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

alanq

c-m wrote: »

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

But it would discourage folks from having accounts with more than one bank and using the a bank with the lowest cost / best service for any given type of transaction.

adindas

I think has has been twisted ....

The bank get more money from all of us.
They give us 0.1% very few bank might give 1bout 3%.

But when we borrow money they will be asking 8%.
5% margin is really huge given the number of people who save their money ......

Where does the money from us our saving, aour current a/c, etc ?

made money from the people who one who go overdrwan

Alpine_Star wrote: »

The OFT Personal Current Account Market Study found that banks derive significantly more revenue (through net interest income) from those that keep their accounts in credit than from unauthorised overdraft charges incurred by those who overdraw.

And so it can be argued that the category of consumers who keep their accounts in credit actually subsidise the group that don't. But of course such is the lack of transparency of the true cost of retail banking people like you are fooled into thinking otherwise.

NFH

alanq wrote: »

Didn't I read somewhere that it is a criminal offence in some countries to knowingly authorise payments in excess of ones balance / approved overdraft?

Yes, in France you'd be put on a Banque de France blacklist and banned from having an account with any bank in France for up to ten years. British banks' typical £35 charge seems quite reasonable in comparison.

tifo

NFH wrote: »

Yes, in France you'd be put on a Banque de France blacklist and banned from having an account with any bank in France for up to ten years. British banks' typical £35 charge seems quite reasonable in comparison.

In Dubai you'd go to prison .... much like the debtor's prison we used to have here many many years ago.

tagq2

alanq wrote: »

Didn't I read somewhere that it is a criminal offence in some countries to knowingly authorise payments in excess of ones balance / approved overdraft?

From a legal PoV: Criminal law exists to protect society, not to stick its nose in and waste its resources on enforcing private contracts. In the right circumstances it may already be fraud by false representation to, say, knowingly write a bad cheque, but that's because you're handing what appears to be your payment to another party when it actually isn't. But if your bank can't deduct from your credit balance to pay a Direct Debit to Servicecorp. and either (i) bounces it or (ii) gives you credit in the form of an overdraft then what remains is a debt to either (i) Servicecorp. or (ii) the bank. There's no crime.

From a humanitarian PoV: What happened when England had the death penalty for stealing a small amount of food? More hungry people were executed. Those entering an unauthorised overdraft knowingly or frequently will lack education or self-control or are desperate for cash - the solutions are respectively education, help with self-control and assistance with finances. A gratuitous kick from the people/Crown while you're down is nothing but sadistic.

Credit-Crunched

opinions4u wrote: »

Well I suppose the nice shiny £5 reward is slightly sexier than the font used to show all the fees.

http://www.halifax.co.uk/bankaccounts/current-accounts/

But the charges are pretty damned clear for all to see.

Well it is if you're not borrowing from the bank. Indeed, the link above tells you how to get £60 a year out of a current account.

I'm sure the 30,000 or so made redundant by LBG in the last couple of years were all personally responsible for how the USA's sub-prime lending crisis manifested itself in the Credit Crucnch.

Silly comment of the day. Well done.

or the 15,000 front of house Lloyds staff on £12k p.a or the 1700 HSBC staff on £15,000....

People assume bankers mean the average Joe in retail banking, trust me they are not well paid, and generally paid the same as a full time shop worker. Please dont confuse 100 - 200 'key' staff working from London on an investment bankers salary with the average Joe working long days, weekends and under immense sales pressure for less than a road sweeper.

I would not wish redundancy on these, however someone who earns £500 k in bonuses the last 5 years would have less of my sympathy, someone who has 2 children, working class, minimal education laid off has a huge degree of sympathy and understanding from me...

Alpine_Star

tifo wrote: »

The banks didn't say this in the test case at the highest courts in the land.

Yes they did - I attended every day of all three hearings. The OFT Market Study was published in July 08 - well before the Court of Appeal and Supreme Court test case hearings (October 08 and June 09 respectively).

The Market Study found that revenues from unauthorised overdraft charges was indeed 30% but that 50% came from net credit interest income.

It also found that ''banks earned £8.3 billion in revenues from PCAs in 2006. This is equivalent to £152 per active bank account and represents more revenue for the banks than savings and credit cards combined.''

Alpine_Star

adindas wrote: »

I think has has been twisted ....

The bank get more money from all of us.
They give us 0.1% very few bank might give 1bout 3%.

But when we borrow money they will be asking 8%.
5% margin is really huge given the number of people who save their money ......

Where does the money from us our saving, aour current a/c, etc ?

made money from the people who one who go overdrwan

Income that banks derive from savings and loans are separate and irrelevant to the income derived from the personal current account market.

Alpine_Star

JuicyJesus wrote: »

OK, that's revenue - what about profit?

I don't know TBH as banks don't publish a break down of their profits to that extent but as explained in the Market Study net interest income is really an automatic process whereas unauthorised overdraft charges will have a large administration cost by comparison. So I would imagine that for every pound in revenue, net interest income would be more profitable than UO charges.

opinions4u

Alpine_Star wrote: »

Income that banks derive from savings and loans are separate and irrelevant to the income derived from the personal current account market.

So, for absolute clarity, what is this £152 income per current account you're referring to?

(to help, most of it is interest charged on loans).