Lloyds TSB will stop selling packaged account in its branches from 1 January 2013, until its sales procedures are brought into line with those operated by sister bank The Halifax.

Lloyds TSB is one of the main providers of packaged accounts in Britain, with around one in three of its customers choosing to pay fees ranging from £9.95 to £25 a month for an account which includes extra services such as travel insurance and breakdown cover.

Its decision to postpone the sale of these accounts in branches will not affect customers who already have a packaged account

The bank denied that the decision was related to new Financial Services Authority (FSA) regulations on packaged accounts, which will be introduced in 2013.

The new rules, which follow recent scandals in which customers were mis-sold financial products, will require lenders to ensure that customers are eligible to claim on any insurance included in the package.

A spokesman for the bank said: “It is not about the Financial Services Authority or mis-selling, it is about moving to a unified process within the group.”

The FSA has called for an end to the practice of incentivising staff to sell products such as packaged accounts, as this is believed to have led to mis-selling.

Currently Lloyds TSB branch staff will recommend a packaged account to a customer, whereas Halifax branch staff will provide information but are not allowed to recommend a product.

Lloyds TSB customers will still be able to sign up for a packaged account online while the changes are brought into effect.

Earlier this month consumer group Which? published the results of a survey suggesting that Lloyds Banking Group, RBS and Barclays have continued to pressure sales staff to sell more, despite the mis-selling scandals.

Peter Vicary-Smith, Which? chief executive, said: “Our survey reveals the stark realities of the sales culture that still exists at the heart of the banking industry.

“Senior bankers say the culture is changing but this shows it just isn’t filtering through to staff on the front line who remain under real pressure to put sales before service, even after incentives are taken away.”

New research from the Halifax suggests that savers are funding their Christmas spending with money set aside for other purposes.

Thirty-seven per cent of 2,138 savers surveyed by the bank at the end of November had withdrawn savings in the last three months.

The average amount withdrawn was £1,186, more than double the average savings of £555 made by 75 per cent of respondents to the survey over the same period.

Richard Fearon, Head of Halifax Savings, said: “Raiding your savings can sometimes be inevitable, but in the run up to Christmas the data shows the average amount being raided from savings is much higher than the average amount being saved.”

Twenty-three per cent of respondents said they had raided their savings to pay for unexpected costs such as emergency repairs to their property or car.

Eighteen per cent had used savings to fund a holiday and 16 per cent had used savings because their current account was overdrawn.

The survey found that lower earners withdrew a greater proportion of their income than higher earners.

Those earning between £10,000 and £14,999 per annum saved an average of £772, equivalent to 2.5 weeks wages, and withdrew an average of £983.90, equivalent to 3.5 weeks wages.

In comparison, those earning between £30,000 and £49,000 withdrew £1,532.40, equivalent to 1.5 weeks wages.

The survey also highlighted regional variations in savings habits, with more people in north east England raiding their savings in the last three months than in other regions.

Over this period, people in the north east withdrew an average of £976 of their savings, while putting away just £228.

People in the north east also have the lowest level of savings at an average of £11,951, while Londoners have the highest regional average of £22,366.

Although this Christmas hasn’t even arrived yet, lenders are already urging people to open a savings account to fund next year’s purchases.

Skipton Building Society is offering a Christmas Saver account paying 2.4 per cent interest on monthly savings up to £250 until November 2013.

The account then reverts to a regular easy access account.

Principality Building Society offers a Christmas Savings account paying a slightly higher rate of 2.8 per cent on savings of between £20 and £500 per month, again until November 2013.

Monmouthshire Building Society offers an interest rate of 2.25 per cent, including a 1 per cent bonus rate, on savings of between £1 and £1,000 each month.

The account offers instant access during November and December but withdrawals can only be made earlier in the year by closing the account down.

Consumer group Which? is advising people to check out regular savings accounts before opting for a Christmas savings account, as they can sometimes provide a better deal.

According to a survey by the Payments Council the problem of having to remember a different password for several accounts means that many internet users are compromising the security of their financial data.

Internet users have 22 password-protected accounts on average and many use the same log-in details for more than one account, even though this is a greater security risk that using unique passwords for each account.

