The future of banking on the back of reclaiming Discussion Area

Chrysalis

foreveryoung wrote:

Hi I am very savvy with money, I am in a position where I have to be paid by the Benefits agency into a Bank Account, I have owned my own home and business and am a super saver bargin hunter, I have struggled this week to put enough food on the table for my children, why, because money was not paid into m y account over 4 weeks ago, yes I am getting the payments back soon at some point, but not today, not when I need them. I live in a village and sometimes when I am on Incomming calls only I cant just ring the bank or get the DSS to answer the phone on a monday or tuesday because they are so busy with all the mistakes they have made. I am on a limited income, if I do not use Direct Debits I get charges 10% more on my bills, The local post office's have closed so I have to rely on the banking system to not mess up and the Benefit office not to mess up, I have not messed up, and lots of people who are in the same mess as me are really already struggling to make ends meet or they wouldnt of got charged in the first place, I wish I could have 1.000 just sitting in the bank for a rainy day, but with 3 young children and one with exceptionally high attention needs and destructive behaviour at time, there is never any spare money to cover situations when money hasnt gone in when it should. I have been so let down by the system as I feel like a criminal being threatened all the time with some sort of action or another, and frankly its time it stopped, I would be happy without a bank account, I have never made any money having one, in fact its cost me probably 4.000 having one. I will happily go all the way to the court for my money as they have caused me extreme suffering and poverty. I have tried to be a good person and would not dream of ripping people off and am losing faith very fast in all the services this country my father and his father thought fit to fight for RIP.

Sorry I do not want to offend anybody but I feel offended by the reference to our debts as being made by idiots who cant read or manage our money. I am not enviouse of anyone having money, well done I say, its how it should be, and I wish I could strive for the same, but at the moment I am having to care for my son 24/7 so I am at the mercy of the system in place.

Chrissie

correct, been savvy doesnt mean always avoiding charges, its obviously easier to be savvy when you on 100k a year then if you no 5k a year and some people cant grasp this.

Banks taking stupid lengths of times to clear chequest etc. (much longer then eu countries) make matters worse.

dhug

This is my very first post here after lurking for some time

Last year the Inland revenue stopped paying my child tax credits without an y notice, I had apparently "slipped of the system" due to a software problem that they knew about. As a result over the 6 months it took for them to sort it out I incurred bank charges of over £600 every month was harder than the last making sure the mortgage and everything was paid and there was food to eat, I rang the bank and explained the situation and whilst they were very understanding and helpful they still charged me, once it was sorted I tried to reclaim the charges as suggested by an earlier poster from the Inland revenue and got nowhere, eventually the £900 owed to me by the Inland revenue was paid and everything got back to normal but after 6 months of sheer hell not helped by the fact that my father had died during all this and now 12 months later I feel I am back on an even keel

I am in the process off reclaiming those charges, not because I dont think banks should charge for OD's but because the level of those charges is ridiculous, at no time during those months was I more than £50 over my agreed limit yet in one month I was charged £160. When I started the process of reclaiming the charges over a month ago I wrote to the bank and stated that I was prepared to settle for an amount that included a charge of £12 for each occasion but they didn't want to know. I am not against banks charging but that charge should be proportionate to the degree of the OD say a percentage of 15% on any OD over the limit, that way the banks can recoup some of their costs, and why shouldn't they they are a buisness, and the customer pays an amount proportionate to what they have gone over.

I suspect though that banks will just close customers accounts leaving people "out in the cold" and carry on making money hand over fist from those customers left, by introducing new charges, after all if they close the accounts of the people who are presently paying these huge penalties then they have to make it up somewhere

gt94sss2

You understand that I am playing devils adovate here and not necessarily stating my own views.

Chrysalis wrote:

Regarding A, its supposed to be a fundamental right to be able to open a bank account if basic accounts are scrapped will they give out current accounts with the same ease?

There is a fundamental right to have a bank account? I must have missed that one.. some banks offer basic bank accounts following a voluntary agreement with the government.

