Bank charges

dchurch24

So far, according the the survey at the ConsumerActionGroup (about 1/4 of people actually complete this), £366,497 has been recovered.

Does it cost that much to send a barrister to a small claim court? The argument that it's not financially viable doesn't stand up any more. They'd only have to win one and then it stops.

Why is it then, by the same token, that on occasions when judgements have been obtained by default that they DO send a barrister down to an overturning hearing? They then hear what the judge has to say, and then pay up, in full with interest and costs.

As mentioned earlier a judge has ruled (on record) that the bank in question would lose if a new court date was given.

I don't need to care because there seems to be one born every minute willing to hand over vast sums of money due to their own incompetence.

...but the point is, we're not handing the money over due to incompetence. The incompetence is from the banks - they have so far been known to send information requested under the DPA to the wrong people (with personal information in it obviously). They have repeatedly lied about information that is covered by the DPA and have repeatedly sent incorrect information. They also have given me 3 different account balances from 3 different sources - which one do I believe?

So, due to their incompetence, I am charged. I then take action to get it back - hardly handing it over!

1. What is the difference between a bank fine and a police fine? Apart from you never signed the T&C for the police

You have answered your own question. The T&C's form the contract - there is a breach of contract penalties are not allowed to be levied against a second party for a breach of contract.

FACT: everybody has a brain that is capable of subtracting a couple of numbers.

True, it helps though if the numbers given are correct. If you put garbage in, you will get garbage out.

I don't know why you think there isn't choice out there .. maybe you should do a bit of research instead of giving advice that makes the hole that some people are in even bigger.

Hmmmm...getting peoples money back as opposed to taking it, is putting people in a bigger hole? Odd logic.

http://www.ivafreehelp.co.uk/bank_accounts.htm

I have telephoned lloyds, hsbc and co-op as regards to the above linked chart - and, yes, it's wildly out of date - they DO make these charges.

So, again. Where is the choice. I HAVE researched it. Clearly you haven't.

Lets take your figures 24 billion IT over 6 years with 20 million customers. That works out at £200 per customer per year and that is before building, heating, lighting, printing, staff and other costs are taken into account.

Are we then to assume that bank charges are responisible for the entire UK banking worlds profits then?

No wonder the banks do it - and there was me thinking they made money out of loans, mortgages, overdraft interest, the libor rate, currency converstions, currency fluctuations etc...etc...

This is the flaw in the argument. Their lives are not being destroyed by the banks they are being destroyed due to their own lack of money management skills .. maybe the banks should turn them away at the door (but that would be a real step back in time). As is usual in this society we will try to find somebody else to blame for our own mistakes ... adults have to at some point take responsibility for their actions or lack of them.

Banks are not destroying their lives? Ok, so the bank takes 400 quid in charges, then the next month they take the same because the 400 quid they took the month before has left that account 400 quid down. And so it spirals.
The argument that people should be responsible is hugely flawed. Responsibility doesn't come into it. The banks have a duty to be responsible - they have a fidicuary duty by law, they have breached the law and thus their fiduciary duty. The reason I incured charges initially was because my employer didn't pay me on time. You could argue that the bank should look at each situation individually and when it isn't the individuals fault then don't charge them. However, that would start to cost the banks millions and so it won't happen. How would they know that I wasn't lying? My employer was hardly scrupilous in the first place - hardly likely to put their hands up and write to the bank letting them know that it wasn't my fault.

You could argue that I should have gone after my employer for the charges - but then that would mean proving that a penalty IS enforcable, when it clearly isn't.

It's not about the individual taking responsibility, it's about the banks being responsible and being accountable for their actions.

I notice there was no answer to the reasons as to why banks pay the largest amounts first when there are more than one payment going out of an account in the same day.

If banks didn't like charging people, it would be done in reverse order.

The reason I was given 3 different balances on the same day is deliberate - deliberately designed that way, so that it's nearly impossible to know where you are financially and then of course they hope that you will spend what they tell you that you can spend - and of course, be punished for it when you believed their figures and spend money (or attempt to spend money, let us not forget that you will be charged the most for not having funds to pay a direct debit).

