Answering bank charges skeptics: pls help....

flam147

MarkyMarkD wrote: »

Good points, many of you.

The one about not understanding that you need money in your account the day before the DDs go out is quite astonishing. I cannot believe that someone phoned up, time after time, and was told "the charges stand" without asking - "what did I do wrong"?

If someone is that wet with their bank, (or any service provider), they really should try a bit harder.

It is established in many banks' terms and conditions that you have to have the money there the night before. I don't know how the bank are meant to be psychic and look forward two hours to see if money is going to be paid in - and that's why they don't. If the money isn't there when the pay/decline decision is made, the payment is declined and the charge is incurred.

And as Graham_Devon says, there is a difference between the cash withdrawal scenario and the DD scenario. A cash withdrawal is you hoping that you have enough money to make the withdrawal. A DD is an instruction to the bank to pay money to a third party - meeting an obligation you have to that third party.


The points about cross-subsidy are fair enough. I don't know why the banks have been so obsessive in defending that charge. Anyone who isn't blind can tell that those who pay charges are cross-subsidising those who don't. But, that doesn't make charges immoral or illegal or unlawful per se. It might mean that the charges involve a high contribution to fixed overheads - which is what most of the costs of running current accounts are. And that isn't unlawful or immoral or illegal per se.

Most business relationships involve cross-subsidy. Supermarkets lose money on special offers and make it up on other staples, for example. Mortgage lenders lose money on short-term incentives and make it up on those who stay on SVR for 20 years.

Why should current accounts be different?

when did we have to sign a contract to shop at tesco?

do you eat a mince pie on christmas day?

natweststaffmember

flam147 wrote: »

if you are good at budgeting and get your newspapers and magazines delivered from your newsagent , should i pay for them because i am not as good at budgeting?.
banks make £40 BLN profit of which charges are only £3 BLN. if you want a debit card you should pay the bank for it? oops you do because you lose interest on what the banks make out of your money.

there is sometimes no money in the pot because you have been fined 50 times for one offence!!!

Flam, Martin has quoted £3 billion pounds which I think was an error on his part since the figure was more in 2006 so I think Martin was being generous to the banks on this occasion
I think as well at the moment, with interest rates being low that the argument re lose interest on the money banks make out of you is not necessarily a good argument but is when they are high.

Graham_Devon

flam147 wrote: »

but sometimes someone else makes a mistake and before you notice it you have been charged £38 which if you have £10 spare in your budget they mount up to £100's responsability again (paying a fine on a fine!!!)

contract Law prohibits the amount the banks charge.
a DD could be cancelled 1/100000th sec after bank clerk pressed enter on bank terminal (if not gone out, but many banks insist on 3 days notice).
more charge generating. lots of people are on very tight budgets.

So why on earth are these people on very tight budgets paying via a method which gives them them:

- The least amount of control.
- The least amount of time to pay.
- The liklihood of charges applying being MUCH higher.

Can someone explain this please!?

I know it easier. But hey, if you don't want charges, you got to take some responsibility for your finances.

No one is even attempting to lok at this point. There are some things where you have little choice but to pay by DD. I pay my mortgage, mobile phone and internet by DD. ALL other payments are done manually. This means I can control when the payment goes out, and I can control the charges. Why not just do the same!? It's incredibly simple.

natweststaffmember

Graham_Devon wrote: »

So why on earth are these people on very tight budgets paying via a method which gives them them:

- The least amount of control.
- The least amount of time to pay.
- The liklihood of charges applying being MUCH higher.

Can someone explain this please!?

I know it easier. But hey, if you don't want charges, you got to take some responsibility for your finances.

No one is even attempting to lok at this point. There are some things where you have little choice but to pay by DD. I pay my mortgage, mobile phone and internet by DD. ALL other payments are done manually. This means I can control when the payment goes out, and I can control the charges. Why not just do the same!? It's incredibly simple.

