A row has broken out between Halifax Bank of Scotland (HBOS) and broker Edge Tancred over allegations it is using "unfair leverage" to persuade business banking customers to purchase commercial insurance through the Bank. Managing director of broker Edge Tancred, Arthur Edge, alleges that HBOS approached several of his commercial insurance clients, in some instances asking to see pre-renewal work, including quotes, prepared by Edge Tancred.Edge said it also offered to undercut some of his clients' commercial premiums by 10%, an allegation denied by HBOS. Head of partnerships and commercial insurance at Halifax General Insurance Services Peter Thompson said: "At this time we are not aware of a 10% discount off competitor premiums being offered. We are currently exploring any existence of this and will be happy to come back once we have investigated this fully."Edge also accused BOS of using "covert pressure" to obtain data that it does not "require for banking purposes". This relates to a letter received by Edge Tancred, as an BOS business banking client, asking it to provide details of its business insurance cover, including renewal dates and premiums paid. The letter said the bank requested the information because "where business assets are pledged to the bank in support of borrowing facilities then it is a standard condition of lending that the bank is provided with details of the insurance cover held". But Edge said that as his company has "no assets charged to the bank" it did not require the information. He said that even if this were not the case, the bank "does not need to know premiums paid". The letter also asked customers to "agree that the bank may provide you with an alternative quote prior to your next renewal date".But Thompson denied any wrong-doing. He said: "We consider the letters currently sent to BOS banking customers to be entirely fair and reasonable in asking if we (BOS Commercial Insurance) can provide a commercial insurance quotation. "Under no circumstances is the customer obliged to have a quotation from us, and is under no undue pressure (receiving a BOSCI quotation is not a condition of any loan). "We are being totally up front and honest with our customers as to why we require the information, and this incident with the broker will not preclude us from continuing to write to other potential customers in this way."But Edge said as a result of the practices he plans to sever his banking relationship with HBOS and said other brokers should follow his lead.
Staff defect to rival HSBCThe allegation came as HBOS confirmed that 12 of its 37-strong field-based commercial insurance sales force have defected to rival HSBC. "It is correct that we have had some colleagues leave and they have gone to HSBC," a spokeswoman said. "We're operating as business as usual. We've used other staff to plug the gaps."She said that it was currently unclear whether the staff, who worked in the north of England and the Midlands, would be replaced.
