Where does the money go?

Jake'sGran

redragon wrote: »

The point I'm trying to make here is that If I sent an e-mail across to Australia, someone would get this e-mail almost immediately. I was told by my bank (Halifax) that if I paid a fee of £25 the money would be transferred within 2 hours. Not sure if this is BACS or not. I was under the impression that electronic banking is easier and cheaper. Yes it is. But only for the banks!
There needs to be more transparency in the financial industry. I can't believe that there are billions of pounds swirling around the system and not doing anything. Someone is using MY money along with all the other tranactions and using it. Where do you think all these hedge fund managers make their millions? There is only so much money in circulation so us poor old sods are loosing precious days each in lost interest whilst they gain. Yet another scam!

It has been like this for many years and it has only recently started to change. The banks are obviously reluctant to make it faster for us, the customer. I arranged a transfer on Sunday evening and it arrive yesterday. BACS takes three days and CHAPS is the quick one but they charge for it. I am really surprised that you did not know this much about the system.

It seems to me that the banks are taking their time implementing the Faster Payments system and I don't know how they get away with it.

I am always complaining about their systems and last year received two lots of compensation. Some people will not complain as they think it's a hassle but if a customer is treated badly it's worth making the effort. You have to exhaust their internal complaints system and if still not satisfied take it up with the Financial Ombudsman.

rb10

Jake'sGran wrote: »

It seems to me that the banks are taking their time implementing the Faster Payments system and I don't know how they get away with it.

But the good news is that by the end of the year, all transfers must take place by the end of the working day after they are initiated - which, with the current technology available, means that they must go by Faster Payments.

redragon

Well, there's a lot to take in here and thanks to all those who have contributed! I think the whole banking system is very quaint and that seems to be the way that they want it to continue. The reasons are as follows:
1. The 3 days of clearance as has been acknowledged is a 'bolt on' to the paper system. This gives ample opportunity to use the 'in transit' money for their own greedy ways.
2. They are forcing us, the public, to go electronic as it saves the banks staffing costs.
3. They are very opaque about where this money is. I couldn't find out where mine was. As has been previously acknowledged, nobody that has answered so far seems to know either.
One of the biggest problems is that the banks are too powerful. They have the politicians eating out of their hands because they know they would not exist without them.The relationship is far too cosy in my view.
Not only are they too powerful, they also have no real world competition. The Banking sector is a cartel. Everyone knows it but because they are too powerful, nobody has the guts to do anything about it. If any company in manufacturing for example operated in the same way as the banks, they would be out of business very quickly indeed.
As you can see, I am no fan of banks. I'm not talking about the high street banks (although the way some of them operate leaves much to be desired.........yes, that means you, Santander and a few other very poor operators who cannot understand loyalty, customer service etc).
To me, banks and building societies (banks in all but name) are run solely for the benefit of the directors (even cosier relationships.......many directors are on each other's boards!) Nice big share options, lovely protected retirement funds and all at the expense of the people who have to use them.
Scum, the lot of them.
I haven't got that luxury of big money income, having been made redundant at age 50 and being forced to work for myself ever since. I too have overheads, kids, heating, lighting, car, pension fund provision etc. I have never received a bonus in my entire life, not because I was not worthy of one, but because, in my industry, everything is pared to the bone.
If I was not prudent and found I couldn't pay my mortgage, would the public have bailed me out? No.
Anyway, rant over.
Best way forward I think is to spend all my money and let the Government pay for my retirement. It's a no brainer. Let some other poor old sod pay for me to live in retirement ha ha!

Derivative

redragon wrote: »

To me, banks and building societies (banks in all but name) are run solely for the benefit of the directors (even cosier relationships.......many directors are on each other's boards!) Nice big share options, lovely protected retirement funds and all at the expense of the people who have to use them.

Has it taken you fifty years to realise this?
Near enough every company is run for the directors.

redragon

Er.........yes I did. However, when you look at the remuneration of these fat cat bankers, it is vastly superior in remuneration than manufacturing (unless you were a director in the last days of British Leyland but that's another story of political bungling).
As I said before, Banking is a cartel. The sooner it's broken, the better. What it needs is another run on a bank where everyone pulls out their money in cash. Might as well, looking at the paltry returns!

Loughton_Monkey

redragon wrote: »

Er.........yes I did. However, when you look at the remuneration of these fat cat bankers, it is vastly superior in remuneration than manufacturing (unless you were a director in the last days of British Leyland but that's another story of political bungling).
As I said before, Banking is a cartel. The sooner it's broken, the better. What it needs is another run on a bank where everyone pulls out their money in cash. Might as well, looking at the paltry returns!

Well you have made it perfectly clear you don't like banks. Not many of us are 'in love' with them either.

You may, or may not, be aware of Eric Cantana [apparently some 'famous' French Footballer] who used his 'popularity' to co-ordinate a certain day on which everyone should withdraw their money from their bank as a protest. This is what you are suggesting.

All very well, but it ended up miserably for 'Eric' who even himself failed to join in.