They could simply stop doing this and going back to cherry picking customers. Then if there were a large number of people without an bank account, I imagine the Post Office or National Savings would be "encouraged" to introduce an alternative by the government

Regarding B, in principle I agree but their is potential flaws here that the charge needs to be very nominal or we are going to financially exclude many low income people and benefit claimants.
Regarding C, for same reason as B this needs to be done fairly so % of total withdrawal rather then fixed fee as poorer people are likely to make small withdrawals more often rather then £200+ withdrawals.

Banks are businesses - their main in interest is in profit/shareholder returns - its not in their interests to worry about low income people and benefit claimants (unless they are able to make a decent return) - it would be for the state (perhaps building societies?) to worry about these..

Regarding D, most overdraft facilities have a charge anyway I see no problem with the current system, why reduce overdraft limits?

Many overdraft facilities have no fee if you don't use them. Others even have "buffer zones" were you will get marginal (or zero) charges if you go upto £10/100 overdrawn. These could easily stop with a monthly charge just for having any overdraft facility even if you don't use it, with a higher account fee, the larger the maximum overdraft limit.

Regards
Sunil

gt94sss2

Chrysalis wrote:

Banks taking stupid lengths of times to clear chequest etc. (much longer then eu countries) make matters worse.

Its worth remembering a couple of things here:

1. Some people, especially those who find it difficult to make ends meet are able to use the cheque clearing cycle to their advantage.

2. I think its been announced that in the next year or so, the time taken for BACS payments to move between banks is going to be reduced - when it is, its the loss of another "profit source" for the banks...

Regards
Sunil

lynzpower

gt94sss2 wrote:

You understand that I am playing devils adovate here and not necessarily stating my own views.



There is a fundamental right to have a bank account? I must have missed that one.. some banks offer basic bank accounts following a voluntary agreement with the government.

They could simply stop doing this and going back to cherry picking customers. Then if there were a large number of people without an bank account, I imagine the Post Office or National Savings would be "encouraged" to introduce an alternative by the government



Banks are businesses - their main in interest is in profit/shareholder returns - its not in their interests to worry about low income people and benefit claimants (unless they are able to make a decent return) - it would be for the state (perhaps building societies?) to worry about these..



Many overdraft facilities have no fee if you don't use them. Others even have "buffer zones" were you will get marginal (or zero) charges if you go upto £10/100 overdrawn. These could easily stop with a monthly charge just for having any overdraft facility even if you don't use it, with a higher account fee, the larger the maximum overdraft limit.

Regards
Sunil

there is lots of work undertaken by the FSA
Check here http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/2005/0627_cm.shtml

and here
http://www.toynbeehall.org.uk/safe.htm

To ensure those on the margins of society are financially included. Having been on a training course with Safe, the most apparent thing to me was that its of course impossible to get a job without a bank account. Its also impossible to claim most benefits.

If you want the banks to pull basic bank accounts be prepared to have higher unemployment, higher degrees of exclusion, and resulting social problems such as domestic violence, abuse, alcolism etc, which all are higher in socially and economically excluded communities.

Basic bank accounts cost very little to administer I would have thought (esp with the banks seemingly so proactive with the FSA) when you consider other arms of banking.

dchurch24

gt94sss2 wrote:

Its worth remembering a couple of things here:

1. Some people, especially those who find it difficult to make ends meet are able to use the cheque clearing cycle to their advantage.

2. I think its been announced that in the next year or so, the time taken for BACS payments to move between banks is going to be reduced - when it is, its the loss of another "profit source" for the banks...

Regards
Sunil

Point 1. If you mean that people are writing cheques against payments they know are coming into the account, but are writing them on a day where the funds are not available, then technically this is fraud.

Point 2. It's worth remembering that banks work for us (or at least used to), and that's how they make their profit. If banks are forced to 'clear' cheques the same day (as they are in Sweden) and are forced to stop unlawfully penalising people, then their profits will drop to (in the case of HSBC - based on the Which! research and their public profit information) 'only' make 9.1 billion, instead of the 11.9 they made this year. Still a 'healthy' profit by anyone's standards.