Of course, banks have just gotten too big for their boots. I had a cheque from the Inland Revenue once, I put it into my account - 9 days later it still hadn't 'cleared'. I asked why, as, if you couldn't trust the IR to have the money, then who could you trust. Her reply was that they hold on to it for that long in case it was issued by mistake.

Bloody cheek. What business is it of the banks? None - it's between me and the IR. More lies perhaps?

But then, as you work for a bank (presumably) you have no doubt been brainwashed into believing that banks are still the respectable institutions they once were. They lost all credibility and are sill losing credibility when people like Ian Mullen go on live TV and claim that NOT to pay a direct debit takes 2 members of staff over an hour to sort out. Thus, with 1 in 4 people incurring charges for non-payment of DD's that's 20 million people spending an hour per day doing nothing. Not really the best way to run a business, and I'm sure that their shareholders were really happy to hear that's how it works.

...or you could of course see what he said as a complete lie.

you still haven't figured out that I KNOW what at least one bank is doing and what some others are planning.

Of course, what you are suggesting implies illegal activity - I've had reports of banks lawyers having secret meetings over this issue - they are 'secret' for a reason!

Having just checked my Chartered Institute of Insurers Legal Manual - they do catagorical state that a nominal amount can be charged. Now unless a book that is used world wide to teach people in insurance/ universities etc about english law is wrong then I have no reason to disbelieve them.

It's funny, but when I did my CII exams, there was no book that said that for a breach of contract a nominal amount could be charged.

Are you sure you're reading that correctly? It's definitly for a 'breach of contract'?

ChrissieI

I agree with every said by Ivanopinion and Astaroth (But they both have said it so much better than I could have)
We are all responsible for our own finances. I have paid bank charges in the past and will not be claiming them back. I knew the rules I broke them. Elisebutt65 you are not the only one to be left with a child and no money. I have been there but why should the bank not charge me. They were not responable for my husband leaving.
The banks are a business they operate to make money.
In some counties if you go over drawn too often your bank accounti is taken away. We should be glad that we can have an overdraft facility and we should use it wisely.
I have in the past when I know I will go over my limit called the bank and told them. Both my banks have extended my overdraft for a short period of time when needed some times all it takes is a call to say sorry I've messed up before it happens.

Astaroth

I can honestly say I dont know... as I say, I focus on Insurance rather than banking as this is what my career history has been in and secondly I work in strategy rather than operations.

It would be exceptionally difficult to try and calculate how much it costs. You would firstly have the basic costs such as the letter itself (printing, sorting, postage), the handling of the response (call centre time/ mail sorting etc) - repeat this as many times as communications go back and forth as people discuss them.

You then have the back office costs - IT systems/ infrastructure, IT storage of records, physical storage of letters for 6 years

Then you have accounting both in terms of man power and bad debt coverage. As I am sure you are aware banks take peoples/ companies savings and invest them typically over a wide spread of opportunities (my personal employers favourite is property - buy and lease back deals). Banks however are legally required to keep some monies "in the bank" firstly to cover people wanting to make withdrawls but a more significant part is for bad debt coverage - so they could write off the debt and still have money to pay back a set percentage of the people who had savings. This is effectively dead money as a bank cannot pay itself interest.

How much money a bank has to set asside to cover bad debt is governed by very tight legislation and is well beyond my knowledge of the FSA rules but at its most basic it is a formula based on the combination of the number of accounts they hold, the total amount of credit they have written and the credit profile of their customers.

Each time one of its customers breaks their agreement it worsens the credit risk profile of the bank - now obviously a single persons transaction only makes a tiny difference but at some point the balance tips and the bank is told they need to put another £1,000,000,000 into a safe somewhere which they can neither invest nor lend to other people.

In additional to the billions banks have laying about the place for bad debt cover they also have to have whole departments who maintain these things, pay exceptional prices for auditors (which are compulsary) and then pay the FSA audit fees etc.

