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How will reclaiming bank charges impact banking discussion

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  • NeilWNeilW Forumite
    143 Posts
    Part of the Furniture 100 Posts Combo Breaker
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    One thing I've not heard mentioned is that this campaign may help change banks directions.

    <b>At the moment it is in their interest not to help people out because they make money out of it in charges</b>

    So banks would rather bounce transactions than cash them and charge interest because there is £35 in it, rather than 35p. That causes a ripple effect across the entire economy - stuff doesn't get bought, charges and costs accrue throughout the supply chain and even tax doesn't get paid. All because a bank wants to be greedy and obstructive rather than doing their job.

    <b>Remember that a banks job is to lend money</b> That is ostensibly the business that it is in. These illegal charges mean that the bank makes more money out of the business of imposing charges than the business of lending money. That is just wrong.

    Let's have a look at a few examples.

    - Debiting accounts and bouncing transactions before crediting cleared funds <b>on the same day</b>. Why? Because it gets them charges and no other reason (there would be no interest in this case).

    - The complicated and slow transaction clearing system. Primarily this is there so that the banks can make millions while your money is in limbo, but they also make a ton of cash out of charges. The difference between the total balance and cleared balance on an account is quite simply confusing to most people. Confusion leads to mistakes and mistakes lead to charges.

    In my view this push to eliminate charges is a wake up call to the banks that they need to change their systems into one that *enables* transactions and business to happen wherever possible rather than one that tries to shut things down all the time. And the way to do that is to make sure that it costs them money to be obstructive.

    So by reclaiming your bank charges you are giving a shot in the arm to the economy by forcing the banks to be enablers of business rather than destroyers of it.

    NeilW
  • i would disagree that you've saved me any money on this front!
    i've had a bank account with halifax since i was 17, this includes my crazy student years, and i have never been charged! now thanks to what i believe the incorrect 'claiming back of charges', i will be at loss when surely all banks follow suit to First Direct and will introduce a monthly fee!
    its just typical of British economics, you work hard and seem to be worst off! i would believe a visit to the cinema is a rip-off, but i dont claim the cost back because i think it was unfair!

    the bottom line is this "dont spend beyond your means!". you shouldnt expect the bank to run your account for you, you avail of a free banking service and facilities, the bank is not a charity, therefore if you spend what isnt yours you should be charged!!
    there are 1000's of people who pay no attention to their balance, and because of essentially nothing other than lazyness, they continue to receive charges! i certainly agree charges are high, but surely someone else but me can see if you were charged a few times, you'd catch yourself on, manage your money better, rather than continue to ignore the problem!

    i would love to hear anyone's comments on this, everyone is entitled to their opinions on any matter! but i dont look forward to my monthly banking charge thanks to all you lazy people!!1
  • nadsnads Forumite
    2.4K Posts
    Part of the Furniture Combo Breaker
    Hi Adam,

    You raise some very interesting points...
    i've had a bank account with halifax since i was 17, this includes my crazy student years, and i have never been charged
    Firstly, well done in your ability to manage your finances better than others.
    you work hard and seem to be worst off!
    Couldn't agree with you more even if I tried!
    i would believe a visit to the cinema is a rip-off, but i dont claim the cost back because i think it was unfair!
    Unlike a bank charge, you actually received the "pleasure" of watching a film from that £5.60 you spent. Remember it was your decision to go to the cinema.
    In my opinion it is not the fine that is the issue it is the extravagant amount the bank fine that is. £30 for being overdrawn from say £1 - to anything upwards. Really it cost the bank £30 to run an automated script which processed outgoing values and mark the transaction as requiring a letter to be sent whcih again would be an automated process. I don't think so.
    the bottom line is this "dont spend beyond your means!".
    Thanks for the words of wisdom! ;)
    the bank is not a charity, therefore if you spend what isnt yours you should be charged!!
    And we're not a money pit! You do realise the money you put into your bank account is used as liability for their stock brokers to invest that money buying shares in companies from low-risk to high-risk as well as lending to individuals and banks. Lets say your money was used as a loan to an individual who kept on missing their payment date and kept getting charged fines, the bank keeps getting £30 - why don't you get it any of hat £30?!
    We as customers are taking a risk putting money in our accounts for them to spend. It just happens to be that we live in a stable economy and banks don't go bust ala Bearings Bank did in the 90s. When my account is in credit, they're using my money.
    i certainly agree charges are high, but surely someone else but me can see if you were charged a few times, you'd catch yourself on
    It's not that simple. A horrible, horrible snowball effect can take place. Take my example, I changed jobs and my new payroll date was the 10 days late and I ended up with bank fees of £230 last month, now I've got to somehow save £230 this month so the same thing will not happen at the end of this month. This is coming from someone with far fewer expenses than families who needto decide will it be the bills and food or the excessive bank charge.
    but i dont look forward to my monthly banking charge thanks to all you lazy people!!