The problem is that people struggle to remember passwords, and therefore choose passwords that are easier to remember, even though they don’t give adequate protection, especially when it comes to online banking.

Almost a third of those surveyed said they never changed passwords and many shared their passwords with other people.

Birthdays, addresses and partners’ names are all popular password choices, even though these are easy to guess.

The Payments Council, which is responsible for ensuring that payment services work in the UK, carried out the survey as part of its education campaign, PayYourWay.org.uk.

It has published its top tips for password security on its website.

One of its more creative tips is to use the first letters of a song lyric such as the The Grand Old Duke of York, he had ten thousand men’, which would give the password of ‘TGODoYhh10000m!’

The combination of lower and upper case letters, numbers and symbols makes this password difficult to crack and using the initial letters of a sentence know only to yourself would make the password even more secure.

However this doesn’t solve the problem of having dozens of passwords to remember, and people with many passwords might benefit from using password manager software.

Password managers create random, strong passwords for each site, but the user only needs to remember one master password to access them all.

Some password managers also automate the process of entering passwords and other data into websites.

The Nottingham and Shepshed building societies will merge in July 2013, with Shepshed’s three branches being rebranded under The Nottingham name.

Shepshed Building Society, which has branches in Shepshed and Loughborough, Leicestershire; and Ruddington, Nottinghamshire, has struggled to grow in the face of economic downturn and increased competition, prompting it to seek a merger.

It has assets of around £93 million and 7,000 customers, compared with the Nottingham’s much larger assets of £2.4 billion and 200,000 members.

Members of Shepshed Building Society will not receive a windfall as a result of the merger.

The building society’s directors will resign when the merger takes place, but no jobs will be lost and the three branches will remain open for at least three years under the terms of the deal.

The Shepshed’s mortgage borrowers and savers will remain on the same rates and will be able to use all of the Nottingham’s branches.

David Marlow, chief executive of Nottingham Building Society, said: “The board of Shepshed believe its members’ interests will be best served by being part of a larger society.

“We are looking to forward to giving their members access to our full range of products and services.”

While the Shepshed’s members will miss out on a windfall, members of Barnsley Building Society look set to receive an unexpected bonus.

The Barnsley merged with Yorkshire Building Society during the financial crisis, after it believed it had lost £10m deposited with two failed Icelandic banks .

Under the Yorkshire banner, it has now recovered £8.8 million in total from Kaupthing Singer & Friedlander and Heritable Bank and is returning money to savers as it promised to do at the time of the merger.

The Barnsley’s savers will receive 3.31 per cent of the savings they had with the building society on October 21 2008, up to a maximum of £5,000, while borrowers will receive a flat payment of £250.

“The Yorkshire made a commitment at the time of the merger to pursue recovery of these investments and, if successful, consider an ex-gratia payment from the proceeds to eligible Barnsley Building Society members,” the building society said.

“The Yorkshire is confident that £8.8m is the largest possible amount it could reasonably expect to be recovered from the investments.”

The Funding for Lending Scheme (FLS), launched by the Bank of England and the Treasury this summer, has caused a sharp fall in the number of accounts available for savers, according to Moneyfacts, a leading provider of personal finance data.

FLS is designed to increase the availability of mortgages and business loans by providing banks and building societies with £60 billion of low-cost funding from the Bank of England.

The more they lend, the more they are allowed to borrow, and those that increase their lending pay the lowest fees.

While FLS has been effective in increasing the availability of mortgages, it has also reduced the need for lenders to attract funds from ordinary savers.

The number of savings accounts including Isas has fallen by 15 per cent to 2,038 this year, Moneyfacts says, with over half of them being withdrawn last month.

It expects the current low interest rates on savings accounts to persist for four more years.

Moneyfacts Publishing Director, Sylvia Waycot, said: “Moneyfacts research shows the devastating effect that the Funding for Lending Scheme is having on savings and there seems to be no sign of any let-up in the misery that is sure to be inflicted on the nation’s savers.

“Providers are no longer just cutting savings rates as they were a month ago, they are now pulling entire products as they find that constantly reducing rates is not enough to remove them from ‘best buy’ tables.

