Reclaim Bank charges is this fair for others

Junovo

Hi
I totally agree that excessive charges given by the banks and any other institution is wrong. However by claiming these costs arent the banks going to just charge everyone for using their services and the people who never went overdrawn end up paying the price for those that have. ??

hairymike

Hi there.

My view on this is that the bank charges are a stealth way for the banks to make money, and it normally hits the people who can least afford it. At least if they are forced to be upfront about it, it will be open and honest.

With the banks being almost totally state owned, their main shareholder (the government i.e US) should have a veto over this decision anyway.

natweststaffmember

Junovo wrote: »

Hi
I totally agree that excessive charges given by the banks and any other institution is wrong.
I don't disagree with the principal of a bank charging somebody if they have to return a Direct Debit/Standing Order and/or cheque. However the interplay of charges I think clearly are unfair and many people would have accepted one charge but they normally get two or three as a direct result.
However by claiming these costs arent the banks going to just charge everyone for using their services and the people who never went overdrawn end up paying the price for those that have. ??

Why would they have to charge everyone?
If they provided "real" customer services then I would be glad to pay for those services.

simon_templar_2

Most banks are not subject to govt bail outs as i understand it. The tax payer does not govern or make decisions about policy, the govt does that.

Junovo

hairymike wrote: »

Hi there.

My view on this is that the bank charges are a stealth way for the banks to make money, and it normally hits the people who can least afford it. At least if they are forced to be upfront about it, it will be open and honest.

With the banks being almost totally state owned, their main shareholder (the government i.e US) should have a veto over this decision anyway.

I am not saying that the banks should not charge as every business has a right to charge for their services. Its the amount of the charge that is being disputed in the courts.
However by Martin Lewis promoting this hasn't he now given the banks an excuse to charge us ALL which in the case of those that have never gone overdrawn without banks permission, will end up paying for those that have.

flam147

Junovo wrote: »

I am not saying that the banks should not charge as every business has a right to charge for their services. Its the amount of the charge that is being disputed in the courts.
However by Martin Lewis promoting this hasn't he now given the banks an excuse to charge us ALL which in the case of those that have never gone overdrawn without banks permission, will end up paying for those that have.

why should someone paying bank charges pay for your debit card? you are already paying for your account by losing interest on your money so your bank account is tecnically not free anyway. when you use your debit card at the supermarket you are using a service of the bank but expecting someonelse to pay for it?

esmerellda

If you have a read of day one of the house of lords appeals transcripts the argument put forward by the banks is that the charges are designed to cross subsidise customers free if in credit banking model. So really those who do overdraw are paying for your free banking. Is that fair?

If you want to read it, its here http://www.legalbeagles.info/forums/attachment.php?attachmentid=1913&d=1248339615 but you have to register to view it.

Otherwise some extracts

25 LORD PHILLIPS: That is how you may describe it. What if
33
1 you were to describe it in a different way and say, "If
2 you go into the red, you are going to have to pay
3 a surcharge to subsidise those who behave well and don't
4 go into the red," would that make any difference?

MR SUMPTION: Indeed. In this case, you are paying for the
6 convenience of being able to do that which you would not
7 otherwise be entitled to insist on: namely, that
8 transactions go through in spite of the absence of funds
9 and that you be allowed to borrow.
10 LORD MANCE: Actually, you are not, are you? You are really
11 paying to enable banks to operate a sort of reverse
12 Robin Hood exercise. Isn't it subsidising the richer --
13 MR SUMPTION: That is, with respect, tendentious nonsense.
14 LORD MANCE: Tell me why.
15 MR SUMPTION: Looking at it in terms of the contractual
16 relationship with which this regulation is concerned,
17 what you are paying for is the right to do that. What
18 your Lordship is referring to is what the bank does with
19 its revenue stream.
20 Now, that is not simply what your Lordship calls
21 Robin Hood-ery. First of all, it is a cross-subsidy
22 between those parts of the individual customer's charges
23 which are generated at a time when he is in credit, and
24 those when he is not.
25 One should not look at this simply in terms that
37
1 there are two categories of people: people who are
2 permanently in credit and people who are permanently in
3 debit.
4 But the fundamental objection to your Lordship's
5 point is that it is confusing what the charge is levied
6 before as between the customer and the bank and what the
7 customer spends the money on. It would be just as
8 pertinent -- ie, in my submission, not pertinent at
9 all -- to say that we were charging these in order to
10 pay increased dividends to our shareholders; now, of
11 course, an indirect way of subsidising the public purse.
12 LORD MANCE: There must in fact be a lot of cross-subsidy
13 between people who remain in credit. I mean, the larger
14 the amount you have in the bank, the more interest you
15 will forgo and the more, therefore, you are subsidising
16 someone who may remain perfectly in credit but only
17 has £10 in the bank.
18 MR SUMPTION: Cross-subsidy is inherent in almost any
19 complex package of services. It is absolutely
20 fundamental and it is not objectionable.

flam147

esmerellda wrote: »

If you have a read of day one of the house of lords appeals transcripts the argument put forward by the banks is that the charges are designed to cross subsidise customers free if in credit banking model. So really those who do overdraw are paying for your free banking. Is that fair?

If you want to read it, its here http://www.legalbeagles.info/forums/attachment.php?attachmentid=1913&d=1248339615 but you have to register to view it.

Otherwise some extracts

now i may not have remembered my figures exactly
bank makes £40BLN profit of which £4BLN is from charges remove the charges lets see £36BLN profit :huh: no the banks will not be able to provide free banking. if it was free banking you would recieve full interest on your current account not a tiny % so you are paying for your banking another lie from the banks

natweststaffmember

flam147 wrote: »

now i may not have remembered my figures exactly
bank makes £40BLN profit of which £4BLN is from charges remove the charges lets see £36BLN profit :huh: no the banks will not be able to provide free banking. if it was free banking you would recieve full interest on your current account not a tiny % so you are paying for your banking another lie from the banks

That information was also supplied at the OFT test case hearing so whilst it is focused on Bank charges specifically the interest part was mentioned but it is not the main focus of the Test case.

esmerellda

I really should have put free in quotation marks

flam147

natweststaffmember wrote: »

That information was also supplied at the OFT test case hearing so whilst it is focused on Bank charges specifically the interest part was mentioned but it is not the main focus of the Test case.

aggree was trying to make the points that the banks could afford to not charge £38 and still provide free banking , and you would be paying for your own banking services but under the current system i am paying for your banking services!!