The future of banking on the back of reclaiming Discussion Area

Hereward

MPH80 wrote:

But isn't this all what happens now - just with apparently unlawful amounts on the charges?

Unfortunatly not. The unauthorised overdraft rate is only applied to the amount abover your OD limit: I was proposing that the rate is apply to all of the overdraft.

Chrysalis

Hazzanet wrote:

Chrysalis,

I think you're missing my point here. No bank is going to provide a contract which says "and you can exceed your overdraft limit at any time, and issue cheques willy-nilly". My point is that when you take on the responsibility of having a bank account, you have given the bank your word that you will operate it within previously agreed limits.

By exceeding these operational limits, you are indeed breaking your word. If you review my earlier post, I've acknowledged that people do have financial problems occasionally, however normally a chat with a bank can help, but only before a customer gets themselves into a position where penalty charges begin to be applied.

I've taken your point on board about charges piling up, but I'm trying to relate to those who just don't take proper control of their finances. People who get in to trouble because of redundancy (I've been there), sickness etc need to talk to the bank and explain the situation. Mine was very helpful in my time of need (Smile), and I never got slapped with a single fee.

Perhaps an alternative model should be in place for those who aren't in control of their finances? Take their chequebook away after a second bounced cheque, and then their debit card after a second overdraft breach? I'm sure you'll agree that an approach such as that would make life even more difficult than a painful £25 here or there. Maybe even take A&L's approach and give you your 30 days notice.

Hazza

ok so the bank has a choice of either letting someone go over their limit (i am not disputing this at all) or charging them an arm and a leg?

I have never written a boucned cheque in my life and rarely use them anyway, my bank wasnt as helpful as yours either, I dont have consecutive bounced payments just now and then but find it frustrating I have to work hard to get back a excessive charge,

You seeing things in black and white only, from 2 different extremes. The bank shouldnt clear payments if the account holder has a bad history, but in any situation they shouldnt be charging multiple amounts of the shortfall. If the payment is bounced the charge should be smaller then if the payment is allowed since they are not providing a service they are simply sending a letter. Personally I feel if an account holder is usually in credit and doesnt regurly have this ind of problem then a occurance shouldnt be penalised but just give them a warning, if the payment is only slightly over their limit maybe clear it. If it happens on a repeated basis then contact the customer and ask what they can do to help but obviously in this case the bank should block the payment and charge nominally (under £10). See if can agree on increased overdraft for a temporary period to allow critical payments to clear or to temporary cancel non critical direct debits. Not do what my bank did. I had a blocked standing order in may, sent me letter informing me charged £90, my account was 72pence short and had pending incoming payments of over £500 from sources that have always cleared. The letter said please contact us and we will be here to help. When I rang I got told nothing they can do they cannot clear the payment etc.

Chrysalis

schiff wrote:

May I thank Hazza, Hereward & Chrysalis for some excellent recent posts. They give a refreshing contararian view.

This claiming frenzy has been sparked off by Martin (will I get banned??) and people are getting sometimes huge sums back for actually behaving in an irresponsible way. It has needed to be said and I started something like this elsewhere - though it perhaps goes against the grain with the general thought processes of MSE! I was comforted to read that there are a lot of us of like mind (as I had guessed).

I wince sometimes at the proposed method of getting an advantage, promoted by MSE. Do something, wait till you get the reward, then kick the reward giver into touch ASAP. It goes against the grain with me, though I do take advantage of the rewards that are on offer. However I do try to give a bit back eg by keeping a bank account open for a while at least, that has given me a, sometimes very handsome, reward.

Problem is I'm a Libran and we like both sides to be happy. Generally I find it unachievable, which leads to us not being able to make our minds up! It's tough, I tell you!

schiff

The sad thing is you are right, I am defending innocent people who have one off situations but then get stuck in a trap when they get repeated high charges following one event. Given the amounts I am seeing been claimed back this probably isnt the case for everyone.

Hazzanet

Chrysalis wrote:

The sad thing is you are right, I am defending innocent people who have one off situations but then get stuck in a trap when they get repeated high charges following one event. Given the amounts I am seeing been claimed back this probably isnt the case for everyone.

Chrysalis,

I think you're right... there are three types of people subjected to these charges:

1) The 'oops I miscalculated by a couple of pence' people.
2) The I don't care about money, so I'll write a cheque and not worry about the balance lot.
3) The people who are struggling through redundancy, sickness etc.

