How will reclaiming bank charges impact banking discussion

Myron_2

I refer to the BBC Radio 2 chat at 27th April 2007. The write-up on the BBC radio 2 web page is; "In 'Your Money And Your Life', we ask whether Martin Lewis has inadvertently brought about an end to 'free banking'.n 'Your Money And Your Life', we ask whether Martin Lewis has inadvertently brought about an end to 'free banking'."

This is the problem with money. It always wins. This time it's not just goung to be the people who go overdrawn, but EVERYONE will be paying the penalty even though the banks already use the cash they are looking after for other business and a fraction of the interest that would go into a savings account is creamed off. They still make a massive profit!

So, now because of this back-lash against bank charges the banks still have the last laugh because they get to introduce bank charges for everyone. Is that not what the banks actually want? Where they got roped into offering free banking and now this backlash is the excuse they are looking for to charge everyone?

How about when you get a bank account you agree to one of two conditions. First is you pay the bank charge, but when you go overdrawn you're not hit by bank charges and the other is that you don't may bank charges, but if you violate the agreement (you go overdrawn) then you take the punishment and pay the charges?

Comments and duscussion welcomed . . .

silkcutblue

Competition will mean there will always be banks not charging for accounts.

This is like mass hysteria.

"OMG!!! CHARGES for bank accounts!" Pft. What next? "You stopped a bank robber by bringing in armed police? Now every criminal is going to get a gun!"

Banks got caught. Tough on them. No one ever said the charges for being a donut were not lawful. What was said was the amounts were not lawful. Totally different.

Myron_2

silkcutblue wrote: »

Competition will mean there will always be banks not charging for accounts.

This is like mass hysteria.

"OMG!!! CHARGES for bank accounts!" Pft. What next? "You stopped a bank robber by bringing in armed police? Now every criminal is going to get a gun!"

Banks got caught. Tough on them. No one ever said the charges for being a donut were not lawful. What was said was the amounts were not lawful. Totally different.

You misunderstood. I'm curious about other thoughts. I hearsd what Martin said on his 1:00pm to 1:30pm about several banks stating current account fees will not be introduced. Was it First Direct that tried dipping it's toe in the water to try charging for banking services unless one of two criteria were met? I think this was having a balance of £15000 or more and/or some other financial service.

If so many other countries are chargine for day-to-day in-the-black banking services then I would not be far off in thinking that the banks here will be watching.

Aftet that I suppose the only other alternative is keeping all your cash under the mattress, but then the days of the pay packet are gone and 99.99% of everyone who works can only get their wage paid into a bank account.

Well, as long as there are a few mightly banks who will NOT introduce bank charges then I suppose everything will be fine and dandy. :beer:

Mollm

Thats great for you...but there are many many people whos lives do not run like clockwork and sometimes they find themselves in a no win situation as they have gone slightly overdrawn, the bank slaps a charge, they go even more overdrawn etc etc etc. These people are not lazy..but the banks are defintely greedy and thoughtless in the way they have treated many loyal customers over the years. I dont mind paying for a service..but I do mind being ripped off by a service which is there to help me manage MY money?

recyclingbox

when i joined Barclays seven years ago and accepted the terms and conditions, the charge for going OD was a tenner. now it is £35! the bank now reckons it costs 150% more to process the charge than it did 7 years ago. Strikes me the charges keep going up to boost the profits. If the charge was reflecting the actual cost at £10, why when they have less staff now and more computers than 7 years ago has the charge gone up by £25?

Myron_2

A this point I bow out of this thread as it look quite clear that my virtual head in in line for a virtual stamping. It seems sometimes it can be a dangerous thing to do to ask questions so as to fully understand a situation. I'll just watch.

ManAtHome

Myron wrote: »

A this point I bow out of this thread as it look quite clear that my virtual head in in line for a virtual stamping.

Why - your post seemed quite sensible to me. If anyone thinks that the banks will slash their charges by 80% without a murmour must be in cloud cuckoo land. I don't have a problem with the people who've reclaimed charges which are currently illegal as no bank has tried to defend them, but I'm afraid that a lot of people who were in the position to reclaim will end up being hit by annual charges.

Think about it - if you were in business, would you prefer customers who always paid up on time..? First Direct are oviously running a "tester" for HSBC, then all the others - once you can't get a free account, where are you going to go?

IvanOpinion

Myron wrote: »

You misunderstood. I'm curious about other thoughts. I hearsd what Martin said on his 1:00pm to 1:30pm about several banks stating current account fees will not be introduced. Was it First Direct that tried dipping it's toe in the water to try charging for banking services unless one of two criteria were met? I think this was having a balance of £15000 or more and/or some other financial service.

If so many other countries are chargine for day-to-day in-the-black banking services then I would not be far off in thinking that the banks here will be watching.

Aftet that I suppose the only other alternative is keeping all your cash under the mattress, but then the days of the pay packet are gone and 99.99% of everyone who works can only get their wage paid into a bank account.

