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Capital Letters

Co-op's account rebuff was due to identity theft

In October, I wrote to the Co-op Bank to become a joint holder on my wife's account. The Co-op declined the application.

The bank said it was something to do with my credit rating at Equifax.

In November, my wife wrote on my behalf stating she had been a good customer for over 30 years and she needed me on the account because of her physical disability. The bank again said no.

I sent my £2 cheque to Equifax in mid-November but heard nothing from them. I wrote again just after Christmas but only got a reply in January after local trading standards became involved.

Eventually, Equifax said I had opened and closed a store account but also that I had been active in mobile phone stores. I do not have a mobile phone.

Despite more phone calls and letters, Co-op Bank still refuses to allow me to go onto the account. Can you help?

CS, Enfield

· The Co-op once advertised itself as the "caring, sharing" bank. But in your case, it's the scaring, snaring bank. Despite your wife's long record of perfect account behaviour, the Co-op chose to put unquestioning faith in a fraud-ridden Equifax report.

And when you and your wife protested - including letters to the chief executive - it failed to act. Instead of suspecting fraud or an error, it persisted with its computer-based approach. It told Capital Letters you had recently.....continued below

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moved - but as Co-op records show, you have not moved for over 30 years - 42 years to be precise.

Banks need to check customers for credit-worthiness. Reference agencies such as Equifax and Experian help. But, as the Co-op knows, computer references should not preclude common sense. It can over-rule Equifax.

You are the victim of identity theft. Someone stole your name but not your age - you were born in 1932 while the thief gave a 1974 date. The miscreant gave a Woolwich address but offered yours as his last home. Elderly people can be especially hit by this form of fraud.

Equifax says its delay was caused by a glitch. It will say sorry and send you a gift. The Co-op has finally decided to put you on to the account. It will send you £150 in compensation as an apology for the time and anquish involved.

Useless cover on borrowing

I needed to borrow £15,000 in 1999. As I had been a Barclays customer for 25 years, I asked the bank for a personal loan.

I was told I could have it provided I took out insurance protection that would pay the bank if I could not keep up the instalments.

It was only some years later when my business was not doing so well that I realised the cover was of little use to me as it was almost impossible to claim on the unemployment section without ceasing work altogether as I am self-employed as an IT consultant.

I went back to Barclays which refused to give a refund of my premiums despite my producing copious material showing I would have to jump through many more hoops to claim than someone in employment. Have I been mis-sold?

AS, London

· Capital Letters thinks you have. Barclays chooses to differ and it disputes whether its selling line amounted to any "compulsion". But this column can understand Barclay's commercial necessity to sell these policies - they are immensely profitable.

You borrowed over seven years. But instead of your paying the insurance every month, you were charged the entire seven year's worth at the outset. This was then added back plus interest.

You started with a £15,000 loan. Covering this for months when you could not pay due to unemployment or sickness or death would cost £4,545 over seven years. You paid 13.9% interest on both the loan and the insurance.

The result was the loan would cost £23,102 over the period while adding the interest to the insurance produces £7,000 - equal to over two years's payment on the loan itself. The insurance increases repayments by 30%.

Barclays says most customers are happy with the process.

It would be hard for anyone outside the bank to say this is good value - you can buy the same cover as a standalone for far less. But in your case, it is even worse value. To claim you would have to go bankrupt or inform the Inland Revenue that you have ceased trading. Both are far tougher conditions than losing a job. Barclays has, however, allowed you to cancel the cover and has made a partial refund plus a small payment but you have still spent a fortune on over-priced cover of scant use.

Not such a great prize

Everyone in my household received a "Congratulations! You have been awarded a fabulous gift" letter from Lifestyle Rewards UK which runs from a postbox in Flintshire. Where do they get all our names from? And what happens if we reply?

MG, Middlesex

· They get your names from the voting list - they have even left the "under 18" indication straight from the electoral roll on the address for your 17 year old child.

Oddly enough, all of you share personal award number 230765 so you can bet you have not won the one BMW or the one £2,000 shopping spree. Lifestyle says "names and numbers are chosen at random".

