Why Reclaim Bank Charges

the_insider

Cleany wrote: »

Sorry but I'm not a troll.

I'm genuinly wondering if there's another side to this argument, or if there's anyone who, like me, love this website, but don't agree that bank charges are, in general, unfair.

I have been reading the articles on the website about it. Yes there are many instances where people have been charged unfairly, but there are also many millions of people who are irresponsible with money, and been charged because of that.

What the eradication of "unfair" bank charges would ultimately mean is that it would be easier to be irresponsible with other people's money. What are the implications of saying that it's effectively easier to go into debt, that it will cost you less? Isn't that the problem with the economy at the moment?

I am with you 100% on this one. There is a massive amount of criticism on the banks at the moment, especially the ones that have received tax payers money, but people need to remember that one of the reasons that they started to lose money was paying out all the credit card charges claims in 2006/2007. None of the banks have been stable since then. Also the number of customers who have fallen into hardship due to the economic slump (not solely the fault of the bank, I find myself screaming every time I read this site) means that they have lost more money. The banks want to help customers but people shouldn't be using financial hardship claims as savings accounts!!

natweststaffmember

the_insider wrote: »

I am with you 100% on this one. There is a massive amount of criticism on the banks at the moment, especially the ones that have received tax payers money, but people need to remember that one of the reasons that they started to lose money was paying out all the credit card charges claims in 2006/2007.
You do know, you are gonna have to give a source for that information. In 2007 banks made multi billion pound profits and the OFT report came out in April 2006 and charges were reduced by later July 2006. There is no evidence to suggest the repayment of UK only related issues was the main reason for there to be monetary woes. Sub prime mortgage lending is where the blame is kinda put on and that was in the US.
None of the banks have been stable since then. Also the number of customers who have fallen into hardship due to the economic slump (not solely the fault of the bank, I find myself screaming every time I read this site) means that they have lost more money
Not all areas of the bank have lost money and retail banking AFAIK has never made a loss pre SC test case nor during or after. The investment arms is where their big losses occurred.
. The banks want to help customers but people shouldn't be using financial hardship claims as savings accounts!!

I do agree with your last comments and would add that Financial Hardship is what it says on the tin, to alleviate financial hardship but there is also an onus on the individual to make contact with their lender(for motgages), their landlord(for rent), etc,. etc , when they are in financial difficulties.

the_insider

I didn't say it was the main factor, but no-one can deny that the loss of revenue from the reduction in charges and the loss of profits brought about by the refunds of charges that is still going on has had an impact on the way the banks do their business and calculate risk.

natweststaffmember

the_insider wrote: »

I didn't say it was the main factor, but no-one can deny that the loss of revenue from the reduction in charges and the loss of profits brought about by the refunds of charges that is still going on has had an impact on the way the banks do their business and calculate risk.

The calculation of risk would be tighter now because of the economic conditions rather than a minor issue of reclaiming credit card charges since interest rates on cards have gone up, fees from balance transfers were introduced and raised so, I still don't think it is that big a deal. I think banks' have tightened their risk assessment because of rising defaulting customers due to economic conditions rather than the reclaiming of charges in any form.

oldwiring

natweststaffmember wrote: »

I think banks' have tightened their risk assessment because of rising defaulting customers due to economic conditions rather than the reclaiming of charges in any form.

I think you are right, but also "last straw broke the camel's back comes to mind.

natweststaffmember

oldwiring wrote: »

I think you are right, but also "last straw broke the camel's back comes to mind.

Their lending criteria was pretty shoddy to be honest(in fact Northern Rock was said not to actually seek proof of income for mortgages and some people wonder why they got into trouble ).

Cleany

natweststaffmember wrote: »

Unfortunately there is evidence that it is true.
http://www.oft.gov.uk/shared_oft/rep...pdfFurthermore, the banks' argued that point in the House of Lords appeal.