I am afraid that we have to look at the 'banking system' in the same way as we do, say, Railways and Telephones. Although 'in theory' we can go to different providers, the trouble is that Railtrack and BT provide the 'infrastructure'. So if, say, Virgin can't get you from New Street to Euston because of leaves on the line, you can't blame Virgin. You can only blame Railtrack and once you want to 'punish' them, it implies you cannot ever use trains again. Similarly you can't use your telephone if you 'blame' BT.

Your original query is about the BACS system. This is part of the 'Infrastructure' of banks. Hence to a large extent, your 'beef' is about banks in general.

Most of us 'live with it' and continue to use trains, telephones, and banks.

But I hope the replies have helped to educate you, at least, to reasons behind this - a state of affairs that has existed almost as long as I can remember. Perhaps you have only just started usung banks?

It might be helpful to consider that years ago, you could only contact your bank by post or personal visit. Once invented, you could contact them by telephone. Thanks to computers, we now have a 4th way of contacting them, which is 'electronically'.

If you contact your bank by any of these 4 methods, then they have a range of instructions they can take. They can do a CHAPS transfer. They can do a BACS transfer. They can (under certain circumstances while the new systems are evolving) do a 'Faster Payment'.

When you get on the internet, you are no more doing an 'electronic' transfer than you are doing a 'telephone' transfer when you phone them. [It has so far defeated inventors how to transfer money over the telephone]. What you are doing is setting up an electronic instruction to your bank to trigger one of a limited range of transfer methods.

opinions4u

redragon wrote: »

Well, there's a lot to take in here and thanks to all those who have contributed! I think the whole banking system is very quaint

Perhaps it is in some ways. But I think it's fair to say that over the last 50 years we've moved from elitest banking facilities to mass banking facilties. We've moved from banks being open for 5 hours a day, 5 days a week, to 24/7 online and telephone support with far longer branch hours too. We've moved from cheque to debit card. From having to pay a fee to cash a cheque at a different branch of the same bank to being able to withdraw cash out of hours from the ATM of a competitor. We've moved to charges for everything to fee-free banking for those in credit.

1. The 3 days of clearance as has been acknowledged is a 'bolt on' to the paper system. This gives ample opportunity to use the 'in transit' money for their own greedy ways.
2. They are forcing us, the public, to go electronic as it saves the banks staffing costs.

Point (1) has been drawn to your attention as being on the verge of death from the beginning of next year. Point (2) is an inevitable impact of dismantling what you're complaining about in point (1). You really can't have same day transfers without it being electronic.

3. They are very opaque about where this money is. I couldn't find out where mine was. As has been previously acknowledged, nobody that has answered so far seems to know either.
One of the biggest problems is that the banks are too powerful. They have the politicians eating out of their hands because they know they would not exist without them.The relationship is far too cosy in my view.

You'll be saying they are all lizards from outer space next if your paranoia continues.

Not only are they too powerful, they also have no real world competition. The Banking sector is a cartel.

Their wholesale fund raising comes at different prices for different banks. Their retail prices to customers vary widely. Despite the Credit Crunch, banking in the UK remains exceptionally competitive. Please list your examples of cartel behaviour.

To me, banks and building societies (banks in all but name) are run solely for the benefit of the directors (even cosier relationships.......many directors are on each other's boards!)

Please provide me with an example of an executive director being on the boards of more than one bank.

Nice big share options

I think many bank executives have lost significant sums of money as a result of these. I'm not losing sleep over it, but their value has plummeted as banks have suffered big losses. Please can you name me a building society executive who has gained from share options.

Scum, the lot of them.

Constructive.

I haven't got that luxury of big money income, having been made redundant at age 50 and being forced to work for myself ever since. I too have overheads, kids, heating, lighting, car, pension fund provision etc. I have never received a bonus in my entire life, not because I was not worthy of one, but because, in my industry, everything is pared to the bone.

Well done.

If I was not prudent and found I couldn't pay my mortgage, would the public have bailed me out? No.

The benefits system is more generous than you may think.

Your rant is misinformed and contains many inaccuracies. While I'm not suggesting that you should love the banks, it would perhaps support your point of view if you were able to provide some of the specific examples that I ask for above.

lampard

Just to add anyone who is stupid enough to think people aren't making fortunes from BACS, PAYE etc held in limbo deserves not to have the money in the first place. It's gambled every single night and the money made is swiped off the top every morning.

Plenty of companies gamble employees pensions every night to make extra cash on the markets for example. Not rocket science.

robmatic

lampard wrote: »

Just to add anyone who is stupid enough to think people aren't making fortunes from BACS, PAYE etc held in limbo deserves not to have the money in the first place. It's gambled every single night and the money made is swiped off the top every morning.

Plenty of companies gamble employees pensions every night to make extra cash on the markets for example. Not rocket science.

Brilliant!

(This is a joke, right?)

Loughton_Monkey

robmatic wrote: »

Brilliant!

(This is a joke, right?)

I don't read it as a joke. I would imagine it's just another of those ill-informed beliefs. Probably heard about the 'overnight money' facilities and confuses this technical accounting practice with 'gambling your pension money'.