MSE News: Banks agree to code to help limit overdraft charges

ses6jwg

Banks are businesses at the end of the day and have to make their money somewhere.

Free current accounts are very expensive to run, and if morons who can't manage their money get charged all the time to subsidise my free banking, then long may that practice continue.

davidgmmafan

Politicians wonder why people are so cynical about them and well everything they say or do. Compare and contrast the following...

Before the election call me Dave said what we would do is refer this to the competition commission.

After the election this waffle which does ABSOLUTELY NOTHING to stop the snowball of charges which IMO is the worst feature of charges. I have never personally suffered from this nightmare, but I can see how it would very easily get out of hand for certain people.

The solution is simple. Given that the banks argued in the SUPREME COURT that the charges are fees for service it is only fair that they are forced to invoice separately for them like any other service provided.

I'm pleased Martin uses the word fine because that is what these charges are outside of some dry legal argument.

I'm trying to ignore post as it is giving me a strong feeling deja vu. If you want to actually do some research and try again it would really help a lot.

PS In addition to waiting for the promised referral to the competition commission I am still waiting for someone to explain to me why the banks are so moronic as to have a system which allows the (potentially) unstoppable snowball of charges referred to above to occur. In this scenario everybody loses.

callum9999

ses6jwg wrote: »

Banks are businesses at the end of the day and have to make their money somewhere.

Free current accounts are very expensive to run, and if morons who can't manage their money get charged all the time to subsidise my free banking, then long may that practice continue.

I'm normally of that view, but I think it's unfair with regards to overdrafts. With things like flights etc. I'm very happy as it just means those "idiots" just have less holiday spending money. With overdrafts on the other hand, the effect can be crippling, and I don't think it's fair for people to have to bear those - whether you see them as "morons" on not.

Alpine_Star

ses6jwg wrote: »

Banks are businesses at the end of the day

How many other 'businesses' do you know who's very existence is guaranteed by the nation?

Premier_2

NorthernStudent wrote: »

... I was wondering if you could have a £10 buffer then an overdraft or reserve (or both), ....

Yes of course.

The £10 buffer (e.g with Lloydstsb) applies whether or not you have an overdraft.
You can certainly have an overdraft facility and take advantage of the £10 buffer

What you can't do is assume the £10 is deducted from your borrowings.

i.e. if you borrow £9 then all you need do is pay back the £9 (as it's within the buffer)

if you borrow £11 then you will not only have to pay back the £11, but also the fees associated with borrowing the £11 (not £11-£10=£1)

NorthernStudent wrote: »

... The info on current accounts doesn't actually specify the buffer as a feature of the account,...

You perhaps need to look a little closer

£10 overdraft buffer. No overdraft fees or interest to pay if you go overdrawn (either Planned or Unplanned) by £10 or less.

http://www.lloydstsb.com/current_accounts/classic_and_classic_plus_accounts.asp

2sides2everystory

I stand corrected in the sense that it seems from what Premier says that Lloyds mess with "buffers" on overdrafts! I don't think Barclays do.


I think that the comments about "whether or not you have an overdraft/planned or unplanned" could be misinterpreted as meaning that if you had say a £500 agreed overdraft facility that if you went to £509, Lloyds wouldn't penalise you. It doesn't work like that, does it?

tifo

Premier wrote: »

The £10 buffer (e.g with Lloydstsb) applies whether or not you have an overdraft.

In have an account with them and don't have this buffer. I've asked them about it and it's not on.

Some months ago they charged me £22 for being 58p overdrawn, so the buffer was definitely not there.

c-m

While it's all very well stating that users should manage their accounts better (and they should), often card transactions can take days to be presented to the bank and deducted.

Are we to reconcile our accounts after every purchase?

MME_2

2sides2everystory wrote: »

I think that the comments about "whether or not you have an overdraft/planned or unplanned" could be misinterpreted as meaning that if you had say a £500 agreed overdraft facility that if you went to £509, Lloyds wouldn't penalise you. It doesn't work like that, does it?

Lloyds wouldn't penalise you with unplanned overdraft charges if you were overdrawn by £509 against a £500 limit. The £10 buffer is added onto your overdraft.

The same applies for the interest free part of any overdrafts. For example, the overdraft on the gold account is interest/fee free for the first £100. Say you went £109 overdrawn with a £200 limit, wouldn't start paying interest or the £5 overdraft usage fee. If you went £110.01 overdrawn however, you would.

tifo wrote:

In have an account with them and don't have this buffer. I've asked them about it and it's not on.

Some months ago they charged me £22 for being 58p overdrawn, so the buffer was definitely not there

EVERY personal customer has the same charging structure. It was brought in in December last year. If you want to post the items in your statement we can have a look?

tifo

MME wrote: »

EVERY personal customer has the same charging structure. It was brought in in December last year. If you want to post the items in your statement we can have a look?

I'll check when my charge was made and I was aware at the time there is meant to be a buffer on the account but they said no there isn't.