I think the cross subsidy issue is irrelevant to the debate not because of the charges issue but because the contract itself and any charges incurred is related to the whole contract signed between YOU and the BANK.
We keep coming back to this issue of "it's your fault for charges" rather than the real issue which is (a) What is the cause of the charges? Answer: less income to cover outgoings.
(b) Why are you overspending?
Answer: is it overspending or is it an unexpected event occurring ie partner separates, partner involved in accident meaning they cannot work for a number of months putting a strain on the finances, children being born which again puts a burden of the finances.

I would throw this into the mix. If there is overspending then how is it occurring since no overspend on a card can be given without the consent of the bank.

To clarify this, if you pay for goods and services then you should have the option to opt out of that service which is not something that you get with bank fees. What I mean is that a service is given without real consent. With regards to cross subsidy, I personally do not think that is really a great argument for anyone to claim bank charges back with.

People who come on the boards are usually at the point in which they are being clobbered so let's try and teach them how the charges work, when they go out, what they can do to cut back if any and therefore be able to stop the continuing cycle happen. That is about financial education.

i totally agree that the cross-subsidy issue is irrelevant.

i accept that it's probably quite confusing for many people who have little instinct when it comes to finances and they are "allowed" to spend more and more money, little caring where it comes from, and the the banks policies purposely exploit this.

however given that this is a bad situation, i dont see how the solution of intefering with the banks quite legal profiteering will actually help in the long run.

quite frankly it doesnt matter what happens, the vast majority of people will grab whatever cash they can out of this campaign and go and spend it, ruining it for the minority who may actually learn something or be geniunely helped by it. in fact this has already happened.

as you said, it's about financial education (and actually education in general), and i quite honestly dont see how making the banks roll over and make it easier for people to not pay attention to their finances is ever going to help.

ive heard the argument that "other industries wouldnt get away with it" quite a few times here, and i accept that in some cases thats true. but isnt the real lesson that people should wake up and realise that if you dont pay attention people are going to make money from you, be that the banks, or simply simply being ripped off by a shopkeeper. (harry enfield - "i saw you coming")

all that would happen from the (unlikely) success of this campaign is that people would think that it's ok to run out of money because its acutally the banks fault because they were providing a service they didnt ask for (yet somehow used ) or something.

its got blame culture written all over it. isnt it time that people realised that they should take the time to take care of their business properly? isnt that the problem? in that way how are the banks different to anyone or anything else? and how would the success of the campaign help?

:-)

there's a lot of other posts here since the weekend, about the banks being some sort of "cartel".

money is what its about. people are only interested in it because its cost them, and that's it. the banks on one side, and annoyed customers on the other. they all want a piece of the pie. what about the price of milk? does anyone know what that means? why its an issue? is "oh its cheap so thats good" the answer? i doubt it.

most people want more money, in fact i would like more. but having money takes effort, as does not having it. it takes effort to manage your finances. saying "oh im crap with money" is just lazy and means that you have had no need to pay proper attention to it. the banks are simply putting the effort in and making money out of lazy people who, for the most part, "should have made sure there was more money in their account". in the vast majority of cases isnt that whats going on?

natweststaffmember

Cleany wrote: »

i totally agree that the cross-subsidy issue is irrelevant.

i accept that it's probably quite confusing for many people who have little instinct when it comes to finances and they are "allowed" to spend more and more money, little caring where it comes from, and the the banks policies purposely exploit this.

however given that this is a bad situation, i dont see how the solution of intefering with the banks quite legal profiteering will actually help in the long run.

