Why Reclaim Bank Charges

Dan_Bailey

Chrysalis wrote: »

Cleany what is so bad about simply blocking all payments where there is no funds and doing it automatically without a fee? what is the problem with it?

Because, as we have found out in the last few months, bank charges are an essential and viable way of supporting (by which I course mean to subsudise, not to profit from) the entire current accounts system, and so the banking industry is more than correct to penalise the poor individuals down to their last few pennies, and then to constantly bleed them dry. No unauthorised OD = no bank charges = no income.

natweststaffmember

Dan_Bailey wrote: »

Because, as we have found out in the last few months, bank charges are an essential and viable way of supporting (by which I course mean to subsudise, not to profit from) the entire current accounts system, and so the banking industry is more than correct to penalise the poor individuals down to their last few pennies, and then to constantly bleed them dry. No unauthorised OD = no bank charges = no income.

But it isn't really the case, Dan. Have you read the report based on 2006 figures?
In fact it is not the poor individuals that are really supporting in full the more fortunate ones but those that do have credit balances. In 2006 unauthorised charges came to £2.6 billion, Interest Forgone on credit balances was £4.1 billion pounds. There are other costs that are paid by the consumer like packaged accounts or accounts with "extras". OFT1105c for reference.
They can get revenue in other ways, ie increase overdraft interest, increase fees on packaged accounts, increase fees on copy statements, increase fees on safe custody and even start charging for replacement cards. There are other ways of generating revenue. Furthermore, the UK makes the most money out of a PCA(persoanl Current Account) than anywhere in Europe. Change is needed and change will come.

Cleany

davidgmmafan wrote: »

"i didnt. i was using the fact the something is being financially enforced, to suggest that it is financially enforcable. i never said anything about right and wrong in answer to your question."

What does financially enforced mean? I presume by that you mean legal?

they got the money!

davidgmmafan wrote: »

"What about the people who don't have access to £125?who?"

Students, unemployed people, even some pensioners wouldn't have access to £125 on 309 days notice which is how the spiral starts. But you've already agreed that some people should be helped, and frankly I WISH banks would take this approach in situations like this.

yes some. thing is right i bet the banks would love to take this approach but they cant because most people arent interested in being helped, they dont want to make the effort, thats why the problem exists in the first place.

davidgmmafan wrote: »

Bascially my main point is there are people in many different situations to our own. I've encountered them, and I understand voluntary work is not for everyone, but it was a real eye opener for me. I simply could not believe how screwed over some people get and no before you say they weren't idiots, lazy etc etc, some of them had vigorously gone through all the right channels but still drew a blank.

i can believe how screwed over people get, and i bet theyre not all idiots. the idiots are the ones that get screwed over because they are lazy, claim not to be, and ruin it for everyone else.

its professional begging.

davidgmmafan wrote: »

"they dont have to shaft you if something goes wrong, i thought it was the banks job to shaft you?"

The banks decided it was the banks job, which is kinda my point. The direct debit is between the company and the indidiidual, the bank is just the middleman. So I don't see where this punishment element comes from.

yeah i think this is a good point. i would personally be interested to know how it worked. but for the time being it makes sense to me that there must be some penalty for non-payment and it just happens to come from the banks for whatever reason.

davidgmmafan wrote: »

The current situation is totally inadequate, there is nothing to stop the charges increasing other than consumer choice (ha) and the vague threat of a referal to the competition commission.

perhaps some balance has been found that will stop the charges increasing any further. im sure that the threat of intervention is enough to make the banks think twice about persuing this particular line of penalty any further for the time being.

davidgmmafan wrote: »

Ok ok I promise I'm out this time, nice talking to you

and you mate

Dan_Bailey wrote: »

Because, as we have found out in the last few months, bank charges are an essential and viable way of supporting (by which I course mean to subsudise, not to profit from) the entire current accounts system, and so the banking industry is more than correct to penalise the poor individuals down to their last few pennies, and then to constantly bleed them dry. No unauthorised OD = no bank charges = no income.

oh yeah i forgot that. why on earth was i bothering to form an argument in the first place?

natweststaffmember wrote: »

But it isn't really the case, Dan. Have you read the report based on 2006 figures?
In fact it is not the poor individuals that are really supporting in full the more fortunate ones but those that do have credit balances. In 2006 unauthorised charges came to £2.6 billion, Interest Forgone on credit balances was £4.1 billion pounds. There are other costs that are paid by the consumer like packaged accounts or accounts with "extras". OFT1105c for reference.
They can get revenue in other ways, ie increase overdraft interest, increase fees on packaged accounts, increase fees on copy statements, increase fees on safe custody and even start charging for replacement cards. There are other ways of generating revenue. Furthermore, the UK makes the most money out of a PCA(persoanl Current Account) than anywhere in Europe. Change is needed and change will come.

ok im confused, either ive read that wrong or it says that those in credit make more money for the banks than those incurring charges. why are you arguing for decreased charges again?

