Panorama: Can't Pay, Won't Pay

StuTheDon

Morglin wrote: »

It's a no-brainer who pays the cost of 'unenforceable agreements' - the other customers who are paying back their debts, and who may want further credit.:rolleyes:

What banks lose on the one hand, they will recoup with the other - and so they up all the charges etc., to the good customers, to make up for the 'bad debts'.

Surely, the 'agreement', and the only relevant part, is that a customer applies for a loan, he gets accepted, reads the agreement, signs it and recieves the funds. He should then pay it back.

I'm not talking about those people who get into genuine problems - but this trawling around, by those that can pay, trying to find some minor loophole that will mean their debts don't have to be paid is harmful to the country, economywise, and to honest customers.

Lin

I totally agree with this - of course the banks offset any losses from unenforcable agreements against tax but there is still a loser here - the country from reduced tax takings.

People forget these instituations are here to make money by lending cash - they are under no obligation legally to freeze interest - they may only agree to do so to ensure they get something, rather than nothing.

If you don't agree with them making money from lending people cash then dont use them - simple. We are all adults and I have no sympathy whatsoever for people that dont read the T&Cs.

I bought a car recently and asked to take the contract away to read over it with a coffee - the salesman thought I was insane - just sign here he said - "it's all standard".

I really think classes at school about this sort of thing is desperately needed - dare I say it I see more value in Personal Finance classed than RE or social studies!

bert&ernie

@lin & stu

Its true, banks offset their losses against tax and increased revenues from other customers. However, this doesn't make the people to whom the bank incurs its losses morally responsible to those which the bank chooses to offset said losses.

If I were to punch you in the face, I would not be responsible if you then chose to turn round and kick someone else in the balls because it made you feel a bit better.

Incidentally, I have absolutely no problem with banks making money - I make it my business to help them do do just that. However, I have no sympathy whatsoever for banks who fail to make their T&Cs enforceable.

never-in-doubt

bert&ernie wrote: »

@lin & stu

Its true, banks offset their losses against tax and increased revenues from other customers. However, this doesn't make the people to whom the bank incurs its losses morally responsible to those which the bank chooses to offset said losses.

If I were to punch you in the face, I would not be responsible if you then chose to turn round and kick someone else in the balls because it made you feel a bit better.

Incidentally, I have absolutely no problem with banks making money - I make it my business to help them do do just that. However, I have no sympathy whatsoever for banks who fail to make their T&Cs enforceable.

And the winning quote of the day is.... :rotfl: :rotfl: :rotfl:

"If I were to punch you in the face, I would not be responsible if you then chose to turn round and kick someone else in the balls because it made you feel a bit better"

Brilliant mate, absolute cracker! :rotfl: :rotfl: :T :rotfl: :rotfl:

Seriously though, everyone and his dog knows that banks do not pass losses directly to their customers. Quite simply, if you have an account with a bank that has suffered a lot of losses due to unenforceability, and they try and hike up your APR - you leave! It's a no brainer so those that 'whinge' about unenforceability want to start looking at the extortionate salaries these [STRIKE][/STRIKE] bankers get paid and then assess who is really to blame - put it this way, without the customers signing up to all the credit thrown at them the [STRIKE][/STRIKE] bankers wouldn't be in the position they are in right now (i.e. filthy rich!)!

The losses of unenforceability rightly comes from their bonuses and other internal write-offs but it does not have an immediate impact on their basic lending to customers. Those worth the risk pay the smallest APR and those that are higher risk pay a higher APR.

Love it or hate it, that's just the way it is!

Morglin

In any business, especially banking, it's also a no brainer that banks will not, in the end, lose their profit margin, and everytime they have to lob out more with bad debts etc., the rest of us end up paying up more.:rolleyes:

Why do you think that the APR's are flying up on most, if not all, credit cards, despite the low base rate?

Doh - it's because they have lost so much money with sub prime lending and bad debt.:rolleyes:

I also don't understand how so many people say that their agreements are unenforceable and they didn't realise it when they signed because of the small print - yet the minute there is publicity given about some being technically unenforceable, suddenly those same people can understand them and all start to try and welsh out of paying their debts.:rolleyes:

All agreements state the amount borrowed, the amount of interest and APR, and what the instalments will be - either sign and pay it back, or walk away at that point - simple.

Bankers are still getting their bonus's lol - and although some may well be written off with tax etc., the rest comes from the customers that are paying back.:mad:

Lin

woody01

The problem is that SO MANY people were that stupid with money, that they dropped themsleves in it and are dragging everyone else down with them.

Forget the banks for the second (although they are the stupidest of the lot).

Mr & Mrs xxxx borrow right up to the hilt thinking life is dandy. All of a sudden Mr.x gets his hours cut. Seeing as he is only being paid £25K a year he struggles.
Mrs. x loses her job altogether so Mr.x decides he needs a loan to cover cost while she looks for another job.
3 months later, Mr.x finds himself on the 'rock 'n' roll'.

Panic ensues as their commitments, even with the first minor loss of hours puts them at breaking point as they could barely afford their financial commitments when things were rights. Now its all gone wrong, they are stumped.

1. Banks are mainly to blame for lending low/medium income people money that they would never be able to pay back when they have just a tiny change in circumstances.

2. Consumers must take a BIG portion of blame though.
Anyone that is fool enough to borrow money beyond their comfort zone, should things go wrong, is asking for trouble and gets no sympathy from me.


Low/Medium income people have been living it up on credit they cannot afford for 10 or more years now.
Things have gone 't!ts up' and now all they want to do is get out of paying for the credit they could never have afforded in the first place.

