Current Account Charges - Why I have no sympathy

GSD4ME

I really don't want this to sound like a sob story !!! but I would like to point out that it is not just people on benefits and those who are "too stupid" to manage their finances who get charged these illegal charges.

Just to quote from my own experience.

My Council Tax has more than doubled over the past 5 years, my electricity DD has gone up from £18 last May to £43.50 now (and yes I have moved supplier already and am constantly looking for a cheaper provider), it costs me £10 more now to fill up my car (which I need to get to work as there is no public transport) than it did a year ago. In the same time my pay has risen 2 per cent. I have taken on all sorts of extra work and businesses to try and earn extra money, but I pay far more in tax and bills than I did a few years ago while my income has not risen by anything like that much.

So when it takes the bank 5 days to clear a cheque when a DD is due and that takes me over my overdraft limit and they slap on a huge fee that cripples my careful financial planning.

My husband's bank regularly charges him £150 per month in OD fees!!!!! The trouble is once you have been charged that, the next month you have to find an extra £150 on top of the money to pay the mortgage, bills etc. and if you don't, well they charge you another £150 and so on.

I appreciate that in the ideal world people should not be overdrawn but it does happen. And before these "holier than thou" posters comment, yes, I DO keep a close check on our money, looking at our accounts on the internet several times a week and constantly moving money (through the banks' slow archaic systems) to try and avoid overdrafts, but for those of us who are not awash with cash a bank charge can be the difference between survival and real debt.

And the banks made 40 billion pounds profit last year, I really don't think they need to increase charges to pay their bonuses, do you?

seven-day-weekend

Hey....this subject is difficult. I (now) never use my OD limit. Not so long ago, I used my OD limit. MY son until recently exceeded his OD limit and got charged accordingly (he is on Jobseekers' Allowance).

Actually, looking at when I used my overdraft, and when my son exceeded his limit, yes it was bad or management, pure and simple. My son is single, presumably if he had a wife and family he would get more money. He does not have a lot to pay as a single man. He lives in the family home and has no rent to pay (although it would be paid anyway if he was on JSA).
I have installed two lodgers to help pay the bills.

When we used our OD limit, it was because we had gone from two full-time salaries to two part-time salaries.

The words 'coat' and 'cloth' spring to mind (although we had to do some creative budgeting going from full-time to part-time salaries unexpectedly).

I'm honestly not slating people who are in debt....it's dead easy to do. I suppose we have to have our 'lightbulb moment' before we get into dire strasits. Unfortunately, it doesn''t always happen.

But... bank charges?... yes, I suppose they are after easy targets. If they are illegal, then they should not be charged.

(NB....my son won't even claim his back as he can't believe a bank would do something illegal!):eek:

Tootsie_Roll

Hereward wrote:

I define abusing an account as an act where the account holder tries to improve their situation by exploiting the account provider; therefore, as banks charge fees for exceeding overdraft limits and refusing standing orders and direct debits I cannot see how an account holder is abusing their account: they just end up losing in the end. I agree that this is my opinion, but you stated, in post #75 and above, that you had seen thousands of account holders abusing their accounts. I suggested that this is your opinion as you have not taken each account holders individual circumstances into account. I agree that not all people who incur charges are in financial difficulty (although it could be argued that they are, even if it is for a relatively short space of time).

Do I really have to spell it out for you ? I don't need your definition of abusing an account - you seem only to be thinking about DD's and SO's and you state it is only my opinion when I have stated more than once that I have seen it literally thousands of times. So just because you seem incapable of understanding here it is spelt out for you:

People abuse their current accounts in two ways mainly, firstly by hoarding cheque books, it is quite possible to have 3 unused ones - that's 75 cheques with a potential for £7,500. Secondly, simply by fast spending on a debit card - almost endless potential for running up an unauthorised OD before the card gets recovered. In neither of these situations is the account holders circumstances relevant.

Hereward wrote:

[
Again, in post #75, you mentioned that account holders that pay charges are profitable. I was just pointing out that account providers can make more profit from those who manage their accounts well than from those you manage their accounts badly. In addition to this the risk to the bank is smaller from the account holders who have better money management skills.

No - that's not what I said at all. This is my quote - 'But if its the same people who have just reclaimed hundreds or thousands of pounds back then they're hardly profitable any more are they ? I'm not aware of banks dropping all customers who incur charges - has that been stated somewhere or are you just misunderstanding the situation again ?'

As you can see this has no relevance to customers with a positive balance.

westernpromise

GSD4ME wrote:

My husband's bank regularly charges him £150 per month in OD fees!!!!! The trouble is once you have been charged that, the next month you have to find an extra £150 on top of the money to pay the mortgage, bills etc. and if you don't, well they charge you another £150 and so on.

You won't get a response to this point from the they-deserve-it brigade. I have asked this repeatedly and it is always evaded.