Well, as long as there are a few mightly banks who will NOT introduce bank charges then I suppose everything will be fine and dandy. :beer:

Therer is a lot of misinformation about often being created by journalists who are being fed whatever the banks want them to print. People seem to think that 'paying for bank accounts' is the way that banks will recoup lost revenue. To a certain degree it will be, except that there is a lot more to it than just 'fee free'. Many will become very much elitist products where only those who deposit a minimum amount each month will get them free ... some may even offer additional sweetners (e.g. travel insurance, access to airport lounges etc.) ... some will be free but have all the 'nice-to-haves' removed (e.g. overdraft faciltiies .. in this case we take a backward step in time of people having to stand red faced as they realise they have to put part or all of their shopping back on the shelves). However this all is still the thin end of the wedge (but the bit that journalists like because they can make a few headlines out of it).

We are already seeing credit card interest rates rising (way above any rise in the base rate). What about at the next interest rate rise (possibly May) .. I will be watching some of the numbers closely. Say for example the BoE increase the rate by 0.25%, maybe some mortgage rates will go up by 0.27%, maybe some of the savings rates will only go up by 0.20%. What about your pension scheme? why, despite a better market, did it not perform better than last year?

The one thing that I can 100% guarantee you is that any changes to 'bank charges' is not going to cost the banks a penny, they will recoup it ... and we all know where from.

Ivan

Myron_2

ManAtHome wrote: »

Why - your post seemed quite sensible to me. If anyone thinks that the banks will slash their charges by 80% without a murmour must be in cloud cuckoo land. I don't have a problem with the people who've reclaimed charges which are currently illegal as no bank has tried to defend them, but I'm afraid that a lot of people who were in the position to reclaim will end up being hit by annual charges.

Think about it - if you were in business, would you prefer customers who always paid up on time..? First Direct are oviously running a "tester" for HSBC, then all the others - once you can't get a free account, where are you going to go?

Okay then. I'll give it one more go, but from my attempts at running theories through some forums it always seem like there is one or a few who would gladly love to stab me and turn the knife. Those people simply need to know that this is simply a discussion and flaming someone is now the way to go.

What I wrote is just an idea thrown into the air. No need to shoot me.

Anyway, the THEORY is that the bank's customer can opt, by their own free will to, say, change the arrangment every 6 months. This arrangement is that if the customer is regularly going to be going bayond their limit to pay a small monthly service fee. Now, if a penalty charge isto be applied for some transaction that's gone south it could either be covered by the service fee or there may be a small service penalty charge to pay. Something like an extra fiver or so. Remember, this would be for someone who is going to end up causing the bank grief by hitting the floor and putting their bank balance in the read frequently, or frequently trying to invoke a transactions that are liable not to be honoured. The service charge for the banking service would also serve as a montly reminder that if the person manages their account to keep it in the black then there IS a second option . . .

This second options is as is now, and it's free banking. By opting not to pay a monthly service charge the banks's customer will be advising the bank of their intention to not invoke negative bank balances. The penalty here is a higher penalty charge. Again, a deterrent against mismanaging one's own bank account.

What I disagree about is the stacked charges. Where someone can go in the red and a penalty is issued, which puts that person even more in the red and that invokes more penalties. It's this chain reaction of cascading penalties that is really wrong.

There is another problem, and I've witnessed quite a few people myself doing this, and it's where people seem to live off credit.

Case in point. Gas pre-payment meter. A couple I know have a small problem where one of the partners is always leving off the £5 emergency credit. Recently the policy changed where £5 credit will only be available if at last two credits were applied to the meter before the meter hits £0 . . . or something very similar. I'll have to ask to see how this actually works.

Point is this person who likes using the emergency credit was up in arms because it was not possible to use the emergency credit! This make no sensea at all. Why don't this person imagine that £5 credit on the meter represents £0 in this person's minds-eye?

This country needs to learn not to live off credit alone.

Granted, I understand that there are many situations where having a credit facility makes a huge difference when something unexpected happens and the credit facility serves as a buffer zone, beu this is all that a credit facility is supposed to be. It's not right living off credit alone.

If someone has no choice but to live off a credit facility then somewhere society has failed those individuals and it's a problem that needs to be addressed, but if the individuals (you know who you are) actually live off credit on purpose then those individuals deserve all the penalties they deserve.

Common sense need to be applied to this while penalty charge mess, but the problem with banks and currency is that's it's either totally black or totally white with no in between.

That's my personal understanding of the situation. If I got it wrong then help me understand, but please don't start stabbing me in the back. That goes to everyone who reads this post on this topic.

(PS: Apologies for spelling mistakes, if any. I'm slightly stessed out.)

DavidF

I remember being so stupid when my mother was in one hospital with a stroke and my dad was in a 2nd hospital having an operation to remove a cancerous growth that i managed to go over my limit needed to pay a DD by 2 pence. Cost me the best part of £500 in the end up. At the onset i actually called the bank up and told them my situation with regard to getting my charges removed. Answer was a polite but firm NO. But but but why ? I had had a DD charge returned about 3 years previous to this so i had reached my limit of "freebies". Also worth noting that during my 1st call to the bank i was also informed "think it was because i was crying" that Mr.XYZ its not the Banks fault that your parents are ill. Ok not the greatest person i spoke to but even when i complained about said employee i Still had to pay the charges.

I have sent off the 1st letter today and look forward to having the lot back from these pondlife.