Free banking 'will be axed'

rrobbo

I think that it's important to distinguish between the ethical and financial issues being raised here. It's difficult to have a rational discussion on how people view such changes if those people are accused of taking the cornflakes out of the mouths of starving children. I'm sufficiently thick-skinned not to be bothered by such remarks but they can distract from the few facts that there are about the current situation.

I would actually be interested to see the breakdown of who actually pays these charges at present. What proportion are the single mums who face financial ruin through the purchase of a packet of cornflakes and what proportion are the guy who goes out on the town and can't resist getting one more round or that late night curry that he can't quite afford? Or the guy who had the surefire tip on the 2:30 at Kempton and 'knows' that he'll get the money back anyway? I know someone on a 6 figure salary who pays an absolute fortune in charges because he doesn't bother to organise his finances properly.

Ultimately we should know what we're getting into when we set up a current account and the charges that we will incur if we don't stick to the rules, as several people have already pointed out. In this day and age there are various ways of avoiding unauthorised debt (and 'unauthorised' is one of the biggest issues here). There are personal loans, authorised overdrafts, interest free or low-interest credit cards, etc. I'll accept that not everyone will be in a position to take advantage of all of these options but they are there for most. This may leave some proportion of people who are still left out in the cold and who are exposed to exploitation but we've still got to accept that the banks are commercial propositions accountable to their shareholders and not responsible for the social welfare of the country. If we have issues with social welfare then we can lobby politicians, cast our votes at the ballot or actually do something on an individual basis. How about a scheme where a well-off individual is able to sponsor a single mum with financial worries by providing a financial lifeline (not a totally ridiculous idea - you can sponsor a child in Africa after all). Are there not any socially aware banks that offer a more equitable banking system? What proportion of people here would go to a bank that charged them a fixed fee if that bank guaranteed that they wouldn't impose penalty charges on any of their clients?

What I disagree most about this situation though is the tendency to try and renege on commitments after any benefits have been reaped. This is similar, in my mind, to the people who claim that it's unjust that they should have to pay mortgage tie-ins after their discounted rates have finished. I evaluated the situation, decided that there was too much of a risk with an extended tie-in and went for a higher rate with fewer penalties. The information is there and people should be able to make decisions accordingly. I wonder if the Inland Revenue would accept that I wouldn't have worked this year if I'd known that they were going to take 40% of my salary and, therefore, I shouldn't have to pay anything this year?

From a purely financial perspective the answer is that people should take responsibility for their actions and put their own house in order. If the state needs to provide support for them to do that then that's a separate issue. The issue about charges would then become academic and the market would naturally find a new level - by that I mean that the banks would find other ways of making money.

dchurch24

Will the charges be axed?

Well, I would hope so. And indeed, it's looking increasingly likely. The sheer volume of people sending in DPA requests to the banks has caused some to employ more staff and some to just struggle with demand at the expense of the very little customer service they have left.

Still others have applied to the IC for more time as they simply cannot cope with the demand and fullfill their legal obligation within the 40 day time period.

I think it's these demands on the banks that will force a change of policy rather than the comparitivly small amounts of cash that are being claimed back.

A few million here, a few million there, is nothing to the banks, and if they could withstand the onslaught then I think they would - and will - for as long as they possibly can.

The recent press releases about charging for current accounts are largely propaganda and an attempt to divide the nation into "has charges", "doesn't get charges".

Divide and conquer. And it's working, of sorts.

Graham_Devon

dchurch24 wrote:

Will the charges be axed?

Well, I would hope so. And indeed, it's looking increasingly likely. The sheer volume of people sending in DPA requests to the banks has caused some to employ more staff and some to just struggle with demand at the expense of the very little customer service they have left.

Where do you get your info from!? Its now looking increasingly likely that they will drop charges? And your pushing more people into reclaiming their charges and saying 'well a million here a million there is nothing'...and then also saying in the same post 'well the bank may have to employ more staff to cope with our charges' or 'they will just have to cope with all the work they are giving us'.

So you have no grasp at all on business? If a business is loosing millions and having to employ more staff, then they will find some way of making that money back.