StuTheDon

woody01 wrote: »

The problem is that SO MANY people were that stupid with money, that they dropped themsleves in it and are dragging everyone else down with them.

Forget the banks for the second (although they are the stupidest of the lot).

Mr & Mrs xxxx borrow right up to the hilt thinking life is dandy. All of a sudden Mr.x gets his hours cut. Seeing as he is only being paid £25K a year he struggles.
Mrs. x loses her job altogether so Mr.x decides he needs a loan to cover cost while she looks for another job.
3 months later, Mr.x finds himself on the 'rock 'n' roll'.

Panic ensues as their commitments, even with the first minor loss of hours puts them at breaking point as they could barely afford their financial commitments when things were rights. Now its all gone wrong, they are stumped.

1. Banks are mainly to blame for lending low/medium income people money that they would never be able to pay back when they have just a tiny change in circumstances.

2. Consumers must take a BIG portion of blame though.
Anyone that is fool enough to borrow money beyond their comfort zone, should things go wrong, is asking for trouble and gets no sympathy from me.


Low/Medium income people have been living it up on credit they cannot afford for 10 or more years now.
Things have gone 't!ts up' and now all they want to do is get out of paying for the credit they could never have afforded in the first place.

Good post - I especially agree with the point around people taking out loads of credit and finding a small change in circumstances tips them over the edge.

i just can't understand why they think everyone else is to blame for this - surely you need to consider what would happen if you lost your job? Is it just plain greed or people seeing how celebs live and thinking this is normal, or a right?

I also can't understand why people get angry or are surpirsed about the fact they need to pay interest - if you don't like it don't do it - the banks are not a public service or charity - they are business out to make money.

I also think the banks need to dramatically reduce credit card limits to stop people getting into trouble in the first place.

woody01

This Shared Ownership Scheme is going to tip loads more people over the edge aswell.

MyChoiceHomeBuy (iirc), make people borrow up to their maximum. Thing is, if you are financially sound, you would not need a service like this in the first place.
These are designed to target low/medium income people with little or no savings.

Prime candidates for the fall that is coming.

never-in-doubt

StuTheDon wrote: »

Good post - I especially agree with the point around people taking out loads of credit and finding a small change in circumstances tips them over the edge.

Come on, you can't sit there with your head so far north and miss the point here..... why didn't the people throwing credit at us take into account that one day, a small change could affect their ability to repay? It didn't enter their minds as so my point remains the banks are responsible - not the customers.

It's a bit of a sad outlook on life to be pessemistic throughout, I have a great job right now and the last thing on my mind is what i'd do if I lost it! I live for today and sorry, if 5yrs later my situation changes and it means my family eat or I don't pay the bank back you know what? Sod the bank!

StuTheDon wrote: »

i just can't understand why they think everyone else is to blame for this - surely you need to consider what would happen if you lost your job? Is it just plain greed or people seeing how celebs live and thinking this is normal, or a right?

Because they are to blame that's why! Did we go to the Northern Rock and ask for LTV of 125%? NO! They done it as a sales ploy that horribly backfired! You need to grasp the facts before reading into the fictional mate - you really do!

A totally hypothetical scenario for you:

I have a mortgage and took it out 3 years ago at a rate of 4%. Then we have the housing boom (due to bankers greed amongst others) and interest rates shoot up to 6% + and my fixed rate ends and guess what, i'm short. I then borrow on cards to make repayments. How is it my fault that I got into this mess when I only borrowed the suggested amount of 90% LTV?

That figure wasn't just plucked from thin air - cmmon, we all know about the self cert mortgage con where they don't even ask to see accounts and you 'declare' a salary!

My mortgage as it happens is a self cert and my rate is great, or was, but when it ends in 2 months i'll be saving £600 per month so in my case it worked to my favour, i.e. my fixed rate in 2006 of 6% was good. I knew I could afford it so went ahead - however, paperwork would have said I was £150k short.

Thus a self cert mortgage was best for me.

Point i'm getting at is things will work for some and fail for others - bottom line is that I borrowed a lot more than I should have but why was it allowed in the first place? I never broke any laws, I told the truth of what I earned the previous year and estimated my projected years income which fell way short of my projection! Everything was legal and above board but I still got to borrow 7 times my income as last year was a bad year for me! I

StuTheDon wrote: »

I also can't understand why people get angry or are surpirsed about the fact they need to pay interest - if you don't like it don't do it - the banks are not a public service or charity - they are business out to make money.

I also think the banks need to dramatically reduce credit card limits to stop people getting into trouble in the first place.

Speak for yourself, what others do shouldn;t affect you - if the rate offered is too high go elsewhere. :eek:

StuTheDon

Never-in-doubt - I'm afriad it is people with attitudes like you that have contributed significantly to the credit crunch.

Whenever I have borrowed money I have always, always had foremost in my mind that I need to pay it back. I also know that if I lose my job that this is not the bank's fault and I still need to pay it back - this is why I plan my finances and have savings.

A lot of people do not have savings, so the slightest change in circumstances puts them in immediate trouble.

I love living for today but if you don't plan for tomorrow then you have no right to complain when it all goes wrong. Financial security is not a right - it is earned.

I agree banks have lended irresponsibly in the past - BUT YOU DONT HAVE TO TAKE THE MONEY :mad:

Do you think there is a money tree in the Bank of England and they just shake it whenever someone decides they can't be bothered to pay their loan/mortgage back?

woody01

Come on, you can't sit there with your head so far north and miss the point here..... why didn't the people throwing credit at us take into account that one day, a small change could affect their ability to repay?

I am suprised you think the bank is responsible for peoples decisions.
Also not suggesting for a second that the banks are totally blameless in all this, but stupid people borrowing too much is the crux of it.