“Of those products left, many offer reduced rates that barely match the Bank of England base rate,” she added.

The base rate stands at the historically low level of 0.5 per cent.

Yesterday, the Bank of England decided to keep interest rates at the same level and to hold off on launching a further round of quantitative easing (QE), despite concerns that the economy is contracting again.

This has led to speculation that the Bank is pinning its hopes on FLS to boost the economy and has lost faith in the effectiveness of QE.

HSBC has received a record $1.9 billion (£1.2 billion) fine from US federal and state authorities after its poor money laundering controls allowed it to be used as a conduit for drug barons and nations on which sanctions had been imposed, including Iran.

Following a multi-agency investigation HSBC was charged with violating sanctions by transferring billions of dollars for sanctioned nations and for enabling Mexican drug cartels to launder money.

It was also charged with working with Saudi Arabian banks linked to terrorist groups.

It has signed a Deferred Prosecution Agreement for breaking the US Bank Secrecy Act, the Trading with the Enemy Act and for money laundering offences.

In a statement, Lanny A Breuer, head of the Justice Department’s criminal division, said:

“HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries”.

The bank admitted to having poor money laundering controls and apologised.

It has invested $290 million to upgrade its systems to prevent money laundering and has appointed new senior management.

Meanwhile, in the UK, the Serious Fraud Office has arrested three men in connection with Libor rate rigging.

It is believed that a former trader at Citigroup and UBS is one of the men arrested for allegedly manipulating Libor, which is used in global financial transactions.

In a statement the Serious Fraud Office said: “Three men, aged 33, 41 and 47, have been arrested and taken to a London police station for interview in connection with the investigation into the manipulation of Libor”.

The Serious Fraud Office started its investigation in July after Barclays was fined £290 million over Libor rigging.

Northern Rock customers could receive a windfall of around £1,700 because of an error in the wording of loan statements.

The mistake, made by the nationalised part of the bank, will cost UK taxpayers a total of £270 million.

Up to 152,000 customers who took out personal loans of less than £25,000 will receive an average of £1,775 because information was omitted from annual statements following a change in rules on loan paperwork.

An investigation by UK Asset Resolution, which manages rescued banks for the government, discovered that the statements failed to include the original amount borrowed and paragraphs of mandatory wording were written incorrectly.

The failure to implement the rules correctly occurred after the bank was rescued by the government during the credit crunch, and taken into state ownership.

As a result of the mistake, customers will be refunded all interest charged on the loans since October 2008.

Richard Banks, the chief executive of UK Asset Resolution, said: “Northern Rock Asset Management is acting in accordance with its legal responsibilities and we are determined to do the right thing for customers and the taxpayer.

“We will be writing to all customers who are affected and advising them on next steps.”

In separate news, bank regulators in the US and UK are preparing to reveal plans for dealing with failing banks.

New cross-border regulations are expected to require shareholders and creditors in both the US and UK to take losses and to ensure that banks hold sufficient capital to protect taxpayers in the event of a failure.

The plans are outlined in a joint paper issued by the Bank of England with the US’s Federal Deposit Insurance Corporation.

Consumer group Which? claims that bank staff are still under pressure to sell products to customers, despite the recent scandals over mis-selling.

Mis-selling of Payment Protection Insurance (PPI) has cost banks over £10m in compensation to customers, but bank staff are still being driven by sales targets and incentives to sell products to customers.

According to new rules, staff incentives should now be based on clear criteria related to customer service, rather than sales targets, but in the Which? survey, 65 per cent of sales staff said that pressure to hit sales targets had actually increased.

Which? surveyed 500 sales staff at HSBC, RBS, Lloyds, Barclays and Santander.

Peter Vicary-Smith, Which? chief executive, said: “Our survey reveals the stark realities of the sales culture that still exists at the heart of the banking industry.

“Senior bankers say the culture is changing but this shows it just isn’t filtering through to staff on the front line who remain under real pressure to put sales before service, even after incentives are taken away.”

Of the 500 people surveyed by Which? 50 per cent said they were aware that some of their colleagues had mis-sold products in order to hit targets.

