Current Account Charges - Why I have no sympathy

M_Thomson

Tim_L wrote:

That said, I do have a problem with one group of people making silly generalisations about another, and there is certainly a moral question about whether it is just to steal from the poor to improve your own lot in life. I'm afraid that if you argue with me on the first point I'm duty bound to point this out.

Sorry, but there is a contradiction in what you are saying. You are generalising that the only people who get charges are the poor. If you watched the tv shows that have been on recently regarding reclaiming bank charges you will see that most of the people featured were middle class people. It is offensive to poor people to say that they will always be the ones getting charged.

CopperPlate_2

Tim_L wrote:

That said, I do have a problem with one group of people making silly generalisations about another, and there is certainly a moral question about whether it is just to steal from the poor to improve your own lot in life. I'm afraid that if you argue with me on the first point I'm duty bound to point this out.

Oh come on!! Who appointed you Guardian of the Financially Sick, Weary and Infirm! "Steal from the poor to improve your own lot in life" and "duty bound to point this out" - get a grip; I've not heard such sanctimonious rubbish for a long time.

Fran

I got an Alliance & Leicester deposit account a while ago specifically so that I had an account that couldn't go overdrawn and yet had the facility of direct debits/standing orders. At some point they changed it to a current account which I only became aware of when I had gone overdrawn. It's easy to say that I should have read the terms & conditions, but lets face it, a mother with small babies/children in her 24 hour/day job is not going to make sitting down reading the bank t & c's a priority once the children have gone to bed.

So while I was trying to be responsible with my money with that particular account, the bank enforced a change on me / sneakily altered my account in a way that was not obvious and that I did not want at all.

It is easy to be derisory about people who don't manage their affairs as you do if you are financially savvy, but there are many people who really struggle with figures and forms and understanding implications. There are people whose lives are screwed up by various misfortunes and who can't think straight about their finances either temporarily or permanently. To have an unfair charge put on your account which then makes the situation even worse if you are having cash flow problems, when using an account which is necessary for day to day living is just not right. We are forced to use banks to pay for things, often you can't pay cash, to receive payments from work, tax credits, benefits you have to have an account, there is no avoiding it unless you get paid cash and keep your money under the mattress.

Would it be true that more women (as the majority child carers) with children get these charges? More people with illness or mental health problems? More people on low incomes?

Tim_L

No I am certainly not generalising that it is only the hard up that are charged. What I am saying is that these charges disproportionately affect those in that situation and make their situation worse. It clearly doesn't follow that if you are poor you will be charged and if you have money you won't be, but the balance of probability is that you are more likely to hit a charge if you are bouncing along the overdraft limit because of difficulty in making ends meet. And overwhelmingly the stories here are of people such as students or others who have had problems following illness or redundancy getting absolutely hammered.

You can't really draw any conclusions from the way this is presented on TV or in the press. TV companies have their own agenda and select people from an already self selected group usually to create some sort of emotional response or stir up a controversy. If that is how you get your information you'll be wrong about all sorts of things.

If anything is offensive here it is not that I am pointing out that these are charges that hit the worse off hardest, but that there are still people who feel it is better to charge someone in difficulties £1500 a year so that he or she can enjoy a few more pennies in interest or free banking. And in any case this assertion is palpable nonsense since the best interest rates are available from companies that don't levy charges, and because clearly banks would apply current account charges if they felt they could whether or not penalty charges exist as another income stream.

I'm really not going to pay much attention to people who explain that it is morally wrong that "these people" don't "take responsibility" because he or her might have to end up not having his current account banking subsidised, and then whinges because someone points out that there is a perfectly good counter argument that it is wrong to take from those in marginal difficulties to subsidise those who aren't. I am no more the defender of the virtuous needy than s/he is the defender of the smug, penny pinching and misanthropic, but if you engage with me in an debate about this, I'm afraid you are going to hear the other side of the argument loudly and clearly.

But once again: why are you getting into such a lather? This is really nothing to do with you - it is a dispute between two parties to a contract - and moaning here won't stop the repayments being made because fundamentally they are apparently accepted by the banks as being unlawful. So really you'd do better just to accept it and move on.

Wyndham

Fran wrote:

It is easy to be derisory about people who don't manage their affairs as you do if you are financially savvy, but there are many people who really struggle with figures and forms and understanding implications. There are people whose lives are screwed up by various misfortunes and who can't think straight about their finances either temporarily or permanently.

But part of taking out an account is that you need to be aware that there are terms and conditions, but also that YOU have a responsibility to manage YOUR money - not anyone else. I see it as being the same as driving when you are tired / hungry / not really being bothered - if you cause an accident it is your fault and no one would deny that. As a driver you have a duty of care, and it's actually the same with money - it is your responsibility to manage it.