Alpine_Star

Cleany wrote: »

ok im confused, either ive read that wrong or it says that those in credit make more money for the banks than those incurring charges.

Credit customers make substantially more money for banks (than through charges) by way of Net Interest Income and this just goes to highlight how little you know of the subject that your uninformed opinions are based on.

You're just serving into the net.

Cleany

Alpine_Star wrote: »

"ok im confused, either ive read that wrong or it says that those in credit make more money for the banks than those incurring charges."

Credit customers make substantially more money for banks (than through charges) by way of Net Interest Income and this just goes to highlight how little you know of the subject that your uninformed opinions are based on.

You're just serving into the net.

aha, thanks for that.

if you made as much effort reading this thread as you do trying (unsuccessfully) to belittle be, you would realise that i think it obvious that banks make more money from interest than bank charges.

however i have heard the argument that bank charges subsidise the other bank customers so many times that i was surprised to hear this statement coming from someone who backs the campaign.

i will remember this page of the post for referencing purposes - if anyone tells me that bank charges enable "free banking" then i shall send them to you, cautioning them about possible rudeness

natweststaffmember

Cleany wrote: »

aha, thanks for that.

if you made as much effort reading this thread as you do trying (unsuccessfully) to belittle be, you would realise that i think it obvious that banks make more money from interest than bank charges.

however i have heard the argument that bank charges subsidise the other bank customers so many times that i was surprised to hear this statement coming from someone who backs the campaign.

i will remember this page of the post for referencing purposes - if anyone tells me that bank charges enable "free banking" then i shall send them to you, cautioning them about possible rudeness

Hang on a second, no one in the campaign is suggesting otherwise except the fact that before the banks went to court, it was them who were saying that it was to cover bank administration costs. In fact, it was the banks themselves who were saying that bank charges enable free banking which many people swallowed, hook line and sinker. I didn't and never did.

Cleany

natweststaffmember wrote: »

Hang on a second,

... ... ok

natweststaffmember wrote: »

no one in the campaign is suggesting otherwise except the fact that before the banks went to court, it was them who were saying that it was to cover bank administration costs. In fact, it was the banks themselves who were saying that bank charges enable free banking which many people swallowed, hook line and sinker. I didn't and never did.

lol was it?

well thanks for the information. it makes me happy to know that the assumptions that i have made about the situation being influenced by the way that banking actually works (investing funds, interest etc.) seems to be accurate according to your information, rather than the assumptions other people have made, which seem to centre around casting the banks as evil overlords and consumers as innocent princesses.

anyway thanks again natweststaffmember :-)

and hopefully the new update of the bank charges advice is good news for those in hardship.

Dan_Bailey

Regarding my post above, it still appears as though bank charges make up a fairly large proportion of revenue raised from from current accounts. In 2006 I'm sure the banks were all still reporting huge amounts of profit, so's whos to say the money raised through bank charges was not really neccessary to support or subsudise the current account system, or to pay for any kind of directly attributable cost but simply converted straight to bottom line profit? Profit that seemingly was not retained within the industry sufficiently to cover the imminent banking crisis and lead to the huge government bail-outs? On what basis did the banks recently argue that bank charges are a fair and viable way of raising revenue?

natweststaffmember

Dan_Bailey wrote: »

Regarding my post above, it still appears as though bank charges make up a fairly large proportion of revenue raised from from current accounts. In 2006 I'm sure the banks were all still reporting huge amounts of profit, so's whos to say the money raised through bank charges was not really neccessary to support or subsudise the current account system, or to pay for any kind of directly attributable cost but simply converted straight to bottom line profit? Profit that seemingly was not retained within the industry sufficiently to cover the imminent banking crisis and lead to the huge government bail-outs? On what basis did the banks recently argue that bank charges are a fair and viable way of raising revenue?

In 2006 bank charges amounted to about 30% of the total amount of fees on personal current accounts. They made more from not paying interest on accounts in credit.
The banks argued and successfully that bank terms and conditions are part of the core terms and so they are not disproportionate, and the Supreme Court agreed.

ThunderBird_3

What's disproportionate? Never seen anything that says there not?