Free banking 'will be axed'

oldwiring

polajoo wrote:

Don't take life too seriously. You'll never get out of it alive.

:rotfl: :T Nor will you if you take it too flippantly. What's the saying?
Life is a terminal disease; the only cure is death.

If we're honest, surely we'll have to admit thatthe banks will decide, not our opinions, though they may have some unquantifiable influence. TBH some of the stories told, assuming they are reasonably true, make me sad for what the once profession has become, with matters like sell at all costs, even if it means being economical with the truth. How dumbed down in some ways things have gotten.

EagerLearner

Graham_Devon wrote:

Because people are not open to listening. They will just turn round and say 'why should I'. When you tell them that this is what is making the UK a worst place to live in and that it leads to the 'sue me' culture they turn around and say 'it's not the same'. When you try and teach them about having an emergency fund, or looking out for themselves, they revert back to 'well the bank keeps taking my money'. So when you say, well get an overdraught its 'why should I'.

Why people lack an understanding of personal welfare and looking after yourself if beyond me.

Only a few sweeping generalisations there then Graham...

I agree we should be held responsible for our banking, but do not agree I should pay a bank £10 a month for the privilege of them having my hard earned cash in their coffers. First Direct are my bank, and seem to be planning a charge like this from January 2006. If this happens, I will move.

There is a minority of people who get stung for bank charges and of these, most do so due to having insufficient money and this in turn generates even more charges/debt. No-one wants to incur charges on purpose. The fact that the charges have now been reduced and that many banks offer interest free and agreed overdrafts will no doubt help many out.

You are right that 'people' lack an understanding of personal welfare - this is because they don't get taught it at school and also because the UK has the highest debt per person in Europe, plus some parents could do more to teach their kids early. Kids seeing their parents get what they want now by using credit doesn't help, or having 5 credit cards maxed out etc.

Sites like this are great for education and support - so that's a start. Please don't get upset by other people's opinions - at the end of the day re bank charges, que sera sera so not worth the stress.

Paul_Herring

polajoo wrote:

Bank charges are unlawful. Fact.

Citation please? I was under the impression that the level of charges were allegedly unlawful, not the charge itself. Where was it decided that the charges themselves were unlawful? Drawing that conclusion because all the banks have folded when brought to court doesn't really count since that doesn't actually create precident.

EagerLearner

Tim_L wrote:

You can't really have one discussion without the other, unfortunately, because the attempt to introduce bank charges is taking place under a smokescreen produced by those reclaiming charges.

I'm relieved to hear you don't think the bank charges will come in :beer: - but do you think FD will continue with their plans?

Also, although I am keen that people don't abuse the system as it were, surely the bank is not totally a victim here? They overcharged for many, many years so part of the refunds now should from that extra 'stash' they made? Plus with the profits announced by the fat cats, I am not feeling too sorry for them

dchurch24

The fact that the charges have now been reduced and that many banks offer interest free and agreed overdrafts will no doubt help many out.

Sadly, the bank charges haven't been reduced. Only credit card 'default' charges.

EagerLearner

Thanks Dchurch - are they not going to reduce bank charges too? At any rate, reduced charges on credit card will still help.

dchurch24

The OFT is preparing to investigate charges on current accounts too, but as with the credit card charges, this will probably take 2 years or so, and several missed deadlines.

However, if we keep the pressure up, I think they won't be able to withstand it for that amount of time and one of them will have to do something about it.

We also have a major project in the pipeline that will put extra pressure on the banks, the OFT and the Govt.

Tim_L

Couple of things. Firstly let's be quite clear about the legal status of bank penalty charges and the OFT position, because Paul has got two separate issues confused.

Issue1: The OFT believe the level of penalty charges to be excessive. They have expressed no view I know of as the the legality of the charges.

Issue2: Under contract law, one party to a contract is not allowed to do anything other than to reclaim actual reasonable costs of a breach by the other. People have been reclaiming charges on this grounds for a couple of years, and certainly long before the OFT intervention. So if as seems likely these charges are greater than the costs to the banks, they are unlawful (whether or not this has been tested in court).

It is therefore the OFT that is concerned at the level of the charges. If the bank wishes to show they are lawful charges (at any level) it must demonstrate it's actual costs and that the costs are reasonable. This is a subtle point, but it is important.

As far as any plans by banks to start charging for current accounts, any bank individually could take this decision, though my guess would be that we are some way away from this point even given the HSBC announcement. FD seem to be suggesting tying charges to the profitability of a customer in other areas, which in many ways is a reasonable model: paradoxically the more prudent money managers are the people who cost the banks most since they resist cross-selling, don't leave large balances in their accounts, and don't have overdrafts and loans. There is a very good case for charging these customers more than someone who is paying in other ways for their current account.

Fundamentally if banks do charge it becomes a question of working out whether or not it's worth sticking with them, and it's a simple equation. This will depend on the deal on offer in many cases, and I'd expect there to be some sweeteners. I must say that for a tenner a month per account I probably wouldn't be worrying too much - you can easily save more than that by changing the filling in your sandwiches. But I will be looking carefully at what is on offer, and looking for signs of backsliding.

EagerLearner

dchurch24 wrote:

The OFT is preparing to investigate charges on current accounts too, but as with the credit card charges, this will probably take 2 years or so, and several missed deadlines.

However, if we keep the pressure up, I think they won't be able to withstand it for that amount of time and one of them will have to do something about it.

Bad news then - 2 years is a long time... what can we do as consumers in terms of pressure to bring this issue forward?

dchurch24 wrote:

We also have a major project in the pipeline that will put extra pressure on the banks, the OFT and the Govt.

Who is 'we' and do tell more about the project

EagerLearner

Tim_L wrote:

(...) paradoxically the more prudent money managers are the people who cost the banks most since they resist cross-selling, don't leave large balances in their accounts, and don't have overdrafts and loans. There is a very good case for charging these customers more than someone who is paying in other ways for their current account.

Yup, that would be me, then Thing is, I would have more products with FD if they were competitive, which they are not right now. So whose fault is it I am costing them most... or more importantly, why would I pay them £10 a month to gain access to their more competitive products when I can just move to a more competitive bank...

Tim_L wrote:

Fundamentally if banks do charge it becomes a question of working out whether or not it's worth sticking with them, and it's a simple equation. This will depend on the deal on offer in many cases, and I'd expect there to be some sweeteners. I must say that for a tenner a month per account I probably wouldn't be worrying too much - you can easily save more than that by changing the filling in your sandwiches. But I will be looking carefully at what is on offer, and looking for signs of backsliding.

True, I am all for sweeteners, but they'd have to be veeeeery sweet to add up to me spending an extra £120 a year for banking compared to my current spend of £0.

All I need right now is a joint and sole bank account, yearly travel insurance, credit card and ISA as I am not a home owner (yet - hope to be in 6 months or so), but as a savvy MSER I also want these 4 products to be competitive. Looks like FD will have to work hard at having to get me to change sandwich fillings... :rotfl: Come on FD - give me something to chew on!