Because they pay more for paying via methods other than Direct Debits so if they are on tight budgets, the increase in cost is over the budget. Does that make sense?
I agree with what you have said in the main with regards to changing the method of payment to one that suits you taking into account budgetary constraints.

Graham_Devon

natweststaffmember wrote: »

Because they pay more for paying via methods other than Direct Debits so if they are on tight budgets, the increase in cost is over the budget.

The increase is about £1.50 per quarter. £6 a year.

And that's only for certain establishments, I know BT is one.

On the flip side, early payment gives me £15 off with British Gas on my next bill (I think it's £15).

The council, credit cards, my second business mobile, my insurance. None of them charge me any more to pay via other methods.

I said earlier, the reason for paying DD has been given in that it costs more to pay via other methods....yet people are getting charged x amount per month in bank charges?!!

It makes absolutely no sense and I can just not get my head around how something so imcredibly simple is seen as being a no go, because it's too difficult, wont remember etc. We live in an age where you can go online, check your balance, and make a payment within 3 minutes. Via other payment methods, if there isn;t the money to pay, you have 14-28 days to make arrangements, talk with the company, make sure you get the money etc, and then pay.

If people will not do this, then they can't reallty moan about charges. The lack of financial responsibility is sometimes outstanding. However, when you say something like this, your seen as holier than thou, or judgemental. People don't want to hear the responsibility part. They don't want to hear that they signed an instruction to pay on a certain date. They don't want to hear anyone giving suggestions. They want to hear "bad banks, not your fault".

natweststaffmember

They may simply not know how to deal with things in that manner Graham. Remember, we only see them on here AFTER the fact, usually, and that has been when it has been happening for a long time so whilst I am not saying that they cannot do that now their bemoaning may have come from the basic lack of financial education.
Do you think that Martin should have a video guide to basic financial budgetting(If there is one then )?
It would make it easier to advise watching the video even if they were reclaiming.

pipkin71

natweststaffmember wrote: »

Because they pay more for paying via methods other than Direct Debits so if they are on tight budgets, the increase in cost is over the budget. Does that make sense?

Very true.

I believe our cable company charges £5 per month if you pay by means other than DD, so it makes sense to use the direct debit facility.

That's only one company, add others onto that and the figure soon mounts up :eek:

krisskross

pipkin71 wrote: »

Very true.

I believe our cable company charges £5 per month if you pay by means other than DD, so it makes sense to use the direct debit facility.

That's only one company, add others onto that and the figure soon mounts up :eek:

However just one missed DD because of shortage of funds would cost far more than £5. Wouldn't know what cable charge as we can't afford it, freeview has to do for us.

Graham_Devon

natweststaffmember wrote: »

They may simply not know how to deal with things in that manner Graham. Remember, we only see them on here AFTER the fact, usually, and that has been when it has been happening for a long time so whilst I am not saying that they cannot do that now their bemoaning may have come from the basic lack of financial education.
Do you think that Martin should have a video guide to basic financial budgetting(If there is one then )?
It would make it easier to advise watching the video even if they were reclaiming.

Most certainly I would like to see suggestions like this from Martin. However, I have put the same sort of suggestions in many bank charges threads, so I don't think Martin is all that interested in the responsibility side either. This isn't a dig at Martin, but it's all I can conclude.

Both times, I have been referred to the one line which said "of course, it's best not to get charged in the first place" as information as the best way to not get charged.

Don't know if there is more about this on the articles now. But when I read them, it was all "rights rights rights" with not a hint of actual advice to stop being charged.

esmerellda

amazes me how many people stay with their banks even though they are taking most of their income each month in charges and still hve their direct debits set up just going bounce bounce bounce like its all going to magically fix itself.

so many times i advise people to move to a new bank, with a basic account, and start paying by cash/bill payment so they have control back.

answers come back about paying by dd being cheaper - yes maybe by £5 a quarter or something - but surely if its a toss up between that or £35 charge each month from the bank...well I know which i would pick, and do !


Re the cable/broadband etc malarky - I have virgin cable, does my phone, broadband and basic tv for £20 a month.