relationship manager would contact me asap. Well he’s supposed to have contacted me three times now, and I’ve not heard a word from him. So I now have a bank that doesn’t care about what its users have to say, or even about servicing them in any kind of way.

That’s where we are to date. I’ll keep you posted on anything else that happens, but I think I’m off to HSBC with my business banking. If you have a business, you’ll at some point ask your bank for something or other, however small it may be. I’d strongly urge you to avoid Lloyds TSB like the plague. They just don’t care. About anything or anyone.

Update 19/01/2011: Well I heard from my relationship manager today. Finally. Apparently my application hasn’t even been processed in any way shape or form. I’m now being asked to send previous two years of accounts to them, despite them being MY BANK and having full access to all of my finances for this entire period. By Fax. Which I don’t have. Because I’m not 90 years old.

And apparently, Bulk Payments doesn’t actually alleviate the need for the card reader. It just means you only need to enter it once per set of transactions made through it. And the application is processed like a business loan. And lets me go over my predefined overdraft limit. This feels like more of a problem than it sets out to resolve. So here’s to some more waiting once I’ve sent my details over and here’s to HSBC who are about to become my new business bank.

I’d like to hear about anyone else’s experiences with these kinds of things. I’m sure I can’t be the only one!

Update 01/02/2011: Turns out if you report your card due to fraudulent activity, Lloyds stop you using their online banking service.