Recommend a bank account

Rafter

Does seem like you need to get your own house in order.

The office of fair trading will at some point rule on 'bank charges' but it seems to me that they are highly unlikely to reduce charges from say the £20-£35 now to say the £2 it costs to send a letter or make a phone call.

Of course there is a punitive element to the charge just as in the same way there is for parking fines, speed cameras, not buying a ticket on the underground or not paying your tax bill on time. Because there is no specific law in place, the banks aren't 'legally' entitled to charge penalties though, only the government are. But there are other areas where there is legal prescedent, private car parks and clamping for example, charges for changing flights which are far in excess of the actual costs.

What is the alternative? That the banks only charge £2 then suspend the offending account so customers really can't afford to eat? Charge £2 and simply swallow the £millions of losses from customers who get into too much debt as a result of overspending or not caring about financial discipline without passing the losses onto other customers in lower savings rates or charges for basic banking services.

I strongly suggest you find a bank which will give you an overdraft limit at least as big as your morgage DD. That way no failed DD or unauthorised overdraft charges. You will pay overdraft interest for the period you are overdrawn, but that only seems fair since you are borrowing money for the period before your sporadic income gets paid in to your account.

R.

innovate

Rafter wrote:

..... to reduce charges from say the £20-£35 now to say the £2 it costs to send a letter or make a phone call.

I am not working for a bank, so have no insight into their cost structures. However, I think it would be fair to assume that the true total costs aren't just £2 - making a call or sending a letter may well only cost £2 for the phone call or the p&p of a letter, but there is a human resource involved as well. The banks have to pay salaries, pension and NI contributions to staff they employ to manage accounts, and they have to provide offices for their staff.

dchurch24, I absolutely agree with Rafter, Caped Avenger and YB (and probably others) - why don't you divert your energy to managing your finances instead of adding to the cost of banks by taking them to court?

You say "I don't fit the pay on the nth of the month mold" but you still seem to expect banks to fit the mould of those who pay your direct debits on time, regardless of whether you have enough money in your account or not, and without charging you the charges that you agreed to pay when taking out the account.

So who do you expect to fund your direct debits if your account doesn't have enough funds? I for one wouldn't be happy for my money to be used to fund direct debits of total strangers, so hopefully I am not having any accounts with banks you bank at (your 'blacklist' looks promising! )

tinalives

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innovate

tinalives wrote:

To be fair - if the courts deem the charges as 'unfair', I don't see the problem in challenging the banks who make these charges.

Fair point, and it does make me think why dchurch does get his money back when he goes to court.

However:

• it might be cheaper for the banks [and therefore to their customers and shareholders] to just refund the odd £30 rather than fighting things out in court, paying huge fees to lawyers on the way.
• if bank (and credit card) charges were in fact illegal, why do we still have them?

tinalives

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Rafter

Tina,

It is a real pandoras box of an arguement to say that the charges are unfair but one worth exploring.

I think it is unfair that someone gets charged say £250 in charges as a result of failed direct debits and unauthorised overdraft charges if their employer pays their wages a week late through no fault of their own.

I think bank that 'cap' their charges to a maximum of £75 for a single event like this are fairer, although it is still an extortionate amount.

I think if charges for unauthorised overdrafts etc were only £5 it would tempt more people to exceed their limit using the 'it is only £5' arguement and inevitably more people would end up defaulting on their loans and the bill would have to be picked up by other savers like me through lower interest rates.

I think a charge of £10 would be reasonable and sufficient penalty for each incident, capped at say a maximum of £50 per month. I think banks should be more proactive in offering 'buffers' and automatic authorised overdrafts.

Where people really cannot manage their finances though, they need to pay the costs associated with sorting it out. As innovate points out, there are '000s of bank workers who spend their days chasing money and sorting out customers who are not capable managing their own money.

R.

tinalives

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tparkin

Have just received the paperwork for the A&L Premier Direct Account that we opened last week, and the overdraft charges seem reasonably fair - at least in comparison to HSBC.

The overdraft facility is free for 12 months, then charges 0.48% per month (5.9% EAR), which compares well to HSBC's 14.8% EAR.

If you exceed your O/D limit the charges work like this:

Day 1 - no charge
Day 2 - £25
Day 3 - no charge
Day 4 - no charge
Day 5 - £25

These days do not necessarily have to be consecutive, and the charges are capped at a maximum of £50 in a month.

We have switched to A&L with the express purpose of clearing our overdraft, so hopefully won't have to experience these charges, but they seem a lot fairer than HSBC.

dchurch24

In my defence, my mortgage has to be paid by direct debit each month. Direct debits have to have a recurring date, my wages on the other hand are sporadic - if I went into the bank to change the date, or ask the morgage company to change the date that the money is taken - it takes 4 weeks for the change to occur. This is what I mean by the inadaquecies of the banks - a 5 minute job takes 4 weeks; if I was as inefficient as that, I wouldn't expect to be in a job for very long.
I am not spending money I don't have - I didn't make these rules yet I am forced to abide by them - if it took even as much as a day to redirect a DD, then I wouldn't have this problem.

As to directing my energy at sorting out my finances - that is exactly what I am doing - I am campaigning for a change in the way banks operate - 4 weeks to change/set up a DD or SO is frankly unacceptable and there to deliberatly extort money from me.
Perhaps you should read the press release in yesterdays Express - it explains it plain English for you.

And as for "solution to anyone's problems with a bank is the litigious solution." - well, if I did something illegal which resulted in the bank being 'out of pocket', what do you think their course of action would be?
To think to themselves, "ah, ok - it's a fair cop, the bloke stung us - we'll leave it at that"? I think that they would be threatening legal action pretty quickly. All I do is play them at their own game on their territory.

I really have no idea why this seems to offend some people.

Incidently, the charges are not illegal, per sey (unless you count the 1999 CCA and Obtaining a pucuniary advantage by deception), rather they are unenforcable - if you could get a bank into a court room, the judge would have no choice but to side with your claim.

TinaLives: [Obviously this would mean that penalties could potentially arise with whomever the payment should have gone to ]

In that instance they you would have to sue them for recovery as the law applies to ALL contracts, not just those guessed at by banks.

As innovate points out, there are '000s of bank workers who spend their days chasing money and sorting out customers who are not capable managing their own money.

For the most part, these 'chasings' are done entirely automatically; secondly, they chose to be banks - you have to take the rough with the smooth in any business. The difference is that the banks seem to think that they are above the law and impose penalties. They also have the advantage of using our money to make more money with - all businesses have to take losses - banks seem to flout the law to make sure they don't.


Anyway, thanks for the advice from people who answered my question in this thread before it was hijacked, I have a fair idea now of which account I am going to get next.

Kevicho

I hope its the A&L because so far they have been a good bank to me, and are helping me sort my finances out by being a good account for my needs