MSE News: 'Free' banking system isn't working, says FSA

This is the discussion thread for the following MSE News Story:

"There's no such thing as free banking and this belief has lead to unhelpful decisions, says the regulator ..."
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  • callum9999callum9999 Forumite
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    The system works fine, the only issue is a group of people who are incapable (or not interested in) working out how to use such a simple system. You go overdrawn without authorisation, you pay a large fee. Hardly rocket science. While "stupid" people do need protecting in law etc., I hardly think it would be fair to legislate to the lowest common denominator at the expense of everyone else.
  • Typical messed up government thinking. I see nothing wrong with the idea that those behaving badly (being overdrawn) should "subsidise" those who behave well and keep their accounts in order.

    Of course, the usual politician thinking is that the innocent majority should pay for the sins of a few. Logic like that is the reason the country is in such a mess. Letting people off who behave badly and making the rest of us pay for them just encourages the reckless behaviour to continue. And yes, that applies to people at the top of the banks as much as it applies to the consistently overdrawn.
    This is everybody's fault but mine.
  • JC_DerbyJC_Derby Forumite
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    "consumers who are overdrawn, especially those beyond their limit, are essentially subsidising everyone else's 'free banking' with sometimes hefty charges."

    No? really?

    So are the FSA expecting those that dont go overdrawn to subsidise those that do?
    The FSA needs to get a dose of reality and realise that Banks are here to make money for their shareholders rather than provide a service for its customers.
    Its been clear for some time that a lot of banks want to move away from a 'free' banking system.
    I mean its not like we are forced to use a bank now (if you have wages paid) is it?oh wait...
  • pqrdefpqrdef Forumite
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    So does the FSA want competition or not? Free banking allows customers to run multiple accounts to exploit the features they offer. Monthly fees would make us stick to one bank, and then that bank would have us just where it wants us.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • LokoloLokolo Forumite
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    See if I were a rich boy (get it? Instead of rich girl.... Gwen Stefani.... just me?)

    I would have a bank with a simple charging structure but no free bank account. However, in this time, would the UK population accept it? I think not.

    Basic Bank Account:
    £12 a year. Comes with debit card and internet banking, ability to have DD and set up your own SOs
    - Cheque Book +£6
    - Telephone Banking +£6
    - Overdraft +12 @ a resonable %
    - Charge of £5 for going over overdraft, DD reject etc.

    Something along those lines.

    That way you are paying for what you want. But given its currently free to have most of that stuff, who would go and pay for that bank account? No-one.
  • c-mc-m Forumite
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    People have the option to either use a paid account or enjoy a free account. What's the problem?

    I'd like to see more social banks/coperatives though
  • LokoloLokolo Forumite
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    c-m wrote: »
    People have the option to either use a paid account or enjoy a free account. What's the problem?

    I'd like to see more social banks/coperatives though

    Did you even read the article?
  • c-mc-m Forumite
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    pqrdef wrote: »
    So does the FSA want competition or not? Free banking allows customers to run multiple accounts to exploit the features they offer. Monthly fees would make us stick to one bank, and then that bank would have us just where it wants us.


    A monthly fee wouldn't stop you changing bank - so competition would still exist.

    It might put an end to people opening 5 accounts with many of them dormant though.
  • c-mc-m Forumite
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    Lokolo wrote: »
    Did you even read the article?


    Yep - Free banking doesn't mean that banks can;t be fair and transparent. They just currently choose not to be.
  • opinions4uopinions4u
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    c-m wrote: »
    Yep - Free banking doesn't mean that banks can;t be fair and transparent. They just currently choose not to be.
    In what way?

    They publish a tariff.

    They tell people what's free and what they get charged for.

    So what's not transparent?
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