Changes to HBOS overdraft charges

JoseChungsDoomsday

opinions4u wrote: »

What, pay them £5 a month for simply having a wage paid in to an account?

Nah, spose not.


Seriously though, think it through. Banks have access to a reduced level of funds to lend. This charging structure will, presumably, reduce customer demand for overdrafts. It's inspired. It may also be good for people in this country who seem to think spending beyond their means and living permanantly in their overdraft is a "normal" way to run their finances.

The £5 bonus will never happen, what you have to remember is hbos, for years, pushed credit as a way of building a relationship no those same customers are going to be ripped off by being charged up to £2 per day for the use of an overdraft.

It may lead to people rethinking their finances but in the mean time HBOS customers are going to get ripped off

jambosans

JoseChungsDoomsday wrote: »

The £5 bonus will never happen,

The £5 bonus has happened, and if the decision was taken to scrap it then that would suggest the benevolent Lloyds TSB had decided to do so.

JoseChungsDoomsday wrote: »

what you have to remember is hbos, for years, pushed credit as a way of building a relationship no those same customers are going to be ripped off by being charged up to £2 per day for the use of an overdraft.

All banks retail arms push credit on their customers. When it comes to retail banking Lloyds TSB are no more prudent than Bank of Scotland in my experience. Both ask me when I call if I want a credit card.

Please bare in mind that the real losses at HBOS came from Bank of Scotland Corporate, not their retail arm. Retail is relatively low risk as the sums available on credit are tiny in comparison to corporate lending - so in my opinion HBOS had no more of a credit happy trigger than the other high street banks.

JoseChungsDoomsday wrote: »

It may lead to people rethinking their finances but in the mean time HBOS customers are going to get ripped off

In comparison to what they were paying by the way of debit interest, then yes, some customers will get "ripped off". However, the reality of this situation is, the banks in all likelihood will loose the Test Case Appeal, and to sustain profitability on a "free in credit" current account, they will have to change the goal posts. So instead of profiting from customers who don't play by the rules, they are increasing what they charge you to borrow from them. It is good business.*

All that said, it can definitely be seen as not fair to the customer's who played within the rules and are now going to be paying much more than previous for an arranged overdraft. Again though, hitting someone where it hurts (their pockets) may give them the push to start living within their means and paying off debts - especially a debt which is short term, and could be demanded back in full at any point.

*This is pure speculation, however I feel the argument of cross-subsidy in retail banking is the strongest argument (IMO) to explain such a drastic change.

opinions4u

JoseChungsDoomsday wrote: »

The £5 bonus will never happen, what you have to remember is hbos, for years, pushed credit as a way of building a relationship no those same customers are going to be ripped off by being charged up to £2 per day for the use of an overdraft.

Right. So is that why the following banks all have MORE overdrawn customers than Halifax?

Nat West. RBS. Lloyds. Barclays. HSBC.

It may lead to people rethinking their finances but in the mean time HBOS customers are going to get ripped off

My figures may be slightly out of date, but as I understand it 90% of Halifax current accounts never overdraw. A further 5% could easily avoid using their arranged overdrafts.

So at least 90% of their customers won't be "ripped off" by these changes. Most of those will actually be better off because of the £5 a month payment. Which, despite your claim "The £5 bonus will never happen", it is already being paid to many of their current account customers and will be significantly widened in December. Not even mentioned the abolition of £28 and £35 charges for unauthorised borrowing.

withnell

JoseChungsDoomsday wrote: »

The £5 bonus will never happen

It happens to me three times each month

Laurenbelle

withnell wrote: »

It happens to me three times each month

You lucky !!!!!! :rotfl:

JoseChungsDoomsday

withnell wrote: »

It happens to me three times each month

read my reply correctly before trying to be smart, I was clearly referring to Lloyds TSB accounts

rae25_2

I have just switched for this reason but mainly due to the fact the lady at the bank showed awful customer service by announcing to the whole queue that I was overdran so would be affected, I was mortified. Ive disliked the attitude at the branch for a while so this was the push I needed.

opinions4u

JoseChungsDoomsday wrote: »

read my reply correctly before trying to be smart, I was clearly referring to Lloyds TSB accounts

This is the post in question:

The £5 bonus will never happen, what you have to remember is hbos, for years, pushed credit as a way of building a relationship no those same customers are going to be ripped off by being charged up to £2 per day for the use of an overdraft.

It may lead to people rethinking their finances but in the mean time HBOS customers are going to get ripped off

I can understand why a reader would miss your earlier reference to LloydsTSB. There is no clear reference to them at all.