    From your opinions, you appear to be financially sound so I don't see why you are so concerned about the service charge First Direct has introduced. If brought in by other banks (I bet a tenner Barclays will) it will be filtered to only affect a small % of people and guess what it will be those who already have difficulty keeping their accounts in credit. It's the way the cookie crumbles...

    I hope that helps you to understand my view of the situation.
  • anley1anley1 Forumite
    73 Posts
    Hiya, I've successfully reclaimed about £1,400 from Natwest a few months back, they didn't contest the court which was nice :)

    I'm presently helping a few friends reclaim charges and am trying to get them to hurry up with their letters etc because I'm beginning to think that the banks might start stomping their feet at some stage in the new year.

    Is anyone else feeling that this reclaiming snowball is getting far too large now and poses a real threat to the banks? They afterall have basically unlimited funds when it comes to paying high priced lawyers which they can let loose on the problem.

    I'm not suggesting that these laywers will be used against anyone who tries to reclaim but rather in the background trying to find a solution so the banks can wriggle out etc.

    To summarise - Over the last 6 months it's been pretty easy for anyone to get their bank charges back (as long as they were willing to go all the way to court etc). But in the summer of 2007 will it likely be as 'easy' or will the banks have fought back somehow and made life for the embattled consumer a lot harder.
  • anley I've popped your post into this thread regarding the impact on reclaiming bank charges :)
  • must admit i'm a bit worried as well as it was in the newspaper during the week that 1/2 million people have already made claims! so i'm off to the library tomoz to print my first letters!
    wish me luck!
    'Children are not things to be moulded, but are people to be unfolded'
  • I must admit that this whole affair causes me much amusement as well as frustration. There are a number of important points to consider:

    If the banks have overcharged and in the eyes of the law this would appear to be the case, then they should pay back the customers who have been 'wronged'

    However, I can't help but feel that when you sign an agreement with a company or individual and they lay out in that agreement what the costs will be should you not keep to your side of the bargain, it seems wrong to then be able to complain afterwards that the charges were too high! Afterall, we are told quite clearly by the banks what the costs will be if we exceed our overdraft limits. These might be far too high and off course some will argue that they don't detail them enough but at the end of the day, if you go above your limit, you should expect to have to abide by the contract that you signed when you opened that account.

    In a legal sense, what is happening is actually wrong. Yes, the banks make huge profits, but that doesn't mean to say that they should pay this out to those people who were simply charged what they should have known about. I have a mortage and I pay a rate which is higher than some other high street lenders. What do I do about it? I remortage to someone who charges me less. I don't take the company to court to reclaim 'excess' charges.

    Being someone who went overdrawn when he was a student and paid the ferryman then I didn't like it but looking back, I accept that was the rule. Still, if I had paid these charges recently, I would also be looking at trying to get some of them back!!!

    Its just that I feel from the legal side of things - it doesn't seem right to be able to reclaim something that you had agreed to pay in the first place!
  • That all this publicity about the charges is going to force the banks into a corner and force them to find a way out. With multiple programmes being on TV now including Martin on BBC News this morning the banks are going to find themselves with an influx of people claiming. They are going to have to find a way out of it otherwise its going to cost them billions.
  • On the BBC Business website today, it shows how to claim back your bank charges. It even lets you print out the letter to send to banks to get the charges back.

    I do agree that banks are charging too much, but I think it's all going to go tits up, espicially with the BBC getting involved. I reckon free banking will end this year next and year and we'll all have to pay for an account like FD are doing.
  • I think we'll see more banks doing what First Direct have done. Charge a monthly fee to hold an account. Currently, they are making £3 to £4 BILLION profit from these unlawful charges. They will find some way to recoup this profit.
    How many surrealists does it take to change a lightbulb?
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