MSE News: Call to end free bank accounts

Former_MSE_Helen

"Banks must be told to stop offering free current accounts, a senior regulator said today ..."

Read the full story:
Call to end free bank accounts

CoolHotCold

This will be a unpopular marketing exercise for any bank that does it first, this will also be a unpopular political option which means no regulatory changes.

In short, talk from someone that can speak his mind freely without actually committing anything.

Lith

It will never happen...

think of the unemployed

and if all banks make even the basic accounts 'paid for' the uk will be in serious trouble.

dalek

Typical money grabbing banks!

Lith

dalek wrote: »

Typical money grabbing banks!

exactly,

think of the entire uk population... it will never happen there will be a riot.

WestonDave

One way to cut benefit costs I suppose - force everyone to have their benefits paid into a bank account, then force the banks to charge for having said bank account, bank makes more profit which the Govt taxes and thereby gets part of benefit payments back!

benjus

Sounds like a load of nonsense to me. For example, why would I want to earn interest on my current account only for it to be taken back in fees?

My impression of the UK retail banking industry is that it's pretty competitive compared with other European countries, and I can't see any evidence that charging for current accounts would have stopped mis-selling. What are these "other services" whose charges could come down?

Reaper

There are 2 glaring problems in his speach:

"I also worry that the banks may not properly understand the costs of products and services they supply.

That's a commercial issue that is up to the banks. It is not his job to make sure the banks make a profit, it is up to the banks to offer a viable product.

"And I worry also that this unclear picture may have encouraged the mis-selling of products that is now causing so much trouble."

There is no connection between the two. If the banks had been making wonderful profits charging customers for current accounts do you really think they would have passed on the chance to make more money selling PPI? They would have done both of course. The aim of a company is to make as much money as possible. There is no target amount of profit at which point they stop trying to make any more!

Gaspode

think the author of these comments has been to one too many boozy lunch with his banker mates - he certainly seems to be completely out of touch with the man on the street - you don't penalise everyone because the banks are being underhand with their charges or people are too thick to check what they'll be charged for when they sign up....

rogerblack

At the moment, in many ways - people on benefits and low incomes _are_ subsidising the better off.

A generalisation, admittedly.

But I think it would be interesting to find out what the breakdown of charges (late fees, unauthorised overdraft charges, ...) by income is.

What would a fair system be?

A simple flat rate per account?
This both disproportionately affects lower income people, and discourages having multiple accounts - as advised in several guides on this site.

A proportion of the average balance?

If this was to happen, it should be absolutely completely mandatory that the fees for sending letters and other things are _not_ done at a profit, and are done at minimum cost.

Perhaps for example, banks being required to offer automated email and text alerts, that if responded to will remove the need for a letter, and reduce or eliminate charges needed by the bank.
There is no excuse whatsoever for charging to send a letter saying 'we're going to charge you money for going overdrawn' - if this can be notified to the customer cheaply or free to the bank.

I note that RBS does this - 'act now alert' - if you have an incoming DD that would 'bounce' - they send you a text, and you can transfer money into the account before noon, and have it paid, and have no fees.

Pincher

"We are satifiied by a £5 a month admin fee for running an account, and feel no need to sell add-on products." :rotfl:

"We are satifiied by a £10 a month admin fee for running an account, and feel no need to sell add-on products." :rotfl:

"We are satifiied by a £XXX a month admin fee for running an account, and feel no need to sell add-on products." :rotfl:

At what point does a commercial organisation STOP trying to make more money?