The future of banking on the back of reclaiming Discussion Area

MPH80

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

Yes - because that really intense competition between banks caused those balance transfers to start with really high uncapped fees and for them to come down to £0 right?

Oh wait - no - it happened the other way around ...

It'll only take the first bank to break ranks and the rest will follow ... some people might change banks - but I bet the bulk of the UK population will react with complete inertia.

M.

Hereward

I have been considering this for a while now, and having read the arguments on other threads, I see the personal current account market splitting into two: basic accounts and "normal" current accounts.

Basic accounts would be available to everybody and would not offer any fee, but there would be a limited number of services associated with them: standing orders, direct debits and "simple" debit cards (Electron/Solo); these account would not have an overdraft facility. These would operate similar to the current basic bank accounts, if not be the ones currently on offer.

“Normal” current accounts would be free to those that could meet certain conditions: pay in over a give amount each month or maintain a certain balance. All other customers would have to pay a fee for these accounts. Normal current accounts would offer all of the services currently available to current account holders (fee and non-fee based): overdrafts, better (?) interest rates, free insurance.

Splitting the current account market would enable account holders to choose the features they want and pay the price that the deem fair; Banks would be able to lower their current charges regime as they would be able to cut the number of less profitable customers from their loss-making accounts.

Mark7799

I would question if direct debits should be offered on the basic accounts you describe given the number of customers who seem to have trouble with them.

Hereward

Mark7799 wrote:

I would question if direct debits should be offered on the basic accounts you describe given the number of customers who seem to have trouble with them.

True, having a look at the current crop of basic bank account I have noticed that most of them do not offer this service. I envisage that only some of the accounts I mention above will have this facility.

dhug

Banks will in the future charge for transactions exactly as Banks in other countries do, I for one wouldnt mind paying for banking facilities as long as those facilities are up to scratch. Decent UK based customer services, decent interest rates, realisitc charges if you do for whatever reason go over your overdraft, range of products available and so on.
However I do feel that direct debits facilities should be available to all, if you cant pay your bills by direct debit you pay more so restricting them means that you will be putting even more pressure on some people than they have at present, as for managing DD well just set them up to go out the same day or day after youre paid then you know exactly how much you have left for the rest of the month or if paid weekly have an automatic transfer to a different sccount for the total amount divided by 4

Mark7799

Unfortunately, direct debits are claimed by the beneficiaries so you may not have a choice as to the day the payment goes out.

rosybunny06

dchurch24 wrote:

I see the 'don't spend money you haven't got' brigade are here - not entirely relevent to the thread, but, what about being charged for NOT spending money you haven't got - i.e. bounced DD's etc...? Where is the "service" that has been provided in that case. Those charges are far more damaging than an "over od fee", as you will/can get a lot more of those in one month.

Anyway, the question was about what will happen to uk banking.

Many people feel that the propaganda touted by the BBA - i.e. everyone will have to pay for banking now... is the route that they will take.

Luckily, in the EU (and as EU citizens) we have laws that protect us from things like that.

We do not have the choice legally to choose how/when our wages are paid (as most EU citizens do, thus making their banks who charge for services act within the law) - that is the choice of our employers (since, 1986(4?)). Therefore, by just going to work for an employer, as most people do, then we would be forced into buying a third party, private sector 'product' by legislation - a direct breach of the EUHR laws. Therefore it cannot happen, and is, as I have pointed out, propaganda.

There is also legislation in place governing "basic" bank accounts - the banks are NOT ALLOWED to stop offering them, so they will not shut those down.

My guess is that they either lump it and say "oh, well. We got away with it for many years, adding up to billions upon billions, so we're ok" - which, given the greed and general contempt that banks have for customers is unlikely, OR they will just find another equally nasty little way of extracting that money from some other way, such as expanding the amount of time cheques et al, take to 'clear' until they get rapped on the knuckles for that too.

Hello dchurch24
Thank goodness for a voice of reason on this thread :T and boo to all the offensive, ignorant remarks made by some of the other members I am so glad you are all so clever with your money and so lucky never to have had any problems with your bank and misfortune in your lives.