The charges idea is only floating around at the moment, yet your saying all of a sudden that its looking increasingly likely they will drop them? :rotfl:

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?

dchurch24

So you have no grasp at all on business? If a business is loosing millions and having to employ more staff, then they will find some way of making that money back.

Sorry which business is 'loosing' millions? - they have just all recorded record profits - again.

A few million quid to a bank is peanuts - it's like you or I dropping a few pennies on the floor.

What will bring about the downfall of charges is the extra time and effort that are having to put into fulfilling their legal obligations under the DPA with regards to a schedule of charges that people request firstly before going after their charges back.

Like I said a long time ago, you shot yourselves in the foot, along with the rest of the UK population!

Personally I don't think so. If the propaganda is to be believed and there is a fee for a service that I have previously been receiving at the expense of others, then I am happy to pay for it - if it's worth paying for.

Ultimately, we may even see a return to a state where customer service from these monolithic organisations was good. They may actually have to compete with each other once again, and that can only be a good thing for the whole UK banking consumers.

Where do you get your info from!? Its now looking increasingly likely that they will drop charges?

The OFT for one, and a whole host of high-ranking bank officials that 'secretly' feed the CAG information. Also, the Tresury Select Committee.

And for a small part, the popular media.


I give the current charging structure about 12-18 months.

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?

Yes. I have. Have you heard of the poor subsidising the rich?

Not a situation I can agree with I'm afraid.

You would rather be £1.30 better off per month and see others starve? I, personally would gladly part with the extra £1.30 per month to see it stop.

However, the propaganda that has been spread about a broad charging structure will never happen for the very reasons I have outlined above.

Hereward

dchurch24 wrote:

...but everyone who incurs bank charges are apparently frivoulous [sic] with money and need to learn more money management skills. It may suprise [sic] you to know that at any given moment, I could have (and still can) tell you exactly what is in my current account to within about £5, yet I still 'managed' to incur charges to the tune of nearly 2k. Yet, despite the real reasons behind it being outside of my control - short of growing some sort of psychic ability - apparently I am terrible with money and should learn to manage it better etc..etc...

I think you have confused knowledge of your bank account with money (cash flow) management. I do not want to reignite the discussion on the "Why I have no Sympathy" thread, but all good money managers anticipate what expenses (bills) that they are likely to incur over a given period (usually a month) and then make adequate provision to cover them. This does not need any psychic ability as most of your expenses will be similar to the previous month. When managing your money it is wise to hold a contingency (rainy day) fund to cover unexpected events, for example receiving wages late, and this is recommended by most financial advisors. If an organisation followed your method of money management they would soon find themselves in difficulty, as you have discovered yourself, and are likely to go bust.

Hereward

dchurch24 wrote:

The OFT for one, and a whole host of high-ranking bank officials that 'secretly' feed the CAG information.

I would question these "high-ranking" bank officials’ status and motivation. It is not in their best interest to low their own banks profits, as this would lead to them receiving lower bonuses and if discovered would face the sack for disclosing commercially sensitive information. I suggest that these individuals are fairly low level people with axes to grind against their employers.

dchurch24

This does not need any psychic ability as most of your expenses will be similar to the previous month.

Without trying to re-ignite the other thread, but how could I have foreseen my employer not paying me?

I would question these "high-ranking" bank officials’ status and motivation. It is not in their best interest to low their own banks profits, as this would lead to them receiving lower bonuses and if discovered would face the sack for disclosing commercially sensitive information. I suggest that these individuals are fairly low level people with axes to grind against their employers.

Well, that is your opinion. I know it to be false. Not everyone is so self-centered; some people DO have others best interests at heart.

Yes, they would face the sack - that is immaterial to the question that was asked.

Mark7799

Hereward wrote:

I think you have confused knowledge of your bank account with money (cash flow) management. I do not want to reignite the discussion on the "Why I have no Sympathy" thread, but all good money managers anticipate what expenses (bills) that they are likely to incur over a given period (usually a month) and then make adequate provision to cover them. This does not need any psychic ability as most of your expenses will be similar to the previous month. When managing your money it is wise to hold a contingency (rainy day) fund to cover unexpected events, for example receiving wages late, and this is recommended by most financial advisors. If an organisation followed your method of money management they would soon find themselves in difficulty, as you have discovered yourself, and are likely to go bust.

