Realy do not - understand- bank charges

WestonDave

Cross subsidy isn't in itself unfair, otherwise the train companies (and others) have a big problem if a case on that basis succeeds. If you buy a peak rail ticket at the station at the time of travel, you will pay a lot more for the same journey on the same train with same staff, as if you book in advance and travel off peak. The peak fares act partly as a deterrent and partly as a cross subsidy. To a degree (and all analogies fall over if pushed too far) bank accounts work in the same way. If you book ahead and get your overdraft sorted then you will pay a lot less than if you pitch up on the spur of the moment and electronically demand an overdraft. I'm unclear why its OK for the train companies to charge a lot more if you have to travel suddenly because Aunt Flo has been taken ill, but not OK for the bank to charge more because you suddenly need the money to buy the ticket?

I personally wouldn't overly object to a fairer sharing out of charges, but I'm a bit wary of the law of unintended consequences. To a degree at the moment the system provides banks with an incentive to provide funds at short notice in emergencies. If you take away the profit incentive there, how does society look after the family who find their fridge has broken overnight, its now Saturday and they need food before they can get more money from anyone on Monday? The danger is that if you start messing with one part of the system other parts that balance it, move as well, and you end up with other problems.

voiceofreason

ILW wrote: »

So only people who can prove they had an above average education should be allowed to have bank accounts?

Christ, you're dull.

euronorris

ILW wrote: »

So only people who can prove they had an above average education should be allowed to have bank accounts?

No, and I cannot see how you got that from my post?!

I'm saying that we need to introduce financial education in schools and that the banks have a responsibility to ensure that the people they lend to understand exactly what it is they are taking on.

And not by asking 'do you understand' or 'sign here to confirm your understanding'. I mean by really explaining the product to the consumer. And asking a question such as 'Do you understand the implications of late payment?' and if they say yes, this should be followed by 'OK, can you please confirm what actions you believe will be taken should this happen?' etc. Something along those lines.

ILW

euronorris wrote: »

No, and I cannot see how you got that from my post?!

I'm saying that we need to introduce financial education in schools and that the banks have a responsibility to ensure that the people they lend to understand exactly what it is they are taking on.

And not by asking 'do you understand' or 'sign here to confirm your understanding'. I mean by really explaining the product to the consumer. And asking a question such as 'Do you understand the implications of late payment?' and if they say yes, this should be followed by 'OK, can you please confirm what actions you believe will be taken should this happen?' etc. Something along those lines.

At which point during this process is the customer deemed officially "too thick" to have a loan, and shown the door?

euronorris

ILW wrote: »

At which point during this process is the customer deemed officially "too thick" to have a loan, and shown the door?

I have never referred to anyone as 'too thick' and would appreciate it if you didn't also. It is unecessary.

If a consumer cannot demonstrate that they fully understand, even after further explanation, then they should be declined.

Do you have a particular issue with my suggestions?

SunnySusie

I was watching a lady interviewed on the news earlier this week and she mentioned how she paid no interest in how much money she was spending. One day she was overdrawn, she was fined (sorry, I mean charged) and she described how she had to work hard to pay off her debt. And then the interesting bit, she went on to say how careful she now is and how she has resolved to never fall into that trap again. Am I alone in thinking that in her case at least, the bank seems to have taught her a lesson that she can take forward from here.

Is it really education? My grandfather left school at 14 or something like that and went straight down the mines. Yet he was well aware that you can only spend money that you have.

As a society we just can't make up our mind whether we want a nanny state or not. One minute we are lambasting the latest government interfering scheme and the next we are complaining that they haven't protected us!

Personally I am pro people looking after themselves (where they are able). But agree that a simple solution would be to prevent banks from allowing people to go overdrawn without an agreement. I fully understand that many of us, myself included, don't have it easy - yet somehow the rest of us manage.

NowWhat? wrote: »

Please don’t be mislead by my lack of posts – I usually share an account with my partner and we are over the 3000 count.

Yikes please don't go down the post count route - I normally expect that on kiddie gaming forums! I really don't think post count, as you ironically pointed out, is necessarily linked to how much of this forum you read! And there are plenty of people with super high counts that spout an awful lot of nonsense!!

ILW

euronorris wrote: »

I have never referred to anyone as 'too thick' and would appreciate it if you didn't also. It is unecessary.

If a consumer cannot demonstrate that they fully understand, even after further explanation, then they should be declined.

Do you have a particular issue with my suggestions?

The only issue I have is that it is unworkable, to me "cannot demonstrate they fully understand, even after further explanation" and "too thick" are basically the same thing. I would rather some bod at the bank was not making such judgements.

euronorris

SunnySusie wrote: »

Is it really education? My grandfather left school at 14 or something like that and went straight down the mines. Yet he was well aware that you can only spend money that you have.

As a society we just can't make up our mind whether we want a nanny state or not. One minute we are lambasting the latest government interfering scheme and the next we are complaining that they haven't protected us!

I see your point, but things have obviously changed since then and somewhere along the way, this very valuable skill has been lost for a large number of the population.

Some people are capable but are simply too relaxed about it all, and others have a genuine need for education in that area.

And I don't mean that we need to be exceptionally strict with it and have qualifications for it even. It could be as simple as a one hour class per week in the final year of school.

Or even, have it available to all, separately from school. A government run course than you can take.

euronorris

ILW wrote: »

The only issue I have is that it is unworkable, to me "cannot demonstrate they fully understand, even after further explanation" and "too thick" are basically the same thing. I would rather some bod at the bank was not making such judgements.

Why is it unworkable? And do you think their current practices are OK? That they didn't lead to such large problems in the first place? They aren't entirely to blame, but they didn't lend responsibly either and in some cases completely illogically.

"cannot demonstrate they fully understand, even after further explanation" and "too thick" are absolutely not the same thing! People have different strengths and weaknesses. Just because they don't understand financial products does not mean they are 'thick', as you say. They may run circles round you when it comes to computer programming, for instance. It is wrong and foolish to judge someone's intelligence based on one skill alone.

ILW

euronorris wrote: »

Why is it unworkable? And do you think their current practices are OK? That they didn't lead to such large problems in the first place? They aren't entirely to blame, but they didn't lend responsibly either and in some cases completely illogically.

"cannot demonstrate they fully understand, even after further explanation" and "too thick" are absolutely not the same thing! People have different strengths and weaknesses. Just because they don't understand financial products does not mean they are 'thick', as you say. They may run circles round you when it comes to computer programming, for instance. It is wrong and foolish to judge someone's intelligence based on one skill alone.

I do understand your point, but this leads to a situation where a genius computer programmer (to use your example) will be refused a bank account because he cannot demonstrate to a clerk that he fully understands the contract to the clerks satisfaction. That seems wrong to me.