MSE News: Bank charges update: the phoenix from the flames + full Q&A

aliste

hi, my husband has an account with the natwest. he used to have direct debits on this account. he rang the bank and asked to cancel the dd's and they said they would.
we then got a statement saying he had been charged for non payment of dd's even though they had been asked to cancel them.
they are charging us every month even though he does not use this account, as of today the charges stand at £700+ pounds owing in charges.
we are refusing to pay this as we had totally cleared any outstanding amounts on this account. the dd's on this account are being paid from my account now so its not because we not paying them.
my husband is now off work due to illness and money is tight, as some people on here have said that going over your overdraft is theft and we should be charged.
does this mean the bank is now stealing from us?
yes maybe people should keep an eye on their finances better but because of the things life throws at you sometimes it is not always possible.

[Deleted User]

pie81 wrote: »

Sorry... but the type of customer who is upset about bank charges, is generally the type of customer banks aren't too bothered about losing...

I felt compelled to shame this person with the facts after his reply to a post about boycotting the banks.

If he/she actually read through the judgement he might have noticed a little comment and probably the core argument by the banks.

It went along the lines of "the banks rely on these charges, part of the core cost of running a bank account, to turn a profit"

I.e. If no one ever incurred bank charges the bank couldn't run your account and make money (which I think they quite like by the sounds of it). And they would probably introduce a monthly fee for everyone.

Everyone posting about how they're glad the banks won because it means free banking will continue should take time to consider that, as you can quite clearly see in the judgement, your "free" banking is paid for by those who make mistakes or are in the unfortunate position of not having any choice by losing their job for example.

There's no such thing as a free lunch, only the illusion. I believe there is a good book about tht subject actually.

[Deleted User]

Got a bit carried away there an forgot the main point of my reply to mr pie.

I think the banks would be bothered about losing us "bad" customers. How much money have they made out of you mr pie?? I assume your a "good" customer...

ILW

valetman wrote: »

I think you have missed the point entirely,, it doesnt matter how well publicised the charges are, if they are unfair and over inflated they should never be allowed to stand. banks should not be allowed to put customers over a barrel by saying that if you dont like it, tough, realistic charges are fair enough, but we should not be ripped off by them :D:D

I agree, I went to buy a Bentley the other day and the advertised price was £150,000. That is more than I can afford so I think their should be a campaign and court case to reduce the price to a level which I find acceptable. I cannot see how they jusify this amount. I doubt it costs them anything like that to make one. Its just a way of keeping the poor poor. Can Martin start a new campaign "fairness to Bentley purchasers".

[Deleted User]

ILW wrote: »

I agree, I went to buy a Bentley the other day and the advertised price was £150,000. That is more than I can afford so I think their should be a campaign and court case to reduce the price to a level which I find acceptable. I cannot see how they jusify this amount. I doubt it costs them anything like that to make one. Its just a way of keeping the poor poor. Can Martin start a new campaign "fairness to Bentley purchasers".

But you didn't read the small print when you signed for delivery of your Bentley. And why would you? You've just bought it for £150,000 and signing for delivery is just a formality. Let me point it out to:

"we will charge you £1000 for every mile you want to drive your lovely new car"

and seeing as this was in the terms you weren't given time to read before signing, that's completely fair isn't it?

lil_me

I totally understand what you are saying ILW

2 young children, partner on minimum wage & I was unable to work due to illness (not getting DLA etc) and we always managed to make sure we got no charges as I didn't want to pay fees. If I couldn't pay a direct debit I cancelled it instead of asking the banks to cover it & asked for more time to pay. Not once did I expect the bank to cover it. With gas/elec got key & card meters, put on what I could if it ran out we did without. Will it cost me as a customer who keeps a credit balance when people have their fees refunded?

I read the small print, I don't want to pay fees so I ran my account accordingly. I've always asked what fees are, there is leaflets in the bank & they send me them. Regardless I wouldn't let it go overdrawn without an authorused overdraft as it is not my money. (I do have an agreed OD but don't use it) It's ok saying they didn't tell us these charges but if it you didn't have money in your account how can you expect to use someone elses free? I have had debt inc loans etc but they are agreed amounts I paid for.

Spoke to a young man yesterday who was annoyed as he's deliberately abused his bank thinking he would get the fees back & is no worried. Annoying!

ILW

neilwjsimpson wrote: »

But you didn't read the small print when you signed for delivery of your Bentley. And why would you? You've just bought it for £150,000 and signing for delivery is just a formality. Let me point it out to:

"we will charge you £1000 for every mile you want to drive your lovely new car"

and seeing as this was in the terms you weren't given time to read before signing, that's completely fair isn't it?

I never sign anything without reading it first, why would I?

Anybody that did not know about bank charges must have been living on another planet.

pie81

neilwjsimpson wrote: »

Got a bit carried away there an forgot the main point of my reply to mr pie.

I think the banks would be bothered about losing us "bad" customers. How much money have they made out of you mr pie?? I assume your a "good" customer...

If you read the judgment you will see that 30% of the banks revenue comes from bank charges but 50% comes from lending out money that in-credit customers keep in their amount. So they make more money from in-credit customers than overdrawn customers.

Banks also make losses from some overdrawn customers who don't pay their overdraft back in full and go onto IVAs or go bankrupt instead.

So while banks do of course make lots of money from people who incur bank charges, I suspect they wouldn't be too upset to only have customers who stay in credit and never incur these charges.

Personally I believe bank charges are at an unfair level, however I don't think boycotting one bank is going to help, for the reasons above.

Oh and I'm a Miss not a Mr

mollyeyre_2

I really don't understand the hype about these bank charges. If my neighbour came into my house and took a loaf of bread without asking I would not be happy. Would his defence be that he had run out of bread so was entitled to do this??

There are enough ways to make sure that an overdraft can be set up - so why shouldn't one be penalised if one uses the facility without permission???

Centium5000

mollyeyre wrote: »

I really don't understand the hype about these bank charges. If my neighbour came into my house and took a loaf of bread without asking I would not be happy. Would his defence be that he had run out of bread so was entitled to do this??

There are enough ways to make sure that an overdraft can be set up - so why shouldn't one be penalised if one uses the facility without permission???

The point is these are not considered to be 'penalty charges' by the banks, they are a charge for service, and the Supreme Court agrees.

As such they don't need to bear any relation to the cost of providing the service; it's a good job because the banks admit these generate profit far in excess of actual cost.

These profits pay for free banking, plus a (sizeable) bit extra for the shareholders.

A general banking charge wouldn't amount to 'good' customers paying for 'bad' customers - it would merely require them to contribute more fairly to the cost of providing those services.

That 'loaf of bread' was provided under a contract for services and is therefore in no way theft. The analogy doesn't hold.