"Ending free bank accounts 'fair'"

ollyk

Rafter wrote:

Totally fair in my view.

Why should someone who occassionally go into the red subsidise other customers who manage their finances well.

R.

two simple answers to this one...

1. Because they are removing money THAT DOES NOT BELONG TO THEM - this is effectively stealing money, now what is the penalty for this in a court of law?

2. Because they DO generally have a choice. I agree there are people who get into trouble with spirallying charges but I bet few of these people actually bothered to approach the bank about their problems hey?

I want someone to answer this for me. If, in order to claim the charges, you had to prove, with the use of statements etc, and to the best of your ability, that you had spent your money carefully and not been careless, and that you had to show something in the way of financial management, i.e. justifiably account for a fair proportion of your spends e.g. not withdrawing £50 every Friday & Saturday night and paying for huge plasma's, monthly subscriptions to Sky, holidays you can't really afford etc. would as many people still be claiming for these charges?
I suspect not.

ollyk

PaulW922 wrote:

It is certainly true that if you manage your account properly you can avoid charges - but only someone who has never 'been there' would say that!

What utter rubbish :mad:

Ladygrim

Rafter wrote:

Maybe if banks weren't subsidising their lending through unlawful charges and overpriced insurance, they would be more careful about ensuring loans are affordable for their customers in the first place?
R.

I agree Rafter. Banks are far too eager to get their customers INTO debt, rather than helping them out of it. And dont forget, whilst the bank has YOUR money, they are using it on the money market to increase THEIR profits. What's given to us 'customers' in the way of interest, is a pittance of what they collect for themselves.

And isnt it ironic, that if all the banks customers cleared all their loans/credits etc, the banks themselves would go bankrupt?? They wouldnt have enough money coming in to afford to continue as a business!!!!

LG

ollyk

katecheshire wrote:

OH started a new job - wages should have gone in weekly. After FIVE weeks still no money. (Same for other employees too) Rang the bank to ask for extension to small overdraft - they said no;

Well there is something wrong there.

katecheshire wrote:

we had no holiday at all last year.

Shame that, you know some people don't get holidays for two, three, four or many more years. I feel sorry for you.

oldfella

Originally Posted by Rafter
Totally fair in my view.

Why should someone who occassionally go into the red subsidise other customers who manage their finances well.

R.


two simple answers to this one...

1. Because they are removing money THAT DOES NOT BELONG TO THEM - this is effectively stealing money, now what is the penalty for this in a court of law?

---

not convinced of this, firstly it probably isnt stealing - if the bank volunteers to give you money knowing you havent got any, I dont see how this could be regarded as stealing.

secondly - even if we accept it is wrong, there is a large leap to conclude that as a result the people involved should pay huge sums to subsidise those who are better off

Mike

Paul_Herring

oldfella wrote:

there is a large leap to conclude that as a result the people involved should pay huge sums to subsidise those who are better off

I believe that particular arguement is somewhat flawed.

Generally there are 3 groups of people who end up incurring charges:

1) The 'poor' who (for whatever reason) cannot maintain a positive balance.
2) Those in 'exceptional' circumstances (employer goes bust, berevement etc.)
3) Those who simply cannot be bothered keeping track of what funds they have available.

On the other side of the fence the groups who never/rarely incur charges:

A) The 'poor' who know down to the last penny what funds are available (as opposed to relying on what their current balance is reading.)
Those who have an autorised overdraft but don't rely on it for day to day living.
C) Those 'non-poor' who know roughly what funds are available.

Now I'm guessing of the groups being charged, 3 is the largest. (I've tried looking for sources to this, but have only found anecdotal evidence.) Due to the way 'news' works however we hear lots and lots of horror stories from groups 1 and 2. Those in group 3 just aren't newsworthy enough/too numerous/aren't willing to admit to it.

In addition, I believe group A to be far larger than group 1.

Now, to turn your question on it's head, why should groups A (and *especially* A,) B and C subsidise group 3?

(And before anyone asks, no - I don't have an answer for group 2.)

oldfella

Now, to turn your question on it's head, why should groups A (and *especially* A,) B and C subsidise group 3?

---

I believe the answer is nobody should subsidise anyone - if you damage the bank by borrowing money you should pay the cost of it. I dont see any case for increasing the cost further in order to fund other activities or profit margins at the bank, or to reduce the costs for 3rd parties.

Mike

Paul_Herring

if you damage the bank by borrowing money you should pay the cost of it.

That brings us round-circle back to the cries of Middle Eengland (group 3) saying they are being unfairly charged then pointing to groups 1 and 2 to "explain" why it isn't fair that /they/ get penalised.

I believe the answer is nobody should subsidise anyone

This isn't going to happen. No matter how micro/macroscopically you look at any business you'll see subsidy going on.

Take the totally off-topic example of McDonalds:

Microscopically: The price of their soft drinks subsidises the price of your burgers. (Otherwise the drinks would be dirt cheap and the burgers expensive.) The percentage of the price of each that goes towards paying for the cost of the raw materials is vastly different.

Macroscopically: In a group of stores in an area, a few stores may subsidise another, simply to keep the store open (presence of brand as it were.)

It's similar with the financial sector. On a banking level, mortgages and loans subsidise current accounts and savings.
On a wider level, the poor credit rated subsidise the better credit rated.

An alternative would be to get rid of all savings accounts, all current accounts, all cash ISAs, mortgages, loans etc. and go back to credit unions.

oldwiring

tom188 wrote:

An account where the holder consistently goes over their overdraft limit, has dds and cheques bounced and generally manages their account poorly.

Agreed: this is from the dictionary
1. Failing to do what law or duty requires.
2. Overdue in payment: a delinquent accoun

oldfella

Quote:
I believe the answer is nobody should subsidise anyone

This isn't going to happen. No matter how micro/macroscopically you look at any business you'll see subsidy going on.

---

that really isnt the point. We are not talking about one product subsidising another - we are talking about one group of people subsidising another in a fairly significant way - completely different