'Why? Because they can!' blog discussion.

Former_MSE_Sally

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Why? Because they can!" Blog.

Please click 'post reply' to discuss below.

Mobeer

"Because they can" is a bad answer. You could give much better, more reasoned answers than this.

For example: "How do they justify charging a £50 ‘admin’ fee for cancelling car insurance?"

Answer: They don't have to justify the fee. Having a high fee increases revenue, especially when few enough customers compare cancellation fees on car insurance to make this an area of competition.

pete_v

"Others are less difficult to fix"

Don't you mean "more difficult" or "less easy"?

Pete

Deedee9

:mad: We had to claim on our holiday insurance and we have to claim back the tax on airline flights ourselves!!! How is that right? We pay all the price including the tax to the airline/holiday company and you cannot fly without paying it - so why is the tax witheld on a claim?
Worse some flight companies charge a fee to reclaim so its not worth it to claim it back.....

OlliesDad

Mobeer wrote: »

"Because they can" is a bad answer. You could give much better, more reasoned answers than this.

I think that's the point of the article.. There are so many questions that get sent to him where the answer is simply "because they can".

Your example of "They don't have to justify the fee" is just another way of saying "because they can".

MSE_Martin

pete_v wrote: »

"Others are less difficult to fix"

Don't you mean "more difficult" or "less easy"?

Pete

fixed - thanks

meher

why not should get them to answer their own questions

zerog

meher wrote: »

why not should get them to answer their own questions

There's a £50 fee for that.

jamesd

I have three current accounts. Why do regulators seem to think that I will get better choices when all three are charging me and I end up with only one and more vulnerable to things like the RBS issue? Instead of say making it even more trivial to add a second current account and move in real time standing orders and direct debits around, just as I can today move tens of thousands of Pounds between accounts in seconds.

Why is it bad to have phone and other consumer contracts with lockins of a year or two but good for a pension company like NEST to ban consumers from transferring out at all unless it decides to let them at some unknowable time in the future, regardless of how good or bad the customer service, charges and investments are? Do pension investors whose employers use that one really deserve worse terms than the same money would get in an ISA or other pension where they can move it to whoever offers the best deal?

I have an interest only mortgage. I'm getting 40% or so in combined tax, NI and employer relief on the money I'll use to clear it, via a pension lump sum. Why must those on lower incomes or with less in the way of savings be forced to pay more for their homes than me by making it harder for those who really do have proper repayment plans to do the same?

Why do people think that overpaying on a mortgage at 1.5% interest rate makes them better off instead of delaying their retirement and making them poorer when they do retire? Why do mortgage overpayment savings calculators not also compare that to the gains and possible gains from savings and investments so people can more easily see which could make them better off?

Why does credit scoring ignore assets? Is someone with £100,000 in savings and investments and £20,000 of unsecured borrowing really more of a risk than someone with no savings and £10,000 of unsecured borrowing?

Why do regulators seem to think that the only way to protect those who are less capable is to ban the more capable ones as well, instead of giving them a test to prove that they do know what they are doing?

How do we prevent regulators from over-reacting to problems in the same way but in the opposite direction as financial institutions react to booms?

Why are European regulators repeating what they did during the Great Depression and expecting the result to be different this time around? Mr. Bernanke noticed that European countries recovered the last time around only after the financial easing from leaving the gold standard, why haven't the European politicians and regulators also noticed and done something about it?

Why do some in the US think that electing an investment banker who shipped jobs overseas to be President will help to control investment banking and increase employment in the US?

OlliesDad

jamesd wrote: »

I have three current accounts. Why do regulators seem to think that I will get better choices when all three are charging me and I end up with only one and more vulnerable to things like the RBS issue? Instead of say making it even more trivial to add a second current account and move in real time standing orders and direct debits around, just as I can today move tens of thousands of Pounds between accounts in seconds.

Why is it bad to have phone and other consumer contracts with lockins of a year or two but good for a pension company like NEST to ban consumers from transferring out at all unless it decides to let them at some unknowable time in the future, regardless of how good or bad the customer service, charges and investments are? Do pension investors whose employers use that one really deserve worse terms than the same money would get in an ISA or other pension where they can move it to whoever offers the best deal?

I have an interest only mortgage. I'm getting 40% or so in combined tax, NI and employer relief on the money I'll use to clear it, via a pension lump sum. Why must those on lower incomes or with less in the way of savings be forced to pay more for their homes than me by making it harder for those who really do have proper repayment plans to do the same?

Why do people think that overpaying on a mortgage at 1.5% interest rate makes them better off instead of delaying their retirement and making them poorer when they do retire? Why do mortgage overpayment savings calculators not also compare that to the gains and possible gains from savings and investments so people can more easily see which could make them better off?

Why does credit scoring ignore assets? Is someone with £100,000 in savings and investments and £20,000 of unsecured borrowing really more of a risk than someone with no savings and £10,000 of unsecured borrowing?

Why do regulators seem to think that the only way to protect those who are less capable is to ban the more capable ones as well, instead of giving them a test to prove that they do know what they are doing?

How do we prevent regulators from over-reacting to problems in the same way but in the opposite direction as financial institutions react to booms?

Why are European regulators repeating what they did during the Great Depression and expecting the result to be different this time around? Mr. Bernanke noticed that European countries recovered the last time around only after the financial easing from leaving the gold standard, why haven't the European politicians and regulators also noticed and done something about it?

Why do some in the US think that electing an investment banker who shipped jobs overseas to be President will help to control investment banking and increase employment in the US?

Because they can?

jamesd

Some possible remedies to the "Because they can" questions I asked:

1. MSE running regular "open another current account today" campaigns to increase the number of people who discover how easy online banking makes it to open and move money between different current accounts. Starting with the Halifax Reward account might be interesting. Once you have two it's a lot more obvious how easy it is.

2. Publicising the competing pension auto-enrollment deals without an indeterminate time lockin. Now: Pensions seems like the best of the current bunch but that may change later.

3. Mortgage comparisons are fixable with better tools, particularly tools that try to look at integrated lifetime planning instead of having a bunker approach and treating a lifetime's finances as little pieces instead of a whole. The regulators seem to have a similar but even worse bunker approach to regulation.

The rest require regulators not to have the same short-termism that they are trying to regulate.