Not claimed back bank fees - success thread

westernpromise

newlywed wrote:

I think this is very likely. I've always been in salaried employment and only got one charge when I wasn't keeping track, but OH is self employed and so he is always getting charged when people pay him late :mad: or work dries up and there is no money to put in the bank to cover debits.

Technically I suppose one should have less sympathy if work dries up. A 'fundamentalist' view might be that if income falls, so should spending. In practice, though, this is difficult - council tax has to be paid monthly, certain costs of being self-employed (owning a vehicle, a mobile phone etc) also tend to be monthly costs you can't change very quickly.

What I have noticed is that those I personally know who get hit with charges don't actually overspend, except on the charges themselves.

How this happens is as follows. If my SIL has a balance of £3900, earns £4000, and spends £4000 that month, her final balance should be £3900. She has a cash buffer roughly equal to one month's spending.

If however she gets paid late, then the £4000 doesn't go in until after she's spent it and gone £100 overdrawn - at which point, all sorts of charges kick in, leaving her with £3815 (assuming £85 a month in charges: she is claiming £6000 off HSBC accumulated over 6 years).

It would only take about 4 years of charges at that level for the bank to take her entire £3900 'float' off her. Every time they raid her account, she has that much less to live on until the next pay cheque, which makes further charges even likelier - they are a themselves a consequence of the original charges and thus her entire debt position has been manufactured by HSBC.

In theory, the self employed should all have working capital equivalent to x months' expenses so this cannot happens. In practice, most self-employed people don't have access to such sums unless they borrow them from a bank to begin with.

The_Boss

I moved into a house in November with my ex-partner. Shortly afterwards, one of the companies I worked for in effect made me redundant, but with no redundancy pay and no entitlement to it. I was earning about £700 a month, of which £440 went to the mrs to pay the mortgage and bills, £159 on my car loan and various others like internet bills.

I still paid my cards, stayed organised and arranged and put other things to one side. Ultimately, this partly caused our split. But you know what? I had an agreement and I stuck to it. I agreed to the terms and conditions and so stuck to them. I put other things to one side such as gym membership, expensive bars etc. In other words, I made an effort. I didnt expect help on a plate or to blame others, I got on with it.

As said by someone else, this thread has a right to exist alongside the other. Only difference is that one isnt being hijacked by people with the opposite view.

dchurch24

The_Boss wrote:

As said by someone else, this thread has a right to exist alongside the other. Only difference is that one isnt being hijacked by people with the opposite view.

It is actually. There's quite a few people in there saying similar things to what you have said, and some that are downright rude.

The_Boss

dchurch24 wrote:

It is actually. There's quite a few people in there saying similar things to what you have said, and some that are downright rude.

Well compare that to here, where the proportion is a lot higher.

At the end of the day, if those guys can have their own back slapping thread, so can we. Those are the terms and conditions. So its no suprise to see that there are still people breaking them!

oldfella

Quote:
so the revenue structure of the banks and credit cards are based on the expectation that people are not paying attention.

does that sound reasonable to you ?


Sorry - I've just got to this - the thread kind of exploded on me ...

Yes I think that's absolutely reasonable.

In fact - the general premise of this site is to find the deals that other people miss because they aren't paying attention.

---

MPH80

Big differences between banks and your examples - a mobile or insurance company is making an offer, you dont have to choose to buy it. You benefit by looking around and finding alternatives. With banking there are no alternatives, if you make a mistake or are poor, you get fined large sums of money.

The whole thing is a public relations disaster for the banks. A charging structure based on excessive penalties for being short of money! How do you create positive customer relations when you annoy a substantial proportion of your customer base ?

Mike

Paul_Herring

oldfella wrote:

if you make a mistake or are poor, you get fined large sums of money.

I thought you were talking about majority of people getting charged through not paying attention, not the minority who make a single mistake (most would not miss the single 12/30 quid charge which is not a large sum to those concerned) or the other minority of charged who happen to be poor (I think this was bashed out in another thread - the poor are unlikely to get stung for charges because they do manage their money).

MPH80

oldfella wrote:

MPH80

Big differences between banks and your examples - a mobile or insurance company is making an offer, you dont have to choose to buy it. You benefit by looking around and finding alternatives. With banking there are no alternatives, if you make a mistake or are poor, you get fined large sums of money.

Of course there are choices and alternatives. I started counting how many banks I could name and I was already over 10 within seconds.

The problem is that people aren't exercising their feet and looking for lower penalties. If they actively told banks they'd want that - banks would provide it. But the majority of the population don't move bank ever which is how this situation of high charges has developed.

The best thing to do is to look here on this website at people asking for recommendations of a new bank account. How many of them want lower charges? How many of them actively say "I want a bank that will charge me no more than £x for a bounced direct debit"? Now contrast that to how many ask for high interest ... suddenly you have a long list ... and guess what - we have a deluge of high interest current accounts.

The whole thing is a public relations disaster for the banks. A charging structure based on excessive penalties for being short of money!

Oh please, banks have always been the evil doer in the eye of joe public. If it wasn't being forced to grovel to the bank manager, it was not giving out credit ... or giving out too much, or not giving a loyal customer a pen when they visited.

This is simply another in a long line of "public relations disasters" for the banks ... and yet they keep going.

Trust me - in 10 years time - the disaster will be that they are forcing people to pay for banking services that used to be free.

M.

westernpromise

MPH80 wrote:

Trust me - in 10 years time - the disaster will be that they are forcing people to pay for banking services that used to be free.

M.

That may happen, but it may not.

At present -- or until very recently -- banks were able to make a nice living on current account business by fining people who mismanaged their money. Some of those people were, no doubt, just inept. But quite a few were in hardship, and once they got into debt, their ability to move their business elsewhere to avoid charges effectively disappeared.

Those customers were effectively taken prisoner by the banks and so it was dead easy to make money. The banks could charge what they liked and the customer couldn't leave.

My SIL is a case in point; her HSBC OD is £4000 and her charges refund claim is £5000 excluding interest - so her entire debt to HSBC was manufactured by them out of the charges they have levied.

That revenue stream is now drying up, but the banks cannot easily simply start charging for something else to replace the income. Why? Because if that were possible, they'd be doing it already anyway.

The banks now have a choice:

1/ survive without illegal charges by cutting their own operating costs
2/ reinvent the product so that people are prepared to pay more for it, or
3/ add charges arbitrarily onto customers, while changing nothing else, and assum none will object or go elsewhere.

In fact 3 isn't really an option at all because if a few banks go down route 1 or 2, the customers - except the inert ones - will all head over there.

So anyone who does end up paying current account charges as a result of others having had theirs refunded will, as they themselves might say, have only themselves to blame.

dchurch24

Apparently, it's about 1 in 4 that is seriously affected by charges to the point of creating more debt - according to Which!

newlywed

westernpromise wrote:

Technically I suppose one should have less sympathy if work dries up. A 'fundamentalist' view might be that if income falls, so should spending. In practice, though, this is difficult - council tax has to be paid monthly, certain costs of being self-employed (owning a vehicle, a mobile phone etc) also tend to be monthly costs you can't change very quickly.

That's the theory but in reality as you say, bills have to be paid and if your income is suddenly £0 for the month you still have rent, electricity, gas, food, council tax, telephone bills. In fact before I came along OH used to buy bread milk and cereal and nothing much else for food and used to sit in the dark and the cold too if there was no money for electric/gas.

When you're sat in the dark, cold and hungry and your bank is taking an extra £30 for each bounced payment you start to wonder what the point of trying to work actually is!!!