Gorgeous_George

Maybe the banks could text us when a DD/SO/cheque cannot be paid.

The text could give us 24 hours to deposit in cash and they should only bounce the payment if we failed cover the withdrawal. A charge of, say, £1.50 for each text would be reasonable for this service.

It could save some embarrassment and additional costs.

FWIW, my view is that unauthorised overdrafts are theft and potentially a case for the criminal justice system to deal with. And yes, I've been there - but probably would not have if I knew doing so could have resulted in a criminal conviction.




GG

oldwiring

dhug wrote:

Banks will in the future charge for transactions exactly as Banks in other countries do, I for one wouldnt mind paying for banking facilities as long as those facilities are up to scratch. Decent UK based customer services, decent interest rates, realisitc charges if you do for whatever reason go over your overdraft, range of products available and so on.
However I do feel that direct debits facilities should be available to all, if you cant pay your bills by direct debit you pay more so restricting them means that you will be putting even more pressure on some people than they have at present, as for managing DD well just set them up to go out the same day or day after youre paid then you know exactly how much you have left for the rest of the month or if paid weekly have an automatic transfer to a different sccount for the total amount divided by 4

As a retired bank employee I admit I cannot be totally objective about account maintenance charges, but I do agree that the quids pro quo must include up to the mark service provision, such as most would want. However, the human trait of thinking, that the service element we demand is one most would too, is not true in every case. In reality it may be something outside the norm, and so worthy of charge. I also agree that interest paid on current account balances may need to increase, but, as balances on current accounts in general are more fugitive, this will not be as good as for savings accounts. Another question arises, whether the interest be actually paid out and so be, in most cases, after tax, or be a notional offset against charges calculated gross, any excess of the offset being lost to the customer.

I think your point about ,// if you cant pay your bills by direct debit you pay more so restricting them means that you will be putting even more pressure on some people than they have at present,// is one worthy of consideration beyond the banking forum and so I have created a thread in the Money Savers Arms - Ebico-style equality for all

Chrysalis

Hereward wrote:

I have been considering this for a while now, and having read the arguments on other threads, I see the personal current account market splitting into two: basic accounts and "normal" current accounts.

Basic accounts would be available to everybody and would not offer any fee, but there would be a limited number of services associated with them: standing orders, direct debits and "simple" debit cards (Electron/Solo); these account would not have an overdraft facility. These would operate similar to the current basic bank accounts, if not be the ones currently on offer.

“Normal” current accounts would be free to those that could meet certain conditions: pay in over a give amount each month or maintain a certain balance. All other customers would have to pay a fee for these accounts. Normal current accounts would offer all of the services currently available to current account holders (fee and non-fee based): overdrafts, better (?) interest rates, free insurance.

Splitting the current account market would enable account holders to choose the features they want and pay the price that the deem fair; Banks would be able to lower their current charges regime as they would be able to cut the number of less profitable customers from their loss-making accounts.

doesnt this exist now.

my current account has what you call the basic account.

I pay £7 a month for a select account upgrade which gives me an overdraft limit and superior interest rate, this fee is apperently waived if enough money goes into the account each month or has a large balance. I have a proper visa debit card but this only was offered after approx 2 years not when I opened the account.

Banks make more money from people who frequently incur bank charges, monthly interest on a £1500 loan is probably less then one bounced direct debit fee. Your idea of allowing direct debits and standing orders on the free basic accounts is exactly what is offered now, these direct debits and SOs are what incrue the charges when they bounce or if customer is lucky they clear and charged, removing any overdraft limit doesnt magically stop this. Since the customer simply has to drop below 0 instead of -limit.

What I have noticed with banks as buffy said on the tv show, banks only will lend you money if you prove you dont actually need it. If banks were to auto apply a temp overdraft so payments were cleared then the customer wouldnt have a nasty fee and the temp overdraft would have to be removed within say a month. To stop abuse of this system to qualify for the temp overdraft you must not have had a breach of limit during last 6 months or maybe 3 months.