Bank Charges Opt Out procedure - how should it work?

PlasticMan_2

dzug1 wrote: »

If it's a bounced cheque it certainly is.

So if a shop-keeper goes to pay in a cheque and it bounces, the shop-keeper gets a letter to let them know and that's the "reason" for charging the cheque-writer £35? Maybe.

Cheques differ majorly from direct debits, standing orders, debit card payments and cashpoint withdrawals, in that the bank cannot block the transaction as it happens. Cheque books allow account-holders to spend money they may well not have, and the bank can't do anything about it (especially in the case of guaranteed cheques).

Hence my feeling is that cheque guarantee cards should be a privilege only afforded to those with a good credit rating or a history of keeping their account in order. A charge is more justified for a bounced cheque.

Personally I never write cheques any more, and I don't like to receive them (it's a pain to pay them into my internet bank!). Cheques and guarantee cards are due to be phased out anyway.

Alpine_Star

ILW wrote: »

Do we really need to base legislation on the most dimwitted in our society.

No. We need to base legislation on the exploitation of ''the most dimwitted'' in our society.

davidgmmafan

KDH001 wrote: »

All valid points mentionwd above, except the fact that these accounts already exist.

Most benefit recipients have these accounts opened directly by the benefit office for payment of benefits directly into their accounts, (prevents fraudulent claims for lost giros, and is cheapper). They are available to everyone.

It shopuld be emphasised, that although you will not acrue bank charges, those same people will get hit with even higher late payment fees from the companies that were being paid by debits or SO's. It just means no cash for you from the hole in the wall.

No doubt the MoneySavings Expert teams will be on hand to try to fix this for you all as their next crusade, instead of teaching you how to handle finances properly in the first place and imprisoning those who persistently offend for theft.

Some of what you say IS valid, there are account which don't have the plethora of charges most current accounts do. However the question is when you open a bank account do you run though in your head the myriad of things that could happen, job loss, divorcer bereavement, and work out how these scenarios would play out and how much the bank will stiff you for? Probably not.

The banks know this and have taken advantage of this to abuse thier position of power and the necessity of having a bank account (try getting paid without one) to not only have amazingly uniform levels of charges in a so called competitive market; they have also taken it on themselves to prioritize the payment of thier (want to spit when I say this because its a lie IMO) service charges over and above any other monies you might owe.

Say the mortgage payment is returned, then a bank charges is applied which means the payment for the next month doesn't go out either - why is it ok for the bank to decides its debt is more important than a mortgage payment or a utility bill? Why aren't other creditors afforded the same luxury? More to the point why do pragmatic debt advisors tell thier clients to open another account? Because they know for the most part the banks will not listen to reason an continue to increase the balance, which I guess looks good to thier accountants, but its all monopoloy money because many people cannot pay up once the snowball starts...

I don't see where you are going about higher late payment fees but if that is the case I say bring it on. I've said several times one thing that's really annoying about charges for unpaid items is its frankly nothing to do with the bank. The bank is just the middleman. If I have a DD to pay my power supplier or the rent, which bounces, the onus is on me to sort it out with the person I owe money to. If they charge me for calls or visits etc that would be reasonable. What the banks are saying is we've done sod all, but we'll have that money thanks, whether or not you can now manage.

I believe there SHOULD be late payment fees, but fees for doing !!!!!! all are ridiculous. The banks agreed in the SUPREME COURT that the charges are much more than thier costs which is the customers main complaint. It is a failing of the law that this is not prohibited and lying is rewarded.

The theft point is non-sense see above highest charges are for UNPAID ITEMS. No money changes hands, and if it is possible for people to authorize payments which puts the banks in a bad spot then the bank is partially responsible for that. Like a utility company that lets its customers build up huge debts which eventually get written off yes the customers ARE to blame but SO IS THE COMPANY.

Please if you are going to express an opinion get a clue and make it an informed one. There are people with different experiences and outlook to you. You might want to listen to them sometime.

davidgmmafan

And now for my answers

1. How important is it to be able to opt-out of unarranged overdrafts on your account? Would you be prepared to switch accounts or providers to obtain the ability to opt-out?

Absolutely yes to both. The question should be why is this development taking so long to occur in a so called competitive market? Banks have thier customers over a barrel...

2. What do you see as the benefits that an opt-out would bring?

Not getting shafted and having snowballing charges primarily. However as others have said it should be op in rather than opt out. I have to be realistic here, there's no reason to stop the banks for example offering a current account WITH charges in return for a market leading interest rate. I'd have no problem with that. Again in a sense its the wrong question - why have we ended up with a system with such uniformity which disadvantages consumers so? Banks have thier customers over a barrel....

3. What factors are you likely to take into account in deciding whether to choose to opt-out?

As above, pros and cons. Does the bank, for example, say that it has no charges but make the ridiculous assertion (as Halifax does currently) that the overdrafts are 0% APR when the charge they do apply works out at eye watering percentages if you are able to do the maths. Worse rates than even your leg breaking money lender types would charge.

4. What risks do you think there are to opting out and how important are they? For example important payments will declined and there could still be an 'unpaid item' fee.

As above the banks will find other ways to shaft people, this is the problem with intervention. See the recent NPower story, a rule change by Ofgem was veiwed totally out of context and worked to the detriment of customers.

I can't really see any disadvantages to the customer other than the above. The banks will actually have to try to earn money rater than just shafting people to get it. A new concept for them I'm sure...

I've never been a fan of the unpaid item fee, at least with a cheuqe there is some work invovled in maintaining the system and returning the physical cheque. This is not so for unpaid items, bank does nothing, NO MONEY CHANGES HANDS customer gets shafted. Great system. If I setup a payment to a company, usually at a discounted rate if I go for DD, and the payment is not made its between me and the company - it has nothing to do with the bank.

5. What are the essential elements that the proposed standards should cover?

As I've said above several times the over-riding principle should be that banks should not have thier customers over a barrel. Customer must take some responsibility for the state of the market they MUST switch often if disattisfied. It really makes me cringe when someone like Angela Knight from the BBA say that banks have millions of satisfied customers.

Maybe they do, or maybe most people just tolerate it because they know they're all pretty crap.

As I've said above I've no problem with higher overdraft rates (not quite the Halifax level I must say) in return for no charges. No problem with banks offering higher in credit interest for people who choose to opt in to charges.

Because bank accounts have become a neccesity for most people the relevent details relating to the account should be in plain an intelligible language. Case in point I've just opened a Natwest Step account which is the most basic of bank accounts. I still got 3 or four books of terms and conditions to read. Is this REALLY all necessary? Or is it designed so that customers give up after half an hour or so?