Why Reclaim Bank Charges

Cleany

euronorris wrote: »

I just used red to separate my comments from yours more clearly.

On your last point: Not everyone who has been charged, changes their outlook on their finances. It is not only those on low incomes who incur charges. I have seen plenty of examples of people on a higher income, who simply don't care and barely notice the charges because they can afford to 'swallow' the cost of them with little effect on them.

Then there are a proportion of people who get stuck in a cycle.

Then there are those lovely lil 'hanger's on' who subsidise their spending by using other people's money. Usually a bf or gf who is good at manipulating their partner. They don't actually even see the charge, let alone have to pay for it.

And then there are those who try, really, really try to get a grip on their finances but who struggle with it. They struggle to work with figures, they struggle to understand the financial products they sign up to etc etc.

I think that believing excessive charges will reform everyone's finances is naive to say the least.

I don't see how it can be right to say that bank charges don't act as a deterrant to anyone, at all. But I agree that they are not always a deterrant.

In fact I've been reading on the forum in the last half an hour how many "repeat offenders" there are. It's a sad situation, but there are simply some poeple who will, or can't, be responsble with their and other people's money.

Imagine if a bank set themselves up and said "We're setting our charges limit at £10". Then all of those people who were paying higher charges elsewhere went and joined that bank. Why hasn't that happened for real? Because it's not a valid business model, because people who can't manage their finances cost the bank money.

It's the same reason that having a low credit rating means you'll pay higher interest. You're paying for the bank taking a risk, and if you can't manage your finances, it's more of a risk.

If you wan't to have a frivolous attitude to your money then that's fine, but taking risks costs money. It's the banks money, they should be able to charge for the risks as they please.

How would people like it if the credit rating system was applied to banking, I'm sure that would be a lot worse. At least bank charges apply when the bank knows something has actually happened, when money has actually gone, rather then the fact that it might.

In a way the campaign is effectively trying to force an unnatural risk-management model on them, it's not surprising it's failed. Then what if it succeeded? Would there then be banks that refused or accepted a current account based on your credit rating, and those with a better credit rating could join the better banks which paid higher interest?

natweststaffmember

Cleany wrote: »

I wonder if it's the best thing for everyone that the claim to make bank charges "unfair" has failed.

I think Martin Lewis is great, and so is this website. I have put loads of my friends onto it and they get the email, use vouchers, look up stuff and the rest. I say this just so that people don't think I am having a go for the sake of it.

I like the fact that people are charged money for having an unauthorised overdraft. I know that sometimes circumstances can end up with it being unfair, but in general if people don't act responsibly with somebody elses money then don't they deserve to be charged?
They aren't though, the bank is authorising an increased overdraft without declining the payments. The bank could just decline payments, end of. For example, the USA(I KEEP using this example) have recently announced that unless customers OPT IN to overdraft services than all payments would be declined without charges being applied.
There is the argument that bank charges "subsidise" banking costs for people, but on the other hand those people with money in the bank are making a profit for the banking system too (as well as a bit for themselves).
The is why the cross subsidy argument may not necessarily be all it is being given to be.
I know someone who has been through all of this process to recaim bank charges a couple of years ago. Whatever fair and unfair situations went on, I know that this person is irresponsible with money. I don't know if he was successful, but he was happy that he could "get some more money".
I have read many posters who have nearly killed themselves because of the stress the banks charges have contributed to. Furthermore, personal examples are not necessarily the norm. For example, there are some who claimed financial hardship yet from their posts there did not appear to be FH.
In the long run, and in general (there are of course many unfair situations), shouldn't irresponsibility with other people's money be punished, rather than ignored, especially in the light of recent economic history?

I think personally, the consumers should be able to OPT IN or OPT OUT of overdraft services in the manner the US banking system is doing. That means when people do come on here and state that the bank refused my payment when I was in a major store, we ask the question; Have you opted in to overdraft services or not.
I am sure you would agree that this would be better than what you call "irresponsible" behaviour.

chipbeck

Cleany wrote: »

I don't see how it can be right to say that bank charges don't act as a deterrant to anyone, at all. But I agree that they are not always a deterrant.

In fact I've been reading on the forum in the last half an hour how many "repeat offenders" there are. It's a sad situation, but there are simply some poeple who will, or can't, be responsble with their and other people's money.

Imagine if a bank set themselves up and said "We're setting our charges limit at £10". Then all of those people who were paying higher charges elsewhere went and joined that bank. Why hasn't that happened for real? Because it's not a valid business model, because people who can't manage their finances cost the bank money.

It's the same reason that having a low credit rating means you'll pay higher interest. You're paying for the bank taking a risk, and if you can't manage your finances, it's more of a risk.

