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

samjef11_2

tifo wrote: »

I read that "last week, the government announced that it had asked banks to end unauthorised overdraft charges for people who go into the red by a small amount". This is linked with this story.

Why would the govt ask the banks NOT to do something already judged as 'fair' by the supreme court ?

It can ask, but are the banks going to/have to listen?

No No No No and No No

Alpine_Star

stevemcol wrote: »

Car parking
DVD hire
Litter patrols
Lending libraries
Law courts
Tool rental
HMRC

...any industry or service that financially penalises its customers for acting outside the terms and conditions, ergo customers not behaving sensibly, service providers acting reasonably..

Unlike the examples above when incurring bank charges you act within the terms & conditions.

Alpine_Star

tifo wrote: »

Why would the govt ask the banks NOT to do something already judged as 'fair' by the supreme court ?

The Supreme Court didn't judge them as 'fair'. Rather they held that any judgment on fairness or otherwise couldn't be made - at least on the basis of the cost/price ratio.

MPH80

Alpine_Star wrote: »

In my view it's not comparable.

In your scenario the price difference is dependent on when you buy rather than how stupid you are.

Alright then - let's go even more simple:

Two packs of washing powder are on sale, different sizes - one is £1 per kg, one is on special at 50p per kilo. Otherwise identical brand etc.

Those paying the £1 are subsidising the 50p purchases. Everyone has the ability to chose to pay the 50p per kg, but there are those who choose, either through ignorance or being too hasty, to pay the £1. The brand relies on a certain level of that in order to still make money.

If you rush and don't pay attention - you pay more than you need to - just like if you're running your finances and don't control it.

I'll give you - my example is extreme - but I have seen deals like this before and marvelled at anyone who'd pay the extra.

M.

opinions4u

MPH80 wrote: »

Alright then - let's go even more simple:

Two packs of washing powder are on sale, different sizes - one is £1 per kg, one is on special at 50p per kilo. Otherwise identical brand etc.

Those paying the £1 are subsidising the 50p purchases. Everyone has the ability to chose to pay the 50p per kg, but there are those who choose, either through ignorance or being too hasty, to pay the £1. The brand relies on a certain level of that in order to still make money.

If you rush and don't pay attention - you pay more than you need to - just like if you're running your finances and don't control it.

I'll give you - my example is extreme - but I have seen deals like this before and marvelled at anyone who'd pay the extra.

M.

The Persil offer I referenced above is similar.

Big box £6.00 (halif price).

Medium box £6.35 (half the size of the big box).

Yet people will still buy the medium box because it's the size they always get.

stevemcol

Alpine_Star wrote: »

Unlike the examples above when incurring bank charges you act within the terms & conditions.

If you are suggesting that because the T&Cs state a customer will be charged for unarranged borrowing, that a customer is then acting within the T&Cs if they borrow without prior arrangement then of course you are quite correct.

HabitAddict

I wonder how the Government spends tax on interest from those who earn more than the "low income threshold"? :eek:

It's certainly not free banking unless you have an ISA or you're as poor as me

callum9999

HabitAddict wrote: »

I wonder how the Government spends tax on interest from those who earn more than the "low income threshold"? :eek:

It's certainly not free banking unless you have an ISA or you're as poor as me

The same as they spend any other tax.

It certainly is... You don't have to pay anything to operate it, ergo free. The government taxing your income from it - just like from your job - is a completely different matter.