To put it in perspective: Paul Mcartney, after over 4 decades of selling music (his own and many, many others - he owns the entire Buddy Holly catalog, almost all the theme tunes from things like 'Love Boat', "I love Lucy" etc...), has 800 million pounds in assets. He's not short of a few bob. Does he need more than that? Does a bank have to make 11.9 billion in ONE year?

If their profits dropped slightly because they were slightly more ethical and reasonable to the very people that keep them making profits, would it matter all that much?

grumbler

dchurch24 wrote:

... 'only' make 9.1 billion, instead of the 11.9 they made this year. Still a 'healthy' profit by anyone's standards.

All these 'only' and juggling with billions don't make any sense.

Three hairs - is it many or not?
Many - if they are in your soup.
Not - if it is all you have on your head.

I am not an expert, but I know that if you really want to prove your point, you should quote some other specific financial factors: ROI, ROA, ROCE, EPS ... - and compare these factors with those for other companies.

Chrysalis

gt94sss2 wrote:

You understand that I am playing devils adovate here and not necessarily stating my own views.



There is a fundamental right to have a bank account? I must have missed that one.. some banks offer basic bank accounts following a voluntary agreement with the government.

They could simply stop doing this and going back to cherry picking customers. Then if there were a large number of people without an bank account, I imagine the Post Office or National Savings would be "encouraged" to introduce an alternative by the government



Banks are businesses - their main in interest is in profit/shareholder returns - its not in their interests to worry about low income people and benefit claimants (unless they are able to make a decent return) - it would be for the state (perhaps building societies?) to worry about these..



Many overdraft facilities have no fee if you don't use them. Others even have "buffer zones" were you will get marginal (or zero) charges if you go upto £10/100 overdrawn. These could easily stop with a monthly charge just for having any overdraft facility even if you don't use it, with a higher account fee, the larger the maximum overdraft limit.

Regards
Sunil

flawed argument, if you remove all low income and benefit claimants from the banks books the charges become mute because they will suddenly have lost probably nearly all their penalty charge income. For this reason I doubt they will be wanting to kill of all these accounts.

Who do you think pays for your free banking?

If the above scenario occured the banks would likely start some alternative form of profit making.

I also think their is such thing as excessive markup/profits.

The government could legally cap profits and the banks could then of course pull out of doing business in this country, but they wouldnt. Better to make small profit then nothing.

Turning_into_scrooge

ejones999 wrote:

I have a vested interest as I work in a bank.
Some of the points posted by above posters are very valid but if the government get really tough with the banks then I see the following scenarios
1 Banks will get rid of 'basic' bank accounts as they produce no income and cost to run.

If they can't because of poor financial records then tough!

OK so where does that leave me? LLoydsTSB defaulted me through their stuff ups
http://forums.moneysavingexpert.com/showthread.html?t=210822

post #5 will explain my problem and why i am claiming bank charges back. So in your opinion its going to be tough for me if i cannot find another account, There are a few who are not money chasers here please don't tar us all some of us are genuine:)

You also need to be aware here that the government is trying to do away with post office accounts for benefits and make everyone have a bank account so if they get rid of the basic account will they go back to benefit payment books? i doubt it People will have to be paid somehow also the right was taken away from the worker to have their wags paid by cheque or cash and made to be paid into a bank, that rule will have to change as well.

jonesMUFCforever

part quote from dchurch 24

To put it in perspective: Paul Mcartney, after over 4 decades of selling music (his own and many, many others - he owns the entire Buddy Holly catalog, almost all the theme tunes from things like 'Love Boat', "I love Lucy" etc...), has 800 million pounds in assets. He's not short of a few bob. Does he need more than that? Does a bank have to make 11.9 billion in ONE year?

Out of that 11.9 how much has gone in tax and dividends?