And you have the final bit - if they give it to you (in a case of unauthorised borrowing) then they cant give it to a genuine customer

If everybody did exactly as they should then in theory there would be no need for this and so customers who cause it really should carry the cost but to work out the exact cost in terms of all of the above would be exceptionally difficult and arguable how it should be done... should it factor in loan size as this effects the bad debt deposit the bank will have to make or should it only be the amount they are over the loan?

IvanOpinion

stugib wrote:

Ummm, one has the power to impose fines as laid out by parliament to act as a deterrent against behaviour harmful to society. The other has no power to impose 'fines' or punish people other than what they make up in the contract with the motive of maximising profits. Those charges have been shown to be unfair which is why people are claiming them back.

Thats the first quesiton answered as I thought it would be.. the government can do what the heck they like while imposing a different set of rules on everybody else.

Its a pity you missed my second question .. I will take it as an oversight and will repeat it here for your convenience
Who is offering the best money saving advice? The person saying handle your finance whatever way you like (even totally irresponsibly and in a cavalier fashion because there are ways to get your money back) or the person saying to choose the best product to suit your circumstances and needs ensuring you do not have to pay fines that you agreed to and might have something left over at the end of the month.

I still don't understand your logic of 'banks want to make profit therefore they are entitled to charge whatever they like'. Other industries have been curbed when their profiteering goes too far, and they can be too.

I have never said banks can charge what they want although like many companies in a free economy based on supply and demand they do get away with it. We can all point the finger at various industries showing how wasteful and over priced they are including the civil service, the NHS, ambulance chasers, estate agents etc. .. but, except for the first two, we have a choice, we can partake of their services, we can shop elsewhere or we can do without.

The banks aren't doing too badly for all this outlay on IT are they?

Are you backing away from the figures dchurch put up? A few postings back it was implied the IT outlay was a few pence per customer now the banks are doing very well out of their outlay on IT .. which is it? As proved by simple mathematics on the numbers dchurch supplied the banks have a significant overhead to provide just the IT services that customers demand.

Let's not get into ulterior motives when you've been rattling off how much banks are spending on IT and you've said you're indirectly involved in banking IT!

By the way it was dchurch that was 'rattling it off', not me (I will just be happy to get my slice of the cake). My motive is to provide the systems and services that customers and the business are asking for ... no more, no less. I sometimes wonder though who is profiteering most out of bank charges .. the banks or the ambulance chasers on a 'cause'.

Ivan

IvanOpinion

ali82 wrote:

Question: Does it cost a bank £39 to not authorise my transaction of £2 if I am up to my £50 O/D limit?

That is actually a very good question and I would love to see some sort of time and motion study done on it. If we equate this role similar to that of a mechanic doing a car service tho is often charged out at £60-80 an hour then we are talking here of about 30-40 minutes of work. I doubt it takes that long and that is assuming an operator looks at it ... however I have recently seen a team of 3 people spending 2 days trying to figure out why the bill of a director of the company was incorrect .. so that is 6 mandays at a charge out of £60 per hour which is about £2500 .. while some might only take a few minutes some take much longer .. maybe the £39 includes a bit to balance out quick solves and those that take ages.

Ali, if you are being charged that sort of fee then you need to look at the account you have. If you are sailing close to the wire each month then consider getting your authorised overdraft limit extended - but do NOT consider that as available money (only as a buffer to stop you having to incur charges. If you are not a persistent offender then you can phone the bank and they will probably refund at least half if not more.

Come the revolution banks will reduce their charges to what someone has deemed to be acceptable (say £12) .. however once those are applied there will be no comeback, no restitution through the courts (because the charges will be enshrined in law) and no goodwill gestures and I am sure they will be index linked .. the banks really will have us by the short and curlies.

Ivan

stugib

IvanOpinion wrote:

Thats the first quesiton answered as I thought it would be.. the government can do what the heck they like while imposing a different set of rules on everybody else.