quite frankly it doesnt matter what happens, the vast majority of people will grab whatever cash they can out of this campaign and go and spend it, ruining it for the minority who may actually learn something or be geniunely helped by it. in fact this has already happened.
Most people have used any money that they received, not on the latest widescreen television or holiday overseas but on other bills that needed paying or on repaying the bank for any debt that was oustanding.
as you said, it's about financial education (and actually education in general), and i quite honestly dont see how making the banks roll over and make it easier for people to not pay attention to their finances is ever going to help.
I do kinda agree with what you are saying with regards to how will a refund simply prevent charges in the future. If the charges themselves were fair then perhaps we would all be on the budgetting and current account forum advising how to deal with creditors.
ive heard the argument that "other industries wouldnt get away with it" quite a few times here, and i accept that in some cases thats true. but isnt the real lesson that people should wake up and realise that if you dont pay attention people are going to make money from you, be that the banks, or simply simply being ripped off by a shopkeeper. (harry enfield - "i saw you coming")
The shopkeeper though can say it will cost you £200 before you pay rather than saying it will be £200 because I considered how much it was. There is a slight difference.
all that would happen from the (unlikely) success of this campaign is that people would think that it's ok to run out of money because its acutally the banks fault because they were providing a service they didnt ask for (yet somehow used ) or something.
The success of the bank charges campaign is the fair treatment of its customers and the fair charging system where it is required. If someone runs out of money then simply refuse all transactions no matter how embarrassing it is to the customer. Yes they would be enraged in a supermarket but they would understand why it happened.

its got blame culture written all over it. isnt it time that people realised that they should take the time to take care of their business properly? isnt that the problem? in that way how are the banks different to anyone or anything else? and how would the success of the campaign help?
I am not sure you can blame banks or customers but it's a bit of both. Credit became easy and people were thrown into it without the pitfalls being clear to them. By the time they got there they were in deep trouble. Some people were lead to believe that overdrawing on their account was impossible and some people knew that they were close and still spent in unnecessary things. The success of the campaign would correct something that was unfair ie collective redress but at the same time leave in its place a fair system of banking and perhaps TRUST in the bank which has gone in the large part. Furthermore, we can look at the way someone deals with their account and the way that the charges spiral so that we can get people, if charged, to avoid the spiral into debt.
:-)

there's a lot of other posts here since the weekend, about the banks being some sort of "cartel".

money is what its about. people are only interested in it because its cost them, and that's it. the banks on one side, and annoyed customers on the other. they all want a piece of the pie. what about the price of milk? does anyone know what that means? why its an issue? is "oh its cheap so thats good" the answer? i doubt it.
Don't understand this beat, sorry
most people want more money, in fact i would like more. but having money takes effort, as does not having it. it takes effort to manage your finances. saying "oh im crap with money" is just lazy and means that you have had no need to pay proper attention to it. the banks are simply putting the effort in and making money out of lazy people who, for the most part, "should have made sure there was more money in their account". in the vast majority of cases isnt that whats going on?

I am crap with money is a natural human reaction ie within the sentence is blame to oneself. Some people genuinely do not understand how they were charged, why they were charged or when the charges were going out, so they spent money and then were charged perhaps a month later. The bottom line is shoulda, coulda, and didn't because of a lack of real understanding of why it happened and how the charges were to be taken.

Smasher

There is also the added problem of retailers not banking cheques or processing debit card payments for a while. For example, I look at my balance and it says I got £100, so I buy my shopping. Then the petrol I paid with my debit card last week gets taken from my account the following day and the account goes overdrawn.

Someone is surely now going to tell me that a budgeting spreadsheet will fix that, but seriously, very few people are going to be able to even remember to input everything they ever pay for and check the status on their spreadsheet before they make any kind of purchase.
Banks would know that even if everyone were to do this, there is still a huge probablility that a heck of a lot of people would slip up from time to time. We sometimes make mistakes, it is a fundamental design flaw of humans. Even the most financially astute make them, I needn't expand on that..

In the old days, if the money is in your pocket, you can have it. If not, then you can't.

Chrysalis

Premier wrote: »

My banks always advise me of when any changes are made to the terms and conditions. If you are not getting these, speak with your bank, the royal mail and/or the police.

There is always an option should you no longer wish to accept the revised terms and consitions which are usually provided in advance of them becoming effective.

By continuing to use the services, you are deemed to have accepted the terms and conditions.

Not updated ones on the website, my agreement states they have to send me revised conditions in the post, a hard copy. Incidently I got a revised t&c today, nice timing