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

SnargleFlip

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 think you'll find that the banks 'care' very much about this sort of customer, as they generate an awful lot more revenue for the bank than do the careful customers who stay in credit.

valetman

mramra wrote: »

So you got yourself into a situation where you had £987 of charges in the past. Didn't you learn from that? If it were me it would have scared me so much that I would have ensured I never went into unauthorised arrears ever again.

these charges went back for 5 yrs, and yes i did get them back, although im sayin that a fair charge is ok , an over inflated one is not, if you cant see that , maybe you should check another site :D:D

thriftymomma

Good job I wasn't holding my breath, is all I can say.

jamespir

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...

not true they love customers who get into debt because they get more money out of it

valetman

Eric_Jones wrote: »

I'm generally a big MSE fan (hence the log in) but in this case:
Just DROP IT. Martin, You are wrong.
It is wrong to (in many cases repeatedly) take (spend) money that is not yours. Which is essentially what we are talking about. To then complain its illegal for you to be charged a (relatively small) fee for taking whats not yours , with teh consequence that the rest of us who DO manage our money responsibly should pick up your tab is plain wrong.
I do applaud the fact that this will be looked at GOING FORWARD. IMHO the new contracts should tell customers they have a choice:
a) Have any transaction that takes you overdrawn simply blocked
b) Have such transactions allowed - but be prepared for well publicised (and expensive) charges if you do.

In many countries spending beyond your available funds is theft. We've actually had it very easy in this country.

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

jambosans

SnargleFlip wrote: »

I think you'll find that the banks 'care' very much about this sort of customer, as they generate an awful lot more revenue for the bank than do the careful customers who stay in credit.

Not true. The greater source of revenue comes from the interest rate the bank absorbs before passing a lower rate onto customer's with a credit balance.

To quote myself based on my reading of the 2006 PCA Market Study undertaken by the OFT:-

Insufficient funds charges, net authorised and unauthorised interest on debit balances equates to £3.09 billion in revenue, in comparison to £4.11 billion in revenue from net credit interest alone.

Lending is a big revenue stream, so I'm sure the bank "cares" about that custom, but it is not more than revenue generated by a customer in credit.

SnargleFlip

Eric_Jones wrote: »

I'm generally a big MSE fan (hence the log in) but in this case:
Just DROP IT. Martin, You are wrong.
It is wrong to (in many cases repeatedly) take (spend) money that is not yours. Which is essentially what we are talking about. To then complain its illegal for you to be charged a (relatively small) fee for taking whats not yours , with teh consequence that the rest of us who DO manage our money responsibly should pick up your tab is plain wrong.
I do applaud the fact that this will be looked at GOING FORWARD. IMHO the new contracts should tell customers they have a choice:
a) Have any transaction that takes you overdrawn simply blocked
b) Have such transactions allowed - but be prepared for well publicised (and expensive) charges if you do.

In many countries spending beyond your available funds is theft. We've actually had it very easy in this country.

It is reasonable to charge a small amount for administering overdrafts, in exactly the same way that it is reasonable to charge a small amount for setting up and running internet banking, offering a telephone banking service, sending you statements, indeed all the services that almost all customers, including those in credit, use on a regular basis.

I don't think it's fair that the overall cost of running retail banking should be charged wholly and entirely disproportionately to those who use unauthorised overdrafts.

Free banking is not a right by any means. It's not the case in many other countries. It's not the case for any commercial or business banking in this country.

Eric Jones, please don't moralise on the sins of spending money that is not yours. Exactly the same arguments can be levied against the banks themselves and their despicable behaviour over the course of the past few years (if not decades). It seems we've all ended up paying their overdraft fees!

SnargleFlip

jambosans wrote: »

Insufficient funds charges, net authorised and unauthorised interest on debit balances equates to £3.09 billion in revenue, in comparison to £4.11 billion in revenue from net credit interest alone.

Thanks jambosans, interesting figures. You're right - I forgot that the banks only pass on a tiny proportion of the interest they earn on our credit back to us.

But your figures still help underline the basic argument that unauthorised overdraft fees still represent a very significant lump of revenue for the banks.

MillaJoJo

Stephenbw wrote: »

The only bias I smell is in your post.

The man you are quoting wasn't a spokesman for HSBC he was from the money site Motley Fool.

http://www.fool.co.uk/

Of course i'm bias towards my own point of view. I was talking about the bias within the media, which is supposed to be an unbiased organisation paid for by the public.

Apologies on the incorrect information about the person I quoted. Though I did say "I believe" because I wasn't 100% sure. Though i'm pretty sure HSBC would agree with this notion, and so would I. I'm under no illusions that HSBC are a charity. I know for a fact they are purely a money making organisation that has it's hands in all sorts of dirty little pies.

rattla

"In explaining his ruling, the Supreme Court's president Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the 1999 consumer contract regulations. "

A victory for common sense.... At Last!!!!

everyone who is reclaiming their charges knew they would be charged them, so it wasn't a surprise. Now hopefully I won't have to subsidise those that can't manage their accounts properly, by paying for my bank accounts!