Don't blame the campaigners for the end of free banking Blog Discussion

HACZ

tomstickland wrote: »

So you would have preferred to maintain the status quo where punative charges on others subsidised your free banking?

Don't forget, whilst an individual charge of £35 is punitive and needs some amount of distraction on behalf of the customer to incur it, surely you must agree that is reckless for a customer to incur charges amounting to thousands of pounds.
Why can't people take responsibility for their actions, Martin rightly encourages us to switch utility supplier or barter down SKY for a deal. If we can mange that then surely we can realise that if we earn £100 we can't spend £101 and not face consequences?

MarkyMarkD

Indeed, HACZ, and as has been posted very often on here, almost every bank will refund the first instance of any type of "penalty" fee to anyone who asks and explains the circumstances and says that they won't do it again.

Stuart_W

An interesting discussion here.

I too have never paid bank fees, and have tried to locate the highest credit interest rate available to suit may needs.

Surely the only way to avoid "type x" customer subsidising "type y" customer in any way, shape or form is a straight down-the-line high interest but pay-per-action style of charging - not just per cheque, transfer, direct debit etc but also for any statement or cheque book that gets printed - or a premium charge to call customer services with a routine query, a fee to set up/cancel DDs/SOs.

Surely safe, cautