The future of banking on the back of reclaiming Discussion Area

Chrysalis

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? (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?

lloyds confirmed to me over phone its fully automated and will always charge with letter sent out informing me.

however in the past they refunded me when I rang up they refused to do this last time which made me upset.

If they charged £12 as you stated I would say thats much more reasonable and would call it a move in the right direction.

Chimera

Just read the first page and a enraged to find people having a go at us supossedly stupid people who get ourselves charged. I am happy to pay the correct charge, but not about 60 x as much. and your banking would not be FREE if people din't get charged... so these people are essentially paying for your banking.. I myself got into a never ending circle of charges.. paying sometimes hundreds of pounds in charges, when I was struggling to start with.. hence the initial charges - then having to pay the direct debits manually that had been returned, on top of the £37.50 I had been charged for the priviledge of having it returned... How can that be right? I didn't realise how much I had been charged, until I requested the details.. charges became a way of life.. or I couldn't eat or get to work.. which was all I was spending the money on. I sold stuff on ebay, till I was left with very little, and at car bootsales every week. I had and still do have 2 jobs - bouth in the charity/social care sector. Unfortunately, jobs where you help disadvantaged people don't tend to pay too well - even when you are senior level. In fact I know many people in these industries really struggling finacially, because they do a job they love - they could theoretically get paid more. I have advised them all to claim back there charges. No person can comment on another persons life - beacuse they have NOT LIVED IT!!! I know other people have probably said all this before.. but I wanted to have my rant, why shoudln't I try and help myself oput of debt by reclaiming my charges? the banks have never tried to help me - apart from two, which I will be sticking with and not claiming charges from. In this contry we expect to pay for bad customer service.. although in the rest of the world people get charged for certain facilities - they also get excellent customer servcie and would not accept anything less... I'm on a consumer rampage.. and I expect to recieve good service, or I will not pay - so unless the banks start charging fairly - AND LENDING RESPONSIBLY - people will claim their money back.. after all - it is their money... they worked for it... they may have worked for a week to pay that months charges.. Just because you may experience some financial difficulties or are not financially savvy, doesn't mean the banks have the right to poke you with the big money grabbing stick!!!

Chimera

Hazzanet wrote:

Agreed, it's a possible alternative, but for those with small overdrafts, eg: £100, would it sting them hard enough? On large amounts it would hurt like hell, but for the small-time overdraft 28% on £100 only amounts to about £2.50/a month. If I was just coming up to pay day, and was so inclined, I'd probably take that on the nose and not worry about the cost for a couple of days.

They'd have to crank the unauthorise o/d rate to about 60% p.a. to have the desired effect on the smaller borrowers.

Why don't they just make it impossible to go over your limits and return d/d etc but just charge you what it costs... this is possible you know... some banks do it. HSBC will not let me withdraw money/use switch/take d/d's out once my limit is reached... on both my current account and c/card. They have also been pro-active and rang me if a direct debit was to be return to see if I could raise funds to pay it.... I don't mind being charged a small fee for not having the money in the account.. but to find you are not £2 over your limit, but £300 because of charges, is just silly. These smaller charges should also be applied on the next month - not straight away, which would incur more charges. It's just irresponsible - don't let people go over there limit - it's SIMPLE!! and more of a incentive to keep your finances in check - nothing more embarrassing than having your card refused - with the charges, people can hide and bury their head in the sand, often causing long term anxiety and depression (which in turn costs us all money paying for the NHS).. rant rant rant rant rant

Hazzanet

Chimera wrote:

Why don't they just make it impossible to go over your limits and return d/d etc

This I partially agree with. It does seem wrong to deliberately let you exceed the limit.

I know that some Credit Card and Debit Card payments aren't authorised online for various reasons. In a shop I used to work in, a switch/maestro was cleared for anything under £100 without going online, but over £100 would be forced to gain authorisation from the bank. In these cases even if you were within a pound of your limit, and you went and bought something that was £99, it would be authorised by default. Okay, it's a quirk of the system, they shouldn't allow it, but on the other hand, you can get a balance 24/7 from the bank. Telephone, internet and cash machines can all provide this information, so when you are within £1 of the limit, leave the debit/credit card at home, and you can't exceed the limit using that method.

Hazza.

Chrysalis

hsbc from what my sister tells me are very leniant compared to my bank, allowing small unauthorised overdraft breaches and not charging if under £50 and settled within small time. I would guess this isnt the case for everyone tho as the above poster has shown.

Chimera

HSBC are leniant... they will let you off if you have small direct debits etc coming out, so long as you put some money in soon after. But they will not let you go over your credit card limit, or take cash out over your limit. They are also quite responsible, and will take cards off you if you keep offending - my mate had this done for a while, until her banking core was back up to scratch - taught her a lesson...

surfcat

Chimera wrote:

people will claim their money back.. after all - it is their money... they worked for it...

This does seem a little bizarre. Surely the thing about overdrafts is that it is not your money which you have earned, but the banks.

Chrysalis

Chimera wrote:

HSBC are leniant... they will let you off if you have small direct debits etc coming out, so long as you put some money in soon after. But they will not let you go over your credit card limit, or take cash out over your limit. They are also quite responsible, and will take cards off you if you keep offending - my mate had this done for a while, until her banking core was back up to scratch - taught her a lesson...

Thats a decent policy.

Wish I could join hsbc but they have an insane ID policy and I have no photoid.

oldwiring

Having seen the Panorama program a bit belatedly, I think, that unless things change, they should be more stictly regulated and punished for irresponsible lending. Years ago banks were slated for being paternalistic but my goodness it has gone too far the other way.

What a moral fall in the industry!

Dr.Shoe_2

I don't think anyone in their right mind actaully resents the bank from recovering thier true costs for Bouncing things, it is the amount of the charges that is the crux of the OFT ruling. The only people who should be able to levy fines are the courts not commercial institutions.

The decision to bounce cheques and DDs is made at midnight by computer. The other party's bank is informed by electronic means (an automated Email I gather) and the uncleared funds automatically withdrawn from their account. There is no human intervention involved at all, in other words the banks make a profit on the charges. This is the illegal part and this is what people are (and should) reclaim.

The law regarding fines and penalties is quite clear; not even your local council is allowed to profit from parking fines (say) and they're government! Also, no one even tries to suggest that parking fine revenue is used to offset the council tax so how can they suggest that the income from charges subsidises banking, this is just banks' propaganda to make charge claimants unpopular.

The truth is that NitWit's made something like £25 billion profit last year? I'll bet any money you like that the income from charges was a tiny fraction of that, in fact they say that to pay back charges over the last 6 years will cost the industry (that's all the UK banks, credit card companies and loan companies who have ever levied charges) around £1 billion. Assuming that NitWit's (as an example) is responsible for 25% of that that's £250 million over six years which is £40 million per year just over. As a fraction of £25 billion that's just over 0.0025% or 1/625th. If the banks were to impose a monthly charge like the NitWit's disAdvantage Gold account then I think people would quickly vote with their feet- after all, the mutuals which don't allow you to go overdrawn don't need to charge for banking and they pay better interest.

It is actually a myth that banks make all the rest of their profits from the difference in interest rates, they make their profits from investments such as futures, shocks and scares, and gilts. If they were making profits from loans, why do they discount them away as debentures?