Because the government's there to impose law & order - that's what we've empowered them to do! They can only get away with it for as long as we keep them in power - as the poll tax demonstrated. How can you compare the fines imposed to keep law & order with a private company looking for a quick buck?

IvanOpinion wrote:

Its a pity you missed my second question .. I will take it as an oversight and will repeat it here for your convenience
Who is offering the best money saving advice?

I didn't answer it because it wasn't aimed particularly at me and the answer is self-evident.....in a perfect world. But in real life sh-t happens - it's not always people frivolously overspending - and when it does the banks go in for the kill and impose charges way above what it costs them to handle that 'breach'. Even for the 'irresponsible' they still owe the money and the interest even if fines were reduced to what they should be. I really can't imagine many will take this as a green light to think they have a bottomless pit of money.

IvanOpinion wrote:

I have never said banks can charge what they want although like many companies in a free economy based on supply and demand they do get away with it.

But you're happy that they can act as some sort of financial police force and punish the 'offenders' with charges that don't reflect their costs - what is a reasonable 'fine' is your eyes? As I said in my first post the market isn't bringing these costs down - a failing, or unfair market requires intervention.

IvanOpinion wrote:

Are you backing away from the figures dchurch put up? A few postings back it was implied the IT outlay was a few pence per customer now the banks are doing very well out of their outlay on IT .. which is it?

Cost per customer is irrelevant - IT is just one overhead in running their business - they make huge profits from elsewhere in the business. Reducing unfair bank charges is not going to decimate their IT budget. Their billions of £ profits show they're doing very well overall.

IvanOpinion wrote:

I sometimes wonder though who is profiteering most out of bank charges .. the banks or the ambulance chasers on a 'cause'.

The banks.

dchurch24

By the way it was dchurch that was 'rattling it off', not me (I will just be happy to get my slice of the cake). My motive is to provide the systems and services that customers and the business are asking for ... no more, no less. I sometimes wonder though who is profiteering most out of bank charges .. the banks or the ambulance chasers on a 'cause'.

I rattled-off the figures for the amount of charges the banks make each year and the investors report that claims they 'assess' their IT infrastructure every 6 years.

I said nothing of how much it costs to provide the systems, I merely said that (in a rather sarcastic way, I grant you) that it couldn't possibly amount to 4billion quid x 6.

IvanOpinion

dchurch24 wrote:

...but the point is, we're not handing the money over due to incompetence.

yes you are .. it is 100% your inability to handle your own money. It is an inherent part of the society we live in .. we must have everything now .. nobody waits until they can afford it any more?

I notice that you also failed to answer my second question?

True, it helps though if the numbers given are correct. If you put garbage in, you will get garbage out.

seems to be the way most peoples brains work

Hmmmm...getting peoples money back as opposed to taking it, is putting people in a bigger hole? Odd logic.

By providing an escape route people will become more and more complacent. GOOD advice is to not put yourself in the situation to pay charges .. BAD advice is to say 'don't worry about it we can always get your money back'.

I have telephoned lloyds, hsbc and co-op as regards to the above linked chart - and, yes, it's wildly out of date - they DO make these charges.

So, again. Where is the choice. I HAVE researched it. Clearly you haven't.

You gotta work harder than that to do PROPER research.

Are we then to assume that bank charges are responisible for the entire UK banking worlds profits then?

No wonder the banks do it - and there was me thinking they made money out of loans, mortgages, overdraft interest, the libor rate, currency converstions, currency fluctuations etc...etc...

Now don't go all tangential on me .. I have no idea where this comes in (and I made the statement first by the way ). Bank charges probably only cover the costs of the local branches and probably play very little role in the overall profits.

... loads of stuff trying to justify people mismanaging their accounts ...

In your case the fault was with your employer, nothing to do with the bank, why should they look at your case individually? You are right though that most people will be liars when it suits their purposes.

I notice there was no answer to the reasons as to why banks pay the largest amounts first when there are more than one payment going out of an account in the same day.

