(July 14 – 12:20 ET) – Barclays Bank is set to introduce risk-priced consumer loans, a move that is creating some controversy.
Barclays intends to offer better loan rates to less risky customers. This sort of price discrimination is a first among the world’s big banks, but others are expected to follow.
So far, a few small lenders have adopted risk pricing, and a British online bank has done it, too, but analysts now expect the big banks to start following Barclays.
Global banking giant HSBC is reportedly considering a pricing system that would give better deals to customers who generate more profit for the bank.
Consumer groups are already complaining that it could be discriminatory against low-income clients. Barclays though says it will not be using credit agency data to gauge risk, instead using its own account information to classify clients and set prices.
-IE Staff