Banks need to identify which category the customer in question falls into, and deal as follows:

1) Show a bit of humanity and take a sensible business decision as to whether to apply charges or not.
2) Give them what they deserve - it doesn't take much to write a budget and stick to it.
3) Identify this category as early as possible and get both the bank and the customer to sit down and talk it through. Like I say, I called in to my bank the day I was informed that I was made redundant, and I told them I'd be back in a week with details of what I was doing about it. The earlier you admit to the bank that there's a problem, the more they want to help you get back on track.

I agree with you about multiple charges for a single breach, but, and this is pointed at group (2), if they don't take responsibility for their finances, then they only have themselves to blame.

Hazza

MSE_Martin

First of all I dispute that I'm promoting misusing your bank account if you read my thoughts in the article you'll see that I strongly caution good use, and in both the TV programmes I've done on it - contrary to the producers wishes I pushed hard to have that in.

However the fact is there are some who are no fault charges. Read my blog about the filming day of tonight with trevor and you'll read about a case of someone with £3000 in charges who'd done nothing wrong.

Martrin

snap_3

MSE_Martin wrote:

First of all I dispute that I'm promoting misusing your bank account if you read my thoughts in the article you'll see that I strongly caution good use, and in both the TV programmes I've done on it - contrary to the producers wishes I pushed hard to have that in.

However the fact is there are some who are no fault charges. Read my blog about the filming day of tonight with trevor and you'll read about a case of someone with £3000 in charges who'd done nothing wrong.

Martrin

Hiya Martin! have you been at the pop? you signed your name Martrin:rolleyes: Edit quick:rotfl: :money: :rotfl:

Tootsie_Roll

Hazzanet wrote:

Banks need to identify which category the customer in question falls into, and deal as follows:

1) Show a bit of humanity and take a sensible business decision as to whether to apply charges or not.
2) Give them what they deserve - it doesn't take much to write a budget and stick to it.
3) Identify this category as early as possible and get both the bank and the customer to sit down and talk it through. Like I say, I called in to my bank the day I was informed that I was made redundant, and I told them I'd be back in a week with details of what I was doing about it. The earlier you admit to the bank that there's a problem, the more they want to help you get back on track.

This already happens which is probably why I am more than a little impatient with all the 'it wasn't my fault brigade'.

My experience is that if you generally run your account in order as example 1 a quick phone call to the bank is all it takes to get the charges refunded. Example 2 - yes agree.
Example 3 - this is where the problem starts. How many people stick their head in the sand and just hope it's all going to go away ? If the bank are writing to them - which we all know they do and their letters are just ignored they will have no option but to assume they fall into example 2. As someone who has collected this debt for a bank I know for a fact that had they phoned in their charges would have been minimised.

There will always be exceptions to this but most of the time this would be true.

Mark7799

On the basis of the OFTs comments with regard to credit card companies charging similar fees in the region of £12/15, if the Banks brought their fees down to similar levels, what tack will the 'anti-charges brigade' take then? (Apologies if the term sounds demeaning but I can't think of a better quick way to describe them at present) If the charges are held to be unlawful at the present levels but the level of £12/15 is deemed to be lawful, what are people's thoughts about them then?

Perhaps someone who is still involved in banking can give us a step by step approach of the mechanics involved in returning a cheque. From my days I recall the process was something like the following:

1. The account appears in an out of order report produced daily
2. The list is reviewed by a member of staff who looks at each account to decide what action to take (in some cases, this has been automated to give a recommended course of action which still needs manual approval or override)
3. Assuming the decision is taken to return the cheque, a letter is generated to the customer.
4. A message is conveyed to the place where the cheques are physically stored
5. The cheque is retrieved and returned by post to the bank/branch where it was paid in

Is this still the case?

YorkshireBoy

Mark7799 wrote:

On the basis of the OFTs comments with regard to credit card companies charging similar fees in the region of £12/15, if the Banks brought their fees down to similar levels, what tack will the 'anti-charges brigade' take then?

The 'brigade' (as you call them) are very clear on their approach...

consumeractiongroup wrote:

However, The Bank Action Group spokesman added that the maximum of £12.00 was still rather on the high side and that its own Users were likely to continue to take legal action against banking and credit card institutions even though their charges might be less than OFT tolerable maximum.

“The test still remains whether the charges are a true reflection of the bank’s actual costs” said The Bank Action Group spokesman. “If the charges make profits then they are unlawful.

http://www.consumeractiongroup.co.uk/bag.php

dchurch24 has stated several times on this MSE forum that he intends to continue to challenge (and encourage others to challenge) the default charges in court. His basis for this commitment to ongoing litigation seems to be that the banks will not wish to produce detailed costings of their actual losses incurred and therefore settle out of court.

The 'problem' isn't going to go away is it?

Mark7799

Didn't think it would..........:D