There is a £1.50 a minute premium line - maximum charge £10 - to call although you can post the form.

Virtually everyone "wins" a Canaries holiday for one - this costs £20 and if you go with someone, you have to pay extra.

What is French bond worth?

I lived in France 14 years ago and banked with the Paris branch of NatWest. It sold me a bond called Titre NatWest Capitalisation.

NatWest has closed its Paris branch and I had to leave France in a hurry.

I have tried writing to NatWest but without luck.Can you do better?

RH, Lincolnshire

· You invested 15,000 francs (around £1,500) in a bond, underwritten by Cardif-Vie, a French life insurer, now part of Banque Paribas, for seven years. It had a minimum redemption stated plus a roll over facility for further seven year periods. As this is a bearer bond, you will have to take it to Cardif Vie at 41, avenue Friedland, 75367, Paris. It should be worth about £3,000 by now.

Gains tax on my real home

Because of my work, I have to live in a property supplied by my employer. Obviously, I know this housing will not last forever so I need to consider buying somewhere.

I want to be able to rent my future home until I need it. But will I have to pay capital gains tax (CGT) on it if I sell it eventually? And what about my partner?

HJ, Cornwall

· If you have to live in work-related accomodation - vicars, farm workers, and domestic servants, for instance - the inland revenue allows you to buy a CGT-free house provided as a future "main residence" provided you intend to live in it on quitting the job or on retirement.

Tax expert John Whiting, at accountants PricewaterhouseCooper, says this is a statutory concession. But how you buy your house may depend if you are married to your partner or not.

If you are married, there are few complications. But if you are unmarried, (and provided your partner is not obliged to use the accommodation) then you should buy the property in your name.

If your partner buys a share, then she would be liable for CGT on her part - unless she lived in it for a few months each year. But if she lived there, it would be it harder to let. Renting does not affect any CGT bill - but you will be liable for income tax if you make a profit from tenants.

How banking scam works

I do not have, and have never had, a Barclays Bank account. So I was surprised to get an email from the bank headed "important message to all customers."

It then said: "We are working very hard to protect our customers against fraud. Your account has been randomly chosen for verification." It threatened if I did not verify my ownership of the account within 24 hours, it would be "blocked to protect my money."

As I have no involvement with Barclays, I assumed it was a fraud but decided to look at the link. It appeared very genuine and professional-looking, a far move from some of the home made websites junk mail often links you to. How does all this work?

BN, Birmingham

· This fraud has been around since last autumn. Most high street banks as well as Visa and the Bank of England have been hit. Emails are random - senders do not know your bank.

Scamsters have become more sophisticated and hope to entrap you by offering a site - Barclays' ibank in this case - that appears to be real.

The fraudsters, mostly from Russia and other former Soviet Union states, have discovered how to clone real sites - in a process labelled "obfuscation", also known as "spoofing". This exploits a loophole in Internet Explorer. Microsoft is currently working on a "patch" to help prevent this.

The site looks real and appears to have a genuine address because spoofers manage to hide the dodgy part of the address. You should also be suspicious of addresses without a "www".

The criminals hope you will reply, sending passwords and account numbers. If you do that, you will find your account is looted immediately.

But the fraudsters are running into problems. People are not nearly as stupid as they hoped. Most email users are so fed up with spam, they delete almost everything. And they are finding it difficult to send the cash back east thanks to most UK banks making it impossible to export cash online.

Banking sources say the number of victims can be counted in tens, and that the sums grabbed have been small. Some banks, including Barclays, offer an anti-fraud guarantee and will refund the losses.

A Russian site in South Korea has now been closed.

· We welcome letters but cannot answer individually. Write to: Capital Letters, Jobs & Money, The Guardian, 119 Farringdon Road, London EC1R 3ER or email jobs.and.money@guardian.co.uk. Do not send original documents but do enclose a daytime phone number. Information is general and offered without any legal responsibility. Always take professional advice if in doubt.