Lloyds Launches New Switching Offer As Share Prices Dip

Lloyds Bank has announced a new switching offer to entice customers to the bank, with a £100 bonus to be paid after just 10 days of opening the account.

Customers who take advantage will also enjoy some attractive interest rates on their savings, although the offer is for a paid account.

It comes as the Lloyds Banking Group shares dipped to a five-month low this week following the news that the bank was to be sued by 150 people over mortgage losses.

Aim To Attract More Customers

Many banks offer switching bonuses to customers in order to attract them to join, especially with the ease of the Current Account Switching Service. Traditionally people don’t move banks often — they wish to build up a strong credit score, or if they are unaware of the CASS then they think it is too much hassle.

Lloyds Bank’s £100 offer is similar to what high street banks have offered in the past, but the 10 day limit is unusually fast — payments are often deferred by 1–2 months in order to ensure customers don’t bounce between banks to rack up the bonuses.

The key thing to note is that this offer only applies to the Club Lloyds or Club Lloyds Platinum accounts. The Club Lloyds account has a £3 monthly fee, although this is waived if customers pay in more than £1,500 every month.

(Technically, you can reach the deposit limit by withdrawing and depositing the same funds repeatedly, although this may be frowned upon if you are identified).

The Club Lloyds Platinum account has a monthly fee of £24. Both accounts have various benefits including cinema tickets and cashback at certain stores. Lloyds Bank also said that new customers will get a three-month fee-free overdraft facility.

Another plus point is the interest rates that are being offered with the accounts. Customers will be paid 0.6% interest on any balances up to £3,999.99 and a generous 1.5% for money between £4,000 and £5,000. This is higher than most other high street banks are currently offering.

Homeowner Lawsuit

This new offer comes as the Lloyds Banking Group, that oversees Lloyds Bank, has been informed of a lawsuit being brought by 150 homeowners who took out mortgages with the bank in the 1990s.

The plaintiffs in the suit are claiming that they have lost thousands as a result of the loans being “fundamentally unsuitable” and “inherently unfair”. One customer has reported owing Lloyds £1.6 million on a £187,000 loan.

So far the bank has refuted the claims, saying that all borrowers were given independent legal and financial advice before committing to the loans. The lawsuit is set to go to the courts in October.

As a result, the share has dipped to 41.88 pence earlier this week. It is not a panic sign yet — it is just a 2.5% drop — but a negative result in the lawsuit could see the share price hit further.