BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

I think this is the right place for this. We are hearing noises coming from Jeremy Hunt about a ring-fenced tax to fund the NHS. It appears that the message has got through to the government and of course with the May elections looming they want some better news about the NHS.
But there is a problem, the Treasury. They hate any restrictions on tax take which stops them diverting money from one account to another. Look at the example of the old Road Fund Tax which was supposed to be a hypothecated tax, the proceeds of which would be devoted entirely to maintaining roads, it never happened, the money was diverted to the general account over time. They will fight tooth and nail against Hunt's proposals. Meanwhile, it has been proved time and time again that this type of dedicated tax would be very popular with the majority of the public, the LibDems were the last party I think to raise the matter.The internal problems in the Treasury should not be allowed to interfere with what is so obviously a good solution.

[Tizer]

And the banks claim they are secure!
`Billion euro cyber-suspect arrested in Spain' LINK
`A cyber-crime mastermind suspected of stealing about £870m (€1bn) has been arrested in Spain. The individual is alleged to be the head of the organised crime gang that ran the Carbanak and Cobalt malware campaigns that targeted banks. Europol said the group had been active since 2013 and infiltrated more than 100 banks in that time. Cash was siphoned off via bank transfers or dispensed automatically through cash machines.....The cyber-thieves got their malware on to bank networks by sending key staff booby-trapped phishing emails, said Europol. The gang used three separate generations of malware, each one more sophisticated than the last, to penetrate and then lurk on financial networks.'

[Stanley]

What make that even worse is that as Janet once told me, malware algorithms behave exactly like ordinary algorithms used for legitimate purposes. They self replicate and invade other sections of the system and getting rid of all of them is not an easy matter of simple seek and destroy cleansing. In really bad cases the only way to make sure a system is clean is to replace it by a new one on new drives that have re-written data. but that's expensive........ She said that most systems in use are heavily modified versions of the original ones and over the years have grown to an enormous size. What's need are new smaller and more simple systems but again, that's expensive.....

[Tizer]

...She said that most systems in use are heavily modified versions of the original ones and over the years have grown to an enormous size.

That's another aspect of what I call the `Microsoft effect'. From the beginning MS didn't rationalise and keep its software elegant and simple. The kids doing the work simply added more and more code without removing old code. They forced this effect onto other people too. A glaring example was the MS application for writing HTML web pages - I think it was called Front Page. When I wanted to create our business's web site I was determined to do it myself and looked at Front Page. The application used far too much unnecessary code and made bloated web pages that were slow to load. Instead I learnt HTML and wrote all the code for our site. Even in those days of very slow Internet speeds the site I wrote myself would load in a couple of seconds. I used a small fraction of the amount of code that Front Page used.

[Stanley]

Well done you Tiz! And thanks for confirming for me that Janet knew of what she spoke! Perhaps that's why she was paid so much and had enough money to look after me even after she was gone! We need more Janets!!

[Tizer]

I guess the problem began when demand for software design snowballed in the 1990s and thousands of youngsters were recruited who'd never had training in anything other than school and their own computers. They hadn't been taught the need to be concise or elegant in their work. If they'd moved into, say, architecture and you'd asked them to build you a better house they'd have just bolted on extra bits - if you wanted another loo and shower you'd probably get an outside privy!

[Stanley]

Good analogy, that's exactly what happened......

[Stanley]

Thinking about computer systems and my £500 gas and leccy bill. This must be quite common and must be an enormous hidden debt as most people will be on the same sort of DD scheme. There must be a reason why this is allowed to happen as it can't be good business practice from the standpoint of cash flow. It's a bit of a puzzle and I suspect that behind it there's a cunning wheeze!

[Tizer]

This October 2017 Guardian article describes the large debts accumulating due to energy companies not keeping track of how much customers' owe them. There's no explanation of why it's happening. LINK Like you, I smell a rat. Incompetence could be involved but surely it wouldn't account for so many companies doing the same thing? There must be a cunning wheeze hidden somewhere, probably a smoke & mirrors accountancy trick. Of course, our debt is their credit and it can be seen as positive for a company to have many debtors these days. Think of all the US mortgage debt being sold on by banks in the mid-2000s.

Thinks...I wonder if the energy companies are hoping to sell on the debt and leave someone else to collect it? It reminds me of the Student Loans Company maximising debt so they can sell it on. That makes my hackles rise, grrrh!

[plaques]

My immediate thoughts are that customers who are in debt are less likely to change providers. Take Stanley's as an example. Change your supplier to us (New supplier) and save £30 a year. (Old supplier) No problem that will be £500 please. 'Err', better stop where I am.

[Stanley]

I agree with both of you, something fishy about it. The lady I spoke to said they had many customers querying the fact that their DDs had been cancelled, I have to believe her. That being the case I favour a move by BG to get the amount in some accounts down to a more manageable level. But we can't know. All I am certain of is that having bitten the bullet I will be straight with them from now on each month. If not, the fur will fly!

[Stanley]

Did I hear aright this morning when I heard an expert saying that the end bill for PPI compensation could be £50billion? Billion? He estimated that only a third of this has been paid out at present and that's why the animatronic head of Arnie is due to return to the TV in another campaign.

[Stanley]

The LIBOR scandal is still evolving. New evidence is emerging that is leading to questions about the original investigation. It looks as though some witnesses may have perjured themselves and questions are being asked about the disparity between the penalties imposed. One man gaoled for 11 years but what looks like equally culpable defendants getting off scot free. I have long held that there is a degree of protection and collusion in these matters and a few executives in handcuffs could be a useful warning to current Lords of the Universe, at the moment I suspect they imagine they are invulnerable.