If you wan't to have a frivolous attitude to your money then that's fine, but taking risks costs money. It's the banks money, they should be able to charge for the risks as they please.

How would people like it if the credit rating system was applied to banking, I'm sure that would be a lot worse. At least bank charges apply when the bank knows something has actually happened, when money has actually gone, rather then the fact that it might.

In a way the campaign is effectively trying to force an unnatural risk-management model on them, it's not surprising it's failed. Then what if it succeeded? Would there then be banks that refused or accepted a current account based on your credit rating, and those with a better credit rating could join the better banks which paid higher interest?

Still not got the message Cleany. If your first offence, like mine, is earth shattering you then have no option other than to be a repeat offender.

Money hasn't gone anywhere in my case, they simply charged me over a grand to say they hadn't sent anyone money.

euronorris

Cleany wrote: »

I don't see how it can be right to say that bank charges don't act as a deterrant to anyone, at all. But I agree that they are not always a deterrant.

I never meant to come accross as saying it won't deter anyone. My point is, it doesn't deter enough people.

In fact I've been reading on the forum in the last half an hour how many "repeat offenders" there are. It's a sad situation, but there are simply some poeple who will, or can't, be responsble with their and other people's money.

Imagine if a bank set themselves up and said "We're setting our charges limit at £10". Then all of those people who were paying higher charges elsewhere went and joined that bank. Why hasn't that happened for real? Because it's not a valid business model, because people who can't manage their finances cost the bank money.

Actually, they make a lot of money off people who don't manage their finances well. That's where the charges and interest comes in. Although, I must state here that I agree that interest should increase according to your risk - but at the same time, I think the criteria for this should be more clear.

At the moment, you could be pay on time, every time, have a good steady income etc and seemingly doing all the right things and still be declined credit. With no idea why. Doesn't seem quite right to me.

And, there are no charges here - just interest - for such 'services' provided by the bank. And yet, the average household debt is far lower and the banks still turn a profit.

The charges aren't their only revenue source.

It's the same reason that having a low credit rating means you'll pay higher interest. You're paying for the bank taking a risk, and if you can't manage your finances, it's more of a risk.

Agreed.

If you wan't to have a frivolous attitude to your money then that's fine, but taking risks costs money. It's the banks money, they should be able to charge for the risks as they please.

Disagree, particularly as the criteria for a 'high risk' person is not always clear. OK, in a lot of examples, you can clearly see the risk. But not always.

How would people like it if the credit rating system was applied to banking, I'm sure that would be a lot worse. At least bank charges apply when the bank knows something has actually happened, when money has actually gone, rather then the fact that it might.

Er, I was under the impression that it was. Hence overdraft's only being offered to some customers and not others.

In a way the campaign is effectively trying to force an unnatural risk-management model on them, it's not surprising it's failed. Then what if it succeeded? Would there then be banks that refused or accepted a current account based on your credit rating, and those with a better credit rating could join the better banks which paid higher interest?

I don't believe that anyone is trying to force an unnatural risk-management model on them. No one's saying charges shouldn't be incurred, but they should be reasonable and fair. 5 GBP would be more than enough to cover the costs involved in returning a DD unpaid.

As for your last point. Again, I was under the impression that this system was already in place.

Cleany

natweststaffmember wrote: »

I have read many posters who have nearly killed themselves because of the stress the banks charges have contributed to. Furthermore, personal examples are not necessarily the norm. For example, there are some who claimed financial hardship yet from their posts there did not appear to be FH.

That's sort of why I'm questioning the campaign against all charges.

natweststaffmember wrote: »

I think personally, the consumers should be able to OPT IN or OPT OUT of overdraft services in the manner the US banking system is doing. That means when people do come on here and state that the bank refused my payment when I was in a major store, we ask the question; Have you opted in to overdraft services or not.
I am sure you would agree that this would be better than what you call "irresponsible" behaviour.

Yes that sounds very sensible. Perhaps it would work. But at the end of the day smoeone's not going to be getting their money and it's going to have to come from somewhere.

Cleany

chipbeck wrote: »

Still not got the message Cleany. If your first offence, like mine, is earth shattering you then have no option other than to be a repeat offender.

Money hasn't gone anywhere in my case, they simply charged me over a grand to say they hadn't sent anyone money.

I don't quite understand, once this was over did it happen again?

natweststaffmember

Cleany wrote: »

That's sort of why I'm questioning the campaign against all charges.
Well here is a scenario, it is near to the charging period and you happen to be hiking and you forget that the annual AA subscription is going out. It could cause one charge of £38.00(old natwest system) plus two £28 maintenance charges which means that the DD for say £29 has cost you £94 and the DD is not paid. by the time you have the chance to remedy it the bank may only agree to one charge refund.