Hereward

Tootsie_Roll wrote:

Do I really have to spell it out for you ? I don't need your definition of abusing an account - you seem only to be thinking about DD's and SO's and you state it is only my opinion when I have stated more than once that I have seen it literally thousands of times. So just because you seem incapable of understanding here it is spelt out for you:

Tootsie_Roll wrote:

People abuse their current accounts in two ways mainly, firstly by hoarding cheque books, it is quite possible to have 3 unused ones - that's 75 cheques with a potential for £7,500. Secondly, simply by fast spending on a debit card - almost endless potential for running up an unauthorised OD before the card gets recovered. In neither of these situations is the account holders circumstances relevant.

I was considering all financial transactions. If your first example is typical then these account holders are committing fraud and they should be prosecuted to the full extent of the law. In your second example, the card holders in question could just be bad at money management: there isn't enough information to suggest that they are abusing their accounts in a similar fashion to your first example, but if they are then, again, they are committing fraud. I find it hard to believe that nearly all of your experiences have been with account holders committing fraud; therefore I still believe that it is not in the best interest of the average account holder to abuse their account. BTW, I am one of those people that hoard cheque books as my bank insists on sending me a new one every 6 - 9 months even though I hardly ever use cheques.

No - that's not what I said at all. This is my quote - 'But if its the same people who have just reclaimed hundreds or thousands of pounds back then they're hardly profitable any more are they ? I'm not aware of banks dropping all customers who incur charges - has that been stated somewhere or are you just misunderstanding the situation again ?'

As you can see this has no relevance to customers with a positive balance.

But your quote implies that account holders incurring chares are profitable (it’s just that they are not if the reclaim them). All I was suggesting was that the banks can make more money, for less financial risk, from those who have a positive balance.

Phatmouse

I cannot believe people are still banging on about this.

Some people will reclaim their charges some won't.

Either way the money in your pocket will not change, so unless you own a bank I suggest you stop spouting off from your ivory towers before someone gets upset.

You are you people to judge anyone. :mad:

MPH80

Phatmouse wrote:

Either way the money in your pocket will not change, so unless you own a bank I suggest you stop spouting off from your ivory towers before someone gets upset.

Got a pension? Invested in a FTSE tracker? Considering doing either?

You almost certainly part own a bank then ...

Either way the money in your pocket will not change

Seen the thread on FD possibly charging? It looks like it might!

You are you people to judge anyone.

Well - I don't know about anyone else - but I've incurred my fair share of charges, but I've sorted out my finances and now closely monitor it such that I haven't even dipped into an overdraft in 3 years.

So I'm someone who was completely financially inept and has sorted himself out. I didn't fall or get born into an ivory tower - I worked bloody hard NOT to get charged and NOT to have an overdraft. It involved a lot of scrimping and saving and even choosing to move back to my parents home to save money.

So I know full well that blaming the banks is not the way forward and that people can avoid charges if they want to.

Oh - and I haven't claimed back a penny because I believe (while it's apparently not legal) it was right that the banks have the ability to charge me a discouraging amount for breaking the T&Cs (which my charges @ about £14-20 were).

M.

Tootsie_Roll

MPH80 wrote:

Got a pension? Invested in a FTSE tracker? Considering doing either?

You almost certainly part own a bank then ...



Seen the thread on FD possibly charging? It looks like it might!



Well - I don't know about anyone else - but I've incurred my fair share of charges, but I've sorted out my finances and now closely monitor it such that I haven't even dipped into an overdraft in 3 years.

So I'm someone who was completely financially inept and has sorted himself out. I didn't fall or get born into an ivory tower - I worked bloody hard NOT to get charged and NOT to have an overdraft. It involved a lot of scrimping and saving and even choosing to move back to my parents home to save money.

So I know full well that blaming the banks is not the way forward and that people can avoid charges if they want to.

Oh - and I haven't claimed back a penny because I believe (while it's apparently not legal) it was right that the banks have the ability to charge me a discouraging amount for breaking the T&Cs (which my charges @ about £14-20 were).

M.

Exactly - we've all been there and learned from our mistakes instead of trying to blame everyone else for our problems.

westernpromise

alexjohnson wrote:

No, because it would be crass.

Like I said, it is always evaded.

Tim_L

MPH80 wrote:

Seen the thread on FD possibly charging? It looks like it might!

Well that's a sure thing then! Possibly definite, maybe, perhaps?

I have money invested all over the place, and I guess I am therefore a bank owner too.

Guess what though? I expect companies I own (or part own) to act lawfully. If they don't then all sorts of trouble can ensue.

But it really matters not at all that there are people who get all hot under the collar about this (and seem terribly confused about whether they want deterrents to those evil people vindictively failing to bother to manage their finances to the penny, or whether they want charges to subsidise their own banking, or pay the returns from the banking elements on their stocks and shares ISAs). You can't, short of lobbying parliament for a change in contract law, do anything about it.

And maybe this is the thing that rankles most?

All very well if you have been charged and decline to have the charges repaid. But this is your personal decision, and others in actual hardship may take a different line. Why not simply respect that that is the way it is instead of spitting venom at other people?