OFT and Bank Charges

SparciaM

I work for a bank and we had a memo come round that March is when the OFT finish their investigation into OD Charges and are "likely" to rule that a maximum charge of £12 for an unpaid item or for exceeding an OD limit will be put in place.

So what are people going to do then? People are moaning that £35 is too high for going £5 OD and it is excessive - but will people still moan when they get charged £12 for going £5 OD?!?

One notion that is being bounced around at the moment - within banks - is that people will get charged the max possible, but if exceed or have unpaids more than twice or three times a month will have their OD cancelled or acc frozen until wages come back into account. This is done in European countries and in some (france etc) it's ilegal to go into the red without asking the bank first. I think this is where we going to go, which means that more people will be financially worse off, as some people just don't care about charges or just can't budget properly to stay in credit.

People need to realise that an OD is a privelage at the discretion of the bank and nothing more. In the last week I've taken away over 20 ODs due to charges etc and issued statements asking for payment on demand and explaining that no more OD facilities will be given. It's not nice to do, but it's bank procedure now. I spoke to a customer the other day and advised that every month they never entered credit, even though they got paid £2000 a month and he just said "Ah well, that's what the OD is for". When I explained that the OD could be taken away any time and he wouldn't be able to get his wages out, it shocked him and made him realise that he needed to do something, so on that occasion I helped him with a reducing OD to get him back in credit.


Now with Lloyds charging if you don't use a card and FD charging to have an account and MBNA charging if you're in credit on a cc, it's look like people who run their accounts will and never get charged may end up paying twice over (once for bad interest rates and twice for account fees administration etc). I understand that banks say they're not going to bring back fees, but Nationwide did say that if banks start charging they will follow - and aren't Nationwide proud to be different?!?

Maybe we should never have moved away from fee banking? Did banks have ODs and ODs charges back then (60s - 80s) when we paid for banking or is it something come in due to "free banking"?