And, I want to reinforce the point that has been made several times about charges - it is the LEVEL of the charges that has been deemed to be wrong, not charging in the first place.

I've been unemployed, and didn't go overdrawn. I left University without any debt because I knew what I had, and didn't have, and budgeted accordingly - OK it was several years ago so was easier, but I did it. I've never paid bank charges, because I know what is due and I really don't think it is hard to do that, with lots of software about that can help. Before I had the software, I had a book and wrote everything down. Basic, but it worked!

CopperPlate_2

Tim_L wrote:

If anything is offensive here it is not that I am pointing out that these are charges that hit the worse off hardest, but that there are still people who feel it is better to charge someone in difficulties £1500 a year so that he or she can enjoy a few more pennies in interest or free banking.

He is not interested in pence interest a year. Stop being so moralistic and evangelical about this. I think it is wrong to drive people into debt - however, I think that charges are a necessary part of running an account and any charge should be fair and reasonable. End of story, so please stop misinterpreting what I am saying just to make you sound to good to be true.

Tim_L wrote:

I'm really not going to pay much attention to people who explain that it is morally wrong that "these people" don't "take responsibility" because he or her might have to end up not having his current account banking subsidised, and then whinges because someone points out that there is a perfectly good counter argument that it is wrong to take from those in marginal difficulties to subsidise those who aren't. I am no more the defender of the virtuous needy than s/he is the defender of the smug, penny pinching and misanthropic, but if you engage with me in an debate about this, I'm afraid you are going to hear the other side of the argument loudly and clearly.

Never said it was morally wrong that "these people" as you call them - can't think that I've ever referred to anyone in this way and made such a blatant and patronising distinction - "don't take responsibility". I think what I've said is that the majority of customers are now having to take the pain in increased OD rates/credit card rates simply because the banks have lost a revenue stream - brought about by the challenges to the charges. All I am hearing is puffed up moralistic self-importance, not a debate or argument to speak of. All I hear is "I am virtuous and ethically aware and as you don't agree with me, you must be money-grabbing and selfish". Incorrect.

Tim_L wrote:

But once again: why are you getting into such a lather? This is really nothing to do with you - it is a dispute between two parties to a contract - and moaning here won't stop the repayments being made because fundamentally they are apparently accepted by the banks as being unlawful. So really you'd do better just to accept it and move on.

Not moaning about it per se, just disappointed that the actions of a minority of people who have been charged and are claiming back tranches of money that they have paid - regardless of whether these charges were applied in accordance with the bank T&C's - has prompted the banks to apply a blanket change to everyones terms of banking whether that is in their interests or not.

For the last time - the charges are NOT unlawful - the level of the charges was held to be unlawful I have accepted that things will change - and you are quite wrong in that it is a dispute between two parties: the changes affect everyone in a banking relationship.

That's my last word on this, as it appears that if you don't agree with certain views, you are fundamentally wrong in your outlook.

YorkshireBoy

Fran wrote:

I got an Alliance & Leicester deposit account a while ago specifically so that I had an account that couldn't go overdrawn and yet had the facility of direct debits/standing orders.

I'm no banking expert, but I didn't know that such accounts existed. By their very nature, if they allow DD's and SO's, they can allow you to go overdrawn - either by making a default charge due to letting a DD go through when you have insufficient funds, or stopping a DD for the same reason.

At some point they changed it to a current account which I only became aware of when I had gone overdrawn. It's easy to say that I should have read the terms & conditions, but lets face it, a mother with small babies/children in her 24 hour/day job is not going to make sitting down reading the bank t & c's a priority once the children have gone to bed.

I can't think of a better way to answer this statement than Wyndham's 'driving whilst tired' analogy. You simply have to find time to read your post!

We are forced to use banks to pay for things, often you can't pay cash, to receive payments from work, tax credits, benefits you have to have an account, there is no avoiding it unless you get paid cash and keep your money under the mattress.

This statement is thrown out constantly - usually by the consumeractiongroup central characters. I've said it before and I'll say it again...

IT'S INCORRECT.

You are not forced to have a bank account. You can have your wages/tax credits/benefits paid into a building society account or bank savings account. As long as it has an 8 digit account number and a 6 digit sort code, it matters not a jot whether it's a current account or not.

Please tell me which, of life's essentials, you need a bank account to pay for?