[Stanley]

See THIS for a BBC report on the firing of Deutsch Bank's CEO as the share price struggles due to a rash of embarrassing scandals. The Lords of the Universe are not invulnerable.

[Tizer]

And it's only a few weeks since I posted this...

The bosses at Deutsche Bank are going to get massive bonuses even though the bank has been making even more massive losses in the last few years.

Another bank problem...a couple of men have been caught and sentenced for visiting banks and tricking the staff into merging two accounts, one belonging to them and the other to the victim, then immediately using the money to buy Rolex watches. The judge was surprise the bank staff let it happen and he said it brings into question the security at Britain's biggest banks. The newspaper story didn't include any names of banks.

There's also HSBC clawing back pension money from many of its staff as reported on Money Box. Grrrh!

[Stanley]

I heard that report about HSBC Tiz and it is shameful. They must have no worries at all about the corporate image they project.

[Stanley]

We learn more about the failure of the Trustee Bank's systems which it appears is much more serious than was originally projected. Some systems could be out of service until the summer.
There was an interview this morning on Today with a very credible witness who seemed to me to know what he was talking about. It appears as though the doubts we have aired from time to time about the dangers of keeping adding new functions like mobile phone banking on top of archaic systems have been correct.
At one time, my children, Harry and Janet thought they were reaching their sell-by date because their expertise was in what was seen to be an obsolete language, COBOL. As it turned out they were wrong on two counts, COBOL could do things that the modern languages couldn't and COBOL systems have to be serviced and added to.
The expert this morning said that the old bank systems are written in COBOL and the big problem is a shortage of software engineers expert in the language. What they are having to do is layer new functions on the old in a different language with an interface between that theoretically enables the two components to talk to each other. Unfortunately this is a very difficult field and throws up too many unforeseen problems. He said this was essentially what has happened to TSB and it's a big problem.
Janet told me not all that long ago that this problem was coming and will get worse. She said the only way round it was to completely re-write the programmes, set them up on new hardware and transfer the historic customer data to them and then test them almost to destruction. This is very expensive and it looks as though the banks are going to have to bite the bullet. God knows they can afford it!

[Tizer]

The bosses will persist with the same old systems and patches knowing that they'll soon be able to retire on big pensions.

Elsewhere on the planet that bankers inhabit...
`Barclays boss Jes Staley faces £1m hit after hunt for whistleblower ' LINK

[Stanley]

"“This was an opportunity for UK regulators to say they will protect whistleblowers, and they blew it,” Erika Kelton, a partner and whistleblowing attorney at Phillips and Cohen, told The Telegraph."
I listened to a report on this case on R4 Tiz and I agree with the lady attorney. It isn't just a banking problem it's endemic in other professions and particularly in the NHS. Read MD in Private Eye......
The CEO of TSB was grovelling on TV last night but I suspect it's a racing certainty that his IT people have flagged up the fact that patching the old system or overlaying it on a new one won't work. The question is were they listened to? Perhaps we need mandatory inspections of systems like the audits on financial aspects of the business. If the results of that were made public the blame could be moved to where it properly belongs and not dropped on the old standby of 'human error'. Bit like the use of 'pilot error' by the RAF at times.... There have been some very dodgy cases.

[Tizer]

It's worth looking at this story just to see the `delicious irony' of the first graphic!
`TSB drafts in outside help to fix IT chaos' LINK

[Stanley]

Good link Tiz. I am watching the TSB story unfold and heard yesterday that 'the IBM specialists' had been called in. (Guess what their hourly rate will be!) I don't think that Janet's scenario is a million miles away from the truth but the question that was posed yesterday was why was there no plan 'B' enabling them to revert to the old system. Quite right! I suspect that the software engineers would have argued for that but some Line Manager has vetoed it on grounds like time or expense. Remembering what Janet did when transferring the high security data system of the WA police to a new platform, Ideally they would have a brand new, totally discrete set of hardware and new programming built, loaded it with dummy data and tested it almost to destruction before Der Tag when they removed the current data from the old system and loaded it onto the new, proven system. The last action was to physically destroy the old hardware and programming. This is of course slow and very expensive but the result is genuine 'state of the art'. We will never know the full story but you can bet that somewhere someone has been looking at an 'economical' upgrade. It's this mindset that is wrong. In the end the cheap upgrade is going to cost as much, if not more, than a new system.
The other thing that strikes me is that TSB are not alone, other banks and large systems have this same problem, including government. I'd recommend that they should go to the Western Australia police and Fujitsu (Janet was a contractor for them) and ask them how they did it and what they learned. It seems to me that on a smaller scale they made the right decisions, appointed the right manager and gave them unfettered power and bit the bullet on the cost.
As for the CEO, it's an Amber Rudd situation, the buck stops with him and as soon as possible he and the other lax managers should be fired to 'encourage les autre'.

[Big Kev]

Any system upgrade will have a fall back position, I suspect something else has gone wrong. I don't believe it would have been an issue for this long if it was a 'fault' with the upgrade. If they're calling in 'IBM Specialists' it's got to be a hardware issue.

[Stanley]

I wonder if anyone flagged it up and was told the solution was too expensive.......

[Tizer]

`More bank computer chaos expected' LINK

[plaques]

We are told Ad nauseam that with the advent of 'on-line' banking there was no call for local branches. The truth is that by closing branches it would drive customers into 'on-line' and save £millions by getting rid of people on the desks. Don't expect these branches to re-open, long suffering customers will just have to put up with the third class service that's on offer. Even if fines and penalties were introduced these would come out of 'profits' which would then result in higher charges. Any fines should be paid by a direct reduction in any salary and bonuses of the directors and top management.