Which? will release its findings to the Parliamentary Commission on Banking Standards, the Financial Services Authority and MPs.

The consumer group is calling on banks to follow the example of Barclays and The Cooperative bank which have restructured their incentive schemes in order to focus on customer service.

Which? followed up its research by interviewing bank customers and four in 10 said that when they last contacted their bank they were offered a new product or service that wasn’t suitable.

A quarters of this group said they felt pressurised to accept the product or service being offered.

In a programme to be broadcast this evening, Dispatches will claim that in 2006, high street banks directed customers to a call centre run by card insurance firm CPP to activate or confirm receipt of new cards.

In November 2012 CPP was fined £10.5 million by the Financial Services Authority (FSA) for widespread mis-selling of insurance products.

CPP’s number was printed on new cards sent out by banks such as Barclays and Natwest, raising concern that customers may have been sold unnecessary card protection insurance when phoning to activate their cards.

Undischarged bankrupts should find in easier to open a basic bank account when changes are made to insolvency law.

Barclays is the only bank still to offer basic bank accounts, which allow customers to pay in wages and any benefits but do not provide other services such as overdrafts.

Basic bank accounts were offered by the Co-op until September, when they were withdrawn over concern that it was accepting an unreasonable amount of bankrupts as customers because other banks were failing to serve this group.

Most banks do not provide the accounts because of the risk that they could be sued if a bankrupt used their account to spend money on which creditors might have a claim.

The Co-op’s move has prompted the government to go ahead with plans to introduce legal reforms to reduce this risk.

Consumer Minister Jo Swinson said: “Having access to a bank account means being able to make vital transactions quickly and safely, avoiding the risk of carrying around large sums of money.

“Most of us take these everyday tasks for granted, but for bankrupts attempting to make a fresh start, they can be a whole lot more stressful.

“Insolvency law can also cause difficulties for the banks, so that’s why we’re amending it to help them offer more accounts to bankrupts,” she said.

In a consultation on changing the law, which took place in 2011, the government found that only 27 per cent of people were allowed to keep their bank account after they were declared bankrupt.

Fify-five per cent found it difficult to open a new account and 18 per cent were unable to open an account at all.

The proposed reforms have been welcomed by the Co-op.

Robin Taylor, the Co-op’s head of banking, said: “We withdrew from offering access to un-discharged bankrupts earlier this year with a heavy heart and believe that it is imperative that these changes encourage immediate action from other account providers on this issue.

“We will be monitoring the market closely to see what impact these changes have and would urge banks to voluntarily amend their policy whilst legislation is changed.”

New research by Credit Action has found that UK personal debt stood at £1.4 trillion at the end of October.

Average household debt, excluding mortgages, stands at £5,934.

Santander is introducing changes to its terms and conditions which could leave victims of card fraud without compensation if the bank can show they have been negligent.

Santander’s customers must use a unique four-digit PIN number on each of their credit and debit cards.

Using the same number for several cards can be considered ‘negligent’.

The numbers used must not be a date of birth, or other easily guessed numbers.

Customers must also shield their number when entering it into an ATM or terminal, and CCTV footage may be viewed to see if customers have been careful.

Customers who use a mobile phone for transactions must use a passcode to activate the handset.

It is expected to other banks will follow Santander’s example and introduce the changes from January next year.

If banks can show that customers have been negligent they may be able to refuse to refund losses.

Card fraud increased by 9 per cent in the first half of this year to £185 million and levels of card fraud tend to increase during the festive season.

As well as fraud occurring at ATMs and terminals, online fraud is also a major problem.

Payzone, which provides payment processing and card acceptance terminals, is warning shoppers to aware of possible scams.

The UK is one of the top three targeted countries in the world for credit card fraud, and suffered 69 per cent of all phishing attacks worldwide in August this year.

Phishing scams mis-direct customers to fake website, where they are invited to enter credit card details which are then stolen.

Steve Almond, Head of Card Acceptance, said: “Never click on any suspicious links, always check the security certificates of any websites that you’d like to shop at, and make sure your accounts are secured with a strong password”.