Remember .. YOU set up the DD ... YOU made the payments .. it is YOUR responsibility to ensure there is enough money in the account (unless you are deliberately attempting to commit fraud). Therefore the onus is on you, not the bank ... why do you think the bank should be out a large amount of money by doing the small ones first .. you screwed up, stop expecting the bank to bail you out? However having said that, last time I saw a DD handling program it did take the largest ones first (to minimise possible risk to the customer) however if the large one failed it would attempt to take the smaller ones ... so you are not quite right there.

The reason I was given 3 different balances on the same day is deliberate - deliberately designed that way, so that it's nearly impossible to know where you are financially and then of course they hope that you will spend what they tell you that you can spend - and of course, be punished for it when you believed their figures and spend money (or attempt to spend money, let us not forget that you will be charged the most for not having funds to pay a direct debit).

Whoever told you that load of garbage is either an idiot or a liar .. you can decide which.

But then, as you work for a bank (presumably) you have no doubt .. yadda .. yadda

yet again your research is letting you down

Of course, what you are suggesting implies illegal activity - I've had reports of banks lawyers having secret meetings over this issue - they are 'secret' for a reason!

I have no idea why there are secret meetings .. but can think of many other reasons more likely than 'secret for a reason'. I have never suggested or implied anything illegal (where did that come from?)

IvanOpinion

stugib wrote:

I didn't answer it because it wasn't aimed particularly at me and the answer is self-evident.....in a perfect world. But in real life sh-t happens - it's not always people frivolously overspending - and when it does the banks go in for the kill and impose charges way above what it costs them to handle that 'breach'. Even for the 'irresponsible' they still owe the money and the interest even if fines were reduced to what they should be. I really can't imagine many will take this as a green light to think they have a bottomless pit of money.

So the answer was that I was offering the better money saving advice? Yes sometimes life decides to plop a load upon you (been there) .. however that is when you need to take much more control over your money and ensure that required safety nets are in place.

Cost per customer is irrelevant - IT is just one overhead in running their business - they make huge profits from elsewhere in the business. Reducing unfair bank charges is not going to decimate their IT budget. Their billions of £ profits show they're doing very well overall.

Disagree .. cost per customer/account is the only thing that it can be judged on. If services are to be supplied to the customer then those have to be paid from somewhere and the only source of revenue generated by the business .. calling it an overhead does not pay for it .. somebody somewhere has to pay for it.

The banks.

I reckon the ambulance chasers are probably doing quite well out of it as well .. they are probably running scared of fixed agreed charges coming in .. it will do away with a source of revenue

Ivan

dchurch24

yet again your research is letting you down

Err...research? What? You more-or-less said that you work for a bank. And I only said "I presume" that you do, as you didn't come out and say it outright.

I think you are picking holes to deflect from the real issue.

Whoever told you that load of garbage is either an idiot or a liar .. you can decide which.

No-one TOLD me that. You decide why then. Who wins out of the customer being mis-informed about their balance. Not the customer. Banks don't do anything by accident.

You gotta work harder than that to do PROPER research.

So, are you telling me that there IS a bank that doesn't make these charges? Now, don't be shy, spread the news.

yes you are .. it is 100% your inability to handle your own money. It is an inherent part of the society we live in .. we must have everything now .. nobody waits until they can afford it any more?

You are truly missing the point. It's not as easy as you seem to think it is, just doing something that should be simple - like getting a bank balance from your bank.

As already stated, Abbey's on-line 'service' does not update at weekends for one thing. I was given 3 different account balances on the same day by three different means. It's not about having what I can't afford right this minute. I never have been like that - I've ALWAYS saved, or sold something I no longer need to get the things I 'want'. I've since been forced down a road where I have to buy the nessecities (sp) of life on credit - not frivulous toys or spending on nights on the slash.

As to where the illegalities come from - you are implying that the banks are in cahoots and talking to each other about where to gain the extra revenue from when the bank charges thing is won. That's illegal - they are NOT allowed to talk to each other about those kinds of issues.