MSE News: OFT delivers 'flaccid' report on future of bank charges

Alpine_Star

blackanchorage wrote: »

I don't even know what "points score" means. And the bit about the kipper I'm struggling to understand.

What natweststaffmember is saying is that because the banks derive more of their personal current account revenue from forgone interest (50%) than from insufficient funds charges (30%) their is a case to argue that those in credit actually subsidise those who aren't and who pay charges. Either way banking is not free for anyone.

blackanchorage

Thanks Alpine Star. I suppose I was annoyed with those people arguing that "it's in the T&C, so just pay up".

I agree banking cannot be free. But the unreasonable charges will hit poorer people harder. Instead, how about everybody pays a fee for running the account, the bank pays interest on credit balances, and the insufficient funds charges are cut?

Regards

blackanchorage

And it seems to me that the 50% and 30% argument is a bad use of statistics - if it's 20 million people paying the 50%, and 1 million paying the 30%, then the 1 million are still subsidizing the rest.

Regards

natweststaffmember

blackanchorage wrote: »

And it seems to me that the 50% and 30% argument is a bad use of statistics - if it's 20 million people paying the 50%, and 1 million paying the 30%, then the 1 million are still subsidizing the rest.

Regards

People are arguing cross subsidy as an argument which I don't buy and other are arguing that if the charges were made fair that they would have to pay for their banking since their assumption is that unarranged borrowing charges funds the whole of the Personal Current Account market which is blatantly false.
The figures quoted are for 2006 and are based on how current accounts are funded and the revenue from them, ie 2.6 billion pounds was in charges and 4.3 billion was from interest foregone etc.etc.

pingchris

hello again folks,been off the boards for a while,working etc,halifax gave me £2.200 to pay off most of my outstanding priority arrears from my claim of 4.5k,that has taken me roughly one year battling them.

round two begins soon when i get my mind back in gear.keep claiming and good luck to everyone.

orc_2

Very pleased to hear that Chris. I hope it goes someway towards helping resolve things.

Regards

davidgmmafan

" still can't understand why Nationwide can charge £30 for NOT paying a direct debit."

I can't understand why Nationwide states its charges are amongst the lowest... This was true a few years ago but not I believe they would be one of the highest.

I might have a look to see if they still say charges are to cover thier costs, as that's what they used to say.

Re Santander they have one account which I think is backwards. No fees if you have a mortgage with them. Hang on a sec I thought the only reason current accounts are 'free' is so they can try to sell you stuff like mortgages. Who's going to pick thier mortgage based on some triffling current account benefit?

blackanchorage

Nationwide used to be proud of being fair with its members (and in some respects, particularly with the BMR, I think it is).

One of the problems with these excessive fees for going overdrawn is that there seems to be no competing - are there no accounts where there are no fees, and maybe a small monthly fee instead? Or is there some price fixing going on?

(And I'm not counting the Santander account, where as you say the mortgage itself is much more important. )

Regards

Alpine_Star

blackanchorage wrote: »

One of the problems with these excessive fees for going overdrawn is that there seems to be no competing - are there no accounts where there are no fees, and maybe a small monthly fee instead? Or is there some price fixing going on?

HSBC have recently announced a charge free account but it costs £15 a month - more than some packaged accounts with benefits.

''Or is there some price fixing going on?'' Undoubtedly.Read the answer to question 366 here http://www.publications.parliament.uk/pa/cm200809/cmselect/cmscotaf/c319-ii/c31902.htm

orc_2

Alpine_Star wrote: »

''Or is there some price fixing going on?''

Undoubtedly.

Read the answer to question 366 here http://www.publications.parliament.uk/pa/cm200809/cmselect/cmscotaf/c319-ii/c31902.htm

Completely agree and it would be fantastic to prove collusion.