What a simple effect and succint way of putting it. All we need now is for everyone to follow these rules.

If you can't cope with direct debits, don't use them.
Always assume money leaves your account the moment you make the withdrawal, write the cheque, use your debit card etc
Never assume that money is in your account until you've seen it on your statement/ on line banking

Even for those who get/got their charges back, are you doing anything to make sure you don't incur these charges again and get into even more hassle?

dchurch24

Never assume that money is in your account until you've seen it on your statement/ on line banking

So, I should have anticipated the lie in my contract of employment that I was to be paid on a given date by direct transfer, when it was really always at least a few days late and by cheque, not by direct transfer.

I should have cancelled all direct debits on my account and re-instated them when the funds went into my account (taking 10 working days to set up)?

I think the people who were being paid by the DDs would have been a little upset about that, don't you think?

What a lot of hassle just to stop a third party organisation, of whom has no business interfering with a payment to another third party, from unlawfully imposing fines.

Well, it's looking like they are reaping the benefits of what they have been doing now doesn't it?

Talking of 'shirking' responsibility - the banks have been caught red-handed. Their answer: we'll charge everyone then, because of the scum people that have pulled us to order and may be forcing us to act lawfully.

Ahh - poor them.

When managing your money it is wise to hold a contingency (rainy day) fund to cover unexpected events

...and what would I fund this contingency plan with? Buttons, peanuts? You assume that there would be money left over after paying all the bills.

Even for those who get/got their charges back, are you doing anything to make sure you don't incur these charges again and get into even more hassle?

Yes. Stopping using the bank as much as I possibly can, and starting a national campaign to get the regime of charging stopped.

Graham_Devon

It seems, theres a complete lack of understanding here of how business works, in particular, how banking works.

It seems, some people think that the poor look after the rich. Well, thats one very simplistic and very personal (to the poor person) to look at it and lay blame on everyone around them, so I'm going to go to the trouble of trying to put it across a different way.

Say 50 people reclaim charges to the value of £100,000.

That £100,000 that people have taken from the banks could have been used to give 'a poorer' person a mortgage. A first time buyer maybe.

Now, where does all the money come from to provide this mortgage? The bank? Or from the richer people who have invested their money in the bank? I think we all know, even Dchurch knows that the money comes from those with money in the bank.

So those 50 people have reclaimed charges of £100,000. This is escalated to a loss of £200,000 when the bank could have lent that £100,000 for a mortgage, generally raking £200,000 back.

Theres more than 50 people reclaiming their charges. There are admin people working on these charges. Admin people cost money.

Dchurch, all this talk of these starving people, shivering in a blanket eating dry cornflakes, and you actively helping them out is pure rubbish. There are many many other factors as to why they are sitting there shivering unable to even hold a spoon, the bank being a factor right at the very end of the line. Sure, they may be better off for a few weeks when they claim their charges back, but do you really believe that once their charges are back they will be sitting there with the heating on eating cornflakes in milk for the rest of their lives?

What happens when they hit the same situation again? Only this time, they will be charged again for the mistakes they make financially, but will also be charged monthly, even if they don't make a mistake.

Think out of the box. Stop looking at the whole world and the whole way business works from your personal perspective.

Your analogy of banks loosing a couple of million here and there like us dropping a few pennies, also doesnt add up. Our dropping a few pennies is personal loss. The banks loosing millions is loss which they HAVE TO be LAW write dow, keep records of etc etc.

Also, your few pennies, say 20p which you drop on the floor you are unable to make 40p out of by offering services. The millions of pounds 'here and there' for the banks enable them to make twice the amount of millions from giving people like you loans, mortgages, overdrafts etc etc.

We just cannot get through to you, but I hope the above analogy has at least somewhat helped. I run my own business, which is probably why, I can see it from a business perspective instead of my own, very very minute (in the scheme of things) persepctive.

Please stop going on about people shiveringin blankets, we all know it has very very VERY little to do with any bank.

If i was shivering in a blanket I'd be looking at myself wondering why I'm not out there looking for a new job, second job, asking the government for help etc, instead of looking at my bank all day saying 'you nasty bank, look what you done to me'