Yes that sounds very sensible. Perhaps it would work. But at the end of the day smoeone's not going to be getting their money and it's going to have to come from somewhere.

If the payment is declined then either the shop says its declined, the person who the cheque is written to writes to the person, or the DD provider writes to the person to say that it was not paid.
To a degree, it means we would not be saying reclaim the charges or read the terms and conditions but more likely, means of budgetting, overdraft services which come at an additional cost to guarantee payments rather than necessarily saying the contract is unfair or the charges should be reclaimed. I am sure we all want a system that is fair to the banks' and fair to the customers of those banks.

chipbeck

Cleany wrote: »

I don't quite understand, once this was over did it happen again?

Not a problem.
Once you lose the biggest proportion of your wage it's very difficult to get back on track and you get stung again.

Lloyds are really good and send you to collections when you are over your limit. They don't then charge you, well only the interest, and just take a given amount to clear your excess OD.

When you are back within your OD limit (usually takes a few months) they then move you from collections back to branch.

Then, for example you get an unexpected DD going out, I had one that I assumed would be around £60, they took £160 thus putting me over my limit again. Lloyds then add the charges then send you back to collections.

In short it's like saving a few hundred quid over a few months then giving this money to the bank in order that you can be looked after by collections.

Cleany

euronorris wrote: »

I don't see how it can be right to say that bank charges don't act as a deterrant to anyone, at all. But I agree that they are not always a deterrant.

I never meant to come accross as saying it won't deter anyone. My point is, it doesn't deter enough people.

Then we need more!

euronorris wrote: »

Actually, they make a lot of money off people who don't manage their finances well. That's where the charges and interest comes in. Although, I must state here that I agree that interest should increase according to your risk - but at the same time, I think the criteria for this should be more clear.

At the moment, you could be pay on time, every time, have a good steady income etc and seemingly doing all the right things and still be declined credit. With no idea why. Doesn't seem quite right to me.

And, there are no charges here - just interest - for such 'services' provided by the bank. And yet, the average household debt is far lower and the banks still turn a profit.

The charges aren't their only revenue source.

I have paid interest charges on my overdraft, and I think they're very reasonable. But there's a difference between having an agreed overdraft, demonstrating financial management, and going past the limit, demonstrating bad management and high risk.

euronorris wrote: »

If you wan't to have a frivolous attitude to your money then that's fine, but taking risks costs money. It's the banks money, they should be able to charge for the risks as they please.

Disagree, particularly as the criteria for a 'high risk' person is not always clear. OK, in a lot of examples, you can clearly see the risk. But not always.


How would people like it if the credit rating system was applied to banking, I'm sure that would be a lot worse. At least bank charges apply when the bank knows something has actually happened, when money has actually gone, rather then the fact that it might.

Er, I was under the impression that it was. Hence overdraft's only being offered to some customers and not others.

My point is that bank charges for actual transgressions are a much fairer, and better way of dealing with risk than other models, like the credit rating system. Bank charges act immediately on the risk itself, making the criteria for high-risk very clear indeed.

euronorris wrote: »

I don't believe that anyone is trying to force an unnatural risk-management model on them. No one's saying charges shouldn't be incurred, but they should be reasonable and fair. 5 GBP would be more than enough to cover the costs involved in returning a DD unpaid.

Business are, and should be, free to set charges for fees, services, and good as they see fit, and never have to cover costs. If they want to include in this, risk, deterrant, and other things then they should be free to, as any other business would.

euronorris wrote: »

Then what if it succeeded? Would there then be banks that refused or accepted a current account based on your credit rating, and those with a better credit rating could join the better banks which paid higher interest?

As for your last point. Again, I was under the impression that this system was already in place.

Yeah sort of, but I was trying to say that what if it completely replaced the current high bank charges system, and that compared to the credit rating system, high bank charges are actually a good thing, in general (although in some situations poeple have been unfairly treated).

euronorris

Cleany wrote: »

Yes that sounds very sensible. Perhaps it would work. But at the end of the day smoeone's not going to be getting their money and it's going to have to come from somewhere.

This is part of the problem. People are also charged for DD's that are rejected and unpaid.

If the bank stopped charging for rejecting DD's then it would be up to that individual to contact whoever requested the money and agree a payment plan with them. Imagine it's for AA membership as NSM stated earlier, then that person has the embarassment of calling the AA up, explaining and arranging for payment on another date, or have the membership cancelled as a result.

That, for me, is far more embarassing and acts as a deterrant. But, it also wouldn't trap people in a spiral of debt.