As a general point, and not relevant to your post Fran, the people who previously incurred charges through simple mis-management (rather than through genuinely unfortunate circumstances) of their accounts will continue to incur charges after the OFT ruling. Put simply, they won't now incur £1,000 a year - they may incur only £500 a year. The fact remains though, that they (the less well off) will be blown out of the water - whether it's £500 or £1,000. (Think about it a 'Monopoly' sense, you can be bankrupted just as easily by landing on Old Kent Road with 2 houses as you can by landing on Mayfair with a hotel).

It's for this reason that I get very annoyed with the constant advice (from the main protagonists) to deal with the symptom's, ie "claim 'em back, they're unlawful" - rather than also attempting to offer some more sound advice that would address the root cause ie, PREVENTION.

lilac_lady

I don't pay bank charges because I don't overdraw. I don't have a high wage and sometimes I think it's the people who do who don't take care of their banking and let themselves go into the red. I'm aware that you can suddenly hit a "life situation" that drastically reduces your income - it happened to me so I know all about trying to manage money. Having said that, the amount the banks charge for overdrawing is shocking and it's time it was challenged.

Fran

Wyndham wrote:

I see it as being the same as driving when you are tired / hungry / not really being bothered - if you cause an accident it is your fault .....

That is a ridiculous analogy because a bank account is not a life & death or accident situation. However since you used it, what if the traffic signs (t & c's) were useless and were a major cause of accidents? Surely there's a responsibility with road planners (bank staff) to make them large and clear. When you see a speed camera it is a clear message: - if you speed here you are likely to get a fine. However the charges are hidden amongst t & c's which are always in VERY SMALL WRITING and bundled with many other bits of info. If you got done by a speed camera and they made a massive profit from this you would surely think it unfair?

I've been unemployed, and didn't go overdrawn. I left University without any debt because I knew what I had, and didn't have, and budgeted accordingly - OK it was several years ago so was easier, but I did it.

Were you long term unemployed though, or you did you have financial or help in kind from other sources? You probably left university without debt because you had a GRANT! Did you have help from your parents at all?

I've never paid bank charges, because I know what is due and I really don't think it is hard to do that, with lots of software about that can help. Before I had the software, I had a book and wrote everything down. Basic, but it worked!

I would say you know what is due etc. because you are good with figures, you are from a prvileged background and possibly had financial help at the point where you might have slipped overdrawn. MANY people STRUGGLE with figures and what might seem simple to you just is not to them.

YorkshireBoy wrote:

I'm no banking expert, but I didn't know that such accounts existed. By their very nature, if they allow DD's and SO's, they can allow you to go overdrawn - either by making a default charge due to letting a DD go through when you have insufficient funds, or stopping a DD for the same reason.

The account does not exist any more which is why my account was changed. If the money wasn't there for a Direct Debit yes they would charge, but I specifically got that account not to use the DD's but because I didn't want to get any charges or be in a position that I could be overdrawn.

You are not forced to have a bank account. You can have your wages/tax credits/benefits paid into a building society account or bank savings account. As long as it has an 8 digit account number and a 6 digit sort code, it matters not a jot whether it's a current account or not.

Please tell me which, of life's essentials, you need a bank account to pay for?

The accounts you are talking about are basic accounts; as I understand it you would always have to make cash payments for everything. You are at a disadvantaage with things like insurance because they want a card no. and often won't even take cheques now. You could never take advantage of anything that doesn't involve cash. Of course we're not talking about essentials (food), but in general you are at a disadvantage with those kind of accounts.

MPH80

Fran wrote:

That is a ridiculous analogy because a bank account is not a life & death or accident situation. However since you used it, what if the traffic signs (t & c's) were useless and were a major cause of accidents? Surely there's a responsibility with road planners (bank staff) to make them large and clear. When you see a speed camera it is a clear message: - if you speed here you are likely to get a fine. However the charges are hidden amongst t & c's which are always in VERY SMALL WRITING and bundled with many other bits of info. If you got done by a speed camera and they made a massive profit from this you would surely think it unfair?

It's fair to say that banking isn't a life and death situation - it's also unfair to say that T&Cs are useless. Since early 2004 - we have had the exceptionally clear summary boxes showing you exactly what you'll be charged. To claim it's 'hidden' is rubbish. A few years ago - that argument would have stood up to scrutiny - now you can't argue they hide the charges.

The accounts you are talking about are basic accounts; as I understand it you would always have to make cash payments for everything. You are at a disadvantaage with things like insurance because they want a card no. and often won't even take cheques now. You could never take advantage of anything that doesn't involve cash. Of course we're not talking about essentials (food), but in general you are at a disadvantage with those kind of accounts.

But the key word is DISADVANTAGE. It does not stop you from getting those items.

M.