Free banking 'will be axed'

baldbloke_2

Dixie Dean ...

Love the username. Made me go all misty-eyed. Thanks.
Money's important but sometimes other things seem a little bit more so ...


Now back to the hard stuff ... !

dixie_dean_2

People of my age(27) and probably older don't realise how good he was. The stats are unbeleivable and when you hear what people say about him as well. Beattie's not quite there yet! I'd go and work for a bank if we could resign him!

rrobbo

The question as to whether or not £40 is the right fee for going overdrawn partly depends upon what you're trying to achieve by imposing that fee. If the £40 is intended as a penalty to disuade people from going overdrawn (regardless of the legalities of such a position) then it obviously hasn't worked and needs to be higher. If, however, it is intended to purely recompense the bank for the costs incurred then it would appear to be excessive but, to a degree, it's the bank's perogative to determine what charges are appropriate for the services they provide. As consumers we have the option to either not avail ourselves of that service or find a cheaper service provider elsewhere.

I've just looked at the details of my bank account (First Direct) and they charge £30 for exceeding agreed overdraft limits in any month and a further £25 for each further transaction in the month that compounds the problem. I agree that this sounds a bit steep, which is why I don't go overdrawn (for me £30 is sufficient to dissuade me from doing so). I've no doubt that there are other banks out there with lower charges but I don't switch to them because I don't need to pay the charges. What I also noticed on the site is that I could get an agreed overdraft of up to £500 without paying any arrangement fees. The interest is 18%, which is higher than most personal loans, but it shouldn't be much for someone who dips into the red by a few quid each month. For overdrafts over £500 there's a 1.5% arrangement fee (you could therefore arrange a £2,000 facility for the cost of one penalty charge). Again there are almost certainly other banks out there with lower interest rates and arrangement fees.

The point I'm trying to make is that there are options out there to avoid being hit by big charges and it probably doesn't take much effort for most people to take them up. Everyone who doesn't have enough cash in their current accounts to 100% guarantee that they will always be able to pay all their bills may want to consider getting a fee-free overdraft facility if one is available. If one isn't available with their current bank then they could look for another bank that did offer one. For the permanently overdrawn there are personal loans that offer better interest rates. For anyone with a mortgage but poor account management skills an offset or current account mortgage could help.

I'll reiterate an earlier comment that I do like having free banking (it's better than free, they actually pay me) but I don't see it as a god-given right and I won't lose much sleep if charges are introduced. I would, however, review my situation and determine if I would get a better deal elsewhere.

MPH80

There is no "if" in all this. They are illegal.

There's a bloody big if in this.

You don't call someone a murderer without them being proved guilty in court.

You can't call these charges unlawful (they aren't illegal at all - as someone else pointed out to me) without a judge ruling them as unlawful.

There is no specific case that says they are - so until such time - they can only be believed to be unlawful.

Why the banks aren't defending them is up to them:

Perhaps they are indefensable and the banks know it
Perhaps the banks don't want to reveal their operating margins
Perhaps the banks have genuinely worked out it isn't worth the money and they might as well pay out

Who knows? Who cares? The point is - until they get to court - you cannot say, for certain, that these charges ARE unlawful.

M.

dchurch24

Unlawful - civil
Illegal - criminal

Well now that's a dodgy subject, because for it to not be unlawful would mean that they have incurred costs of £35 when they didn't pay a direct debit due to insufficient funds.

Does it cost that? I don't think so.

As it's an automated process (which HAS been proven), then it stands to reason that to pay a DD when there IS funds available costs the same as they go through the same process.

If that is the case then the banks must be losing money hand over fist and you would expect to be seeing billboard adverts discouraging people from using this method of payment, would you not?

Just because something hasn't been proven does not make it so.

If I had punched someone in the face, but don't get reported and/or prosecuted, does that make it legal?

No.

One case did make it to court, and the charges WERE declared unlawful (in Scotland) - however, before a hearing to discuss declaration was due, the bank (Nationwide in this case) paid over the odds as well as all the money back to the claimant. This means that while a judge HAS decided that the charges are unlawful, it will not go down in case law as such, as the bank did a runner before a declaration was made and the case was dropped.

They effectively bought their way out of a declaration that what they were doing was unlawful.

It's enough proof for me, and indeed if I ever get one of them into court, I shall make reference to it.

MPH80

If I had punched someone in the face, but don't get reported and/or prosecuted, does that make it legal?

But until it is proved you DID punch that person - you can only be alleged to have punched them.

M.

dchurch24

Fair enough.

However, it is unlawful to profit from a breach of contract - common sense dictates that it doesn't cost £35 to send a couple of letters.

dixie_dean_2

MPH - they are definitely illegal (come on, take a bite...)

Robbo - agreed with a lot of that and even gave you a thanks as I thought what you said was very reasonably put but unfortunately ignores a key issue and one that Big old Martin beleives in strongly. For you and me and a lot of people, the idea of managing your account, organising an overdraft to cover mishaps and contacting the bank when there are problems (ie, working WITH them) is all very simple and very obvious. However, as the huge number of people with unmanageable debts, store cards on stupid percent, bank accounts that pay 0.1% interest etc, etc, etc, etc, etc shows, and as Martin knows (hence his desire to set up some sort of money savviness course/charity), this is not easy or straightforward for lots of people. Now, what do we do with them? The mean-spirited and uncompassionate answer is, !!!! them. It's their fault, they are stupid, they are greedy, they are bad people, !!!! 'em again! I think we might be better off not hanging these people out to dry so we can have free banking, not exploiting them, but treating them fairly and offering them advice. But hey, business is business as everyone keeps saying, what about the shareholders? !!!! 'em.

Plutos_2

mnnn. you've got to remember that the money we're claiming back is actually our money in the firstplace. It's not a freebie, or a bonus in any way.

The truth is that the UK banking market is a cartel that needs challenging, and now they're being challenged. Fun!

Graham_Devon wrote:

Look mate. You and I don't know how many people have gone and torn into their piggy banks (I'm not going into whether its valid or not here). The shareholders will not be happy. Share prices will drop etc etc, they have to get their money back somehow. Like I said a long time ago, you shot yourselves in the foot, along with the rest of the UK population!

It's not only about what you and your lot have already taken, it's about all the other greedy people looking to exploit it that haven't yet. A million here and there soon turns into 10's of millions here and there.

As I have said to you many times, it's about financial planning, and thats what the banks are doing. Something you cannot seem to grasp?

You got your quick buck, now your going to have to pay it back over time. Trouble is, so are now, all the UK population. Ever heard of the small minority ruining it for the majority?

MPH80

MPH - they are definitely illegal (come on, take a bite...)

Once more they are not illegal - they are unlawful - big difference.

Secondly - can you please show me the case which laid down in law that the charges are unlawful?

Until you can do that - please stop saying they are unlawful - just add a 'thought to be' or 'believed to be'.

All I'm asking for is a bit of moderation in the rhetoric.

M.