The future of banking on the back of reclaiming Discussion Area

M_Thomson

anntics wrote:

If we must return to charging for banking services, (and we pay for all other services regardless of the profits the company makes), then a monthly account fee, imho, would be preferable to ad hoc charges for individual services. At least I will know exactly what I will have to pay and the competition to keep/attract customers might soon drive the charges back down.

So is it fair on people who are on modest incomes like myself or people who struggle on very low incomes and never get charged may in the future to pay a monthly fee for banking, because a lot of people who have claimed back charges don't take responsiblility for their financial affairs? The answer is no!

jonesMUFCforever

The answer to all this is quite simple - live within your means!
If you have to borrow then make sure that you have sufficent disposable income to meet repayments. If you do not have the money don't buy it.

FOREVERYOUNG

I do feel for you in your situation but this is not the bank's fault. In a perfect world if a government agency cocked up and was at fault they should be made to pay the bank's fines on your behalf.

odLott

I think a lot of people miss the point that these charges are illegal. Nobody is saying that banks shouldn't recover their costs, but they are obvisouly treating these charges as a profit centre.

I think that one of the consequences of the banks not being able to make easy money by ripping off people will be a consolidation in the industry. It's already happening, but the need the contain costs will probably accelerate this.

I can see interest rates on current accounts going down and savings accounts becoming less and less "instant access". I think charging for a current account and a credit card might prove a bit too unpopular, but it only takes a few banks to start the process.

This said it's not all that bad. In order to justify charging for these services they will need to add some value, so we might actually start seeing some interesting products.

mountainofdebt

odLott wrote:

I think a lot of people miss the point that these charges are illegal. Nobody is saying that banks shouldn't recover their costs, but they are obvisouly treating these charges as a profit centre.

I think that one of the consequences of the banks not being able to make easy money by ripping off people will be a consolidation in the industry. It's already happening, but the need the contain costs will probably accelerate this.

I can see interest rates on current accounts going down and savings accounts becoming less and less "instant access". I think charging for a current account and a credit card might prove a bit too unpopular, but it only takes a few banks to start the process.

This said it's not all that bad. In order to justify charging for these services they will need to add some value, so we might actually start seeing some interesting products.

I totally agree with this .....how the dickens can a business justify charging £38 when everything is automated if its not to make profit???

As for interest on current accounts - do they actually do this??

One other interesting point - banks currently charge about £30 for express clearance of a cheque - I was told once that what this actually means is that instead of the cheque being sent to the issuing bank by 2nd class post, it's sent by1st class post....hardly worth £30 me thinks.

M_Thomson

mountainofdebt wrote:

As for interest on current accounts - do they actually do this??

Err, yes, lots of banks currently pay up to 5% interest on current accounts.

mountainofdebt wrote:

One other interesting point - banks currently charge about £30 for express clearance of a cheque - I was told once that what this actually means is that instead of the cheque being sent to the issuing bank by 2nd class post, it's sent by1st class post....hardly worth £30 me thinks.

No it doesn't cost £30, most banks charge around £12 for this. Not sure where you got the £30 from??!

dchurch24

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.

lynzpower

I dont suppose anyone expects some of the shareholders to take slightly lower bonuses instead do they? Since they have been unlawfully making charges for many of us for such a long time, and this cash cows off to the slaughterhouse, seems the little guy has to cough up yet again?

some of the more palatable options for me would be
a) stop wasting thousands of pounds on promotional literature & emails for secured loans, other loans, car insurance etc, none of which I have a need or desire for
b)stop wasting staffing & utility costs for getting your staff to call me with above promotional deals and wasting my time and thier money
c) stop farming your call centres out to India so that when I do call I dont have to be put through to about five people to simply make a payment to my credit card.
d) get a website that actually works properly meaning that me and countless other people dont tie up staff on the phone.
e) stop these meetings with account execs orwhatever they choose to call them which are designed to offer me car insurance for a car I dont have or other useless products.

they make money day in day out, astonomical amounts of money, not just from charging, but on interest, cashing & clearing cheques, along with the macro stuff of investing in dodgy stuff and buying and selling currencies.

MPH80

lynzpower wrote:

some of the more palatable options for me would be
a) stop wasting thousands of pounds on promotional literature & emails for secured loans, other loans, car insurance etc, none of which I have a need or desire for

You might have no desire - but the marketing clearly works or they wouldn't do it. If you want to opt out of receiving it - you can under the DPA.

b)stop wasting staffing & utility costs for getting your staff to call me with above promotional deals and wasting my time and thier money

Once more - you can opt out if you really feel so strongly about it - but it clearly works - any business will have built these items into their cost. So if they DO do either of the above, they won't just reduce they're costs - they'll actually reduce their profit more.

c) stop farming your call centres out to India so that when I do call I dont have to be put through to about five people to simply make a payment to my credit card.

So they have to pay more to the same number of people in the UK ... further reducing profit ...

d) get a website that actually works properly meaning that me and countless other people dont tie up staff on the phone.

Never had a problem with any online bank website. Even A&L's security upgrade went fine for me. However, I agree - even more facilities online would save them cash in the long run.

e) stop these meetings with account execs or whatever they choose to call them which are designed to offer me car insurance for a car I dont have or other useless products.

Once again - it clearly works otherwise they wouldn't do it!!

All you've suggested is further ways for the banks to reduce their profits and thus increase the amount they'll have to charge customers day-to-day.

M.

jonesMUFCforever

Part quote from mountainofdebt
As for interest on current accounts - do they actually do this??

One other interesting point - banks currently charge about £30 for express clearance of a cheque - I was told once that what this actually means is that instead of the cheque being sent to the issuing bank by 2nd class post, it's sent by1st class post....hardly worth £30 me thinks.

Mine does - you can make 4% gross

I don't know where you bank but £30 for a special clearance is ridiculous - mine charges £10.
The service is to post the cheque to the drawer's bank (bypassing the clearing cycle - which is sent overnight by courier not 2nd class post!).The service is just for you to know whether the cheque WILL be cleared and does not mean you can spend it any earlier.

krisskross

I was living in Spain. For a perfectly ordinary accountwe paid €3.75 a month. We had an electron card each and this cost us €13 every year. No overdraft was allowed on our account and I was told it was considered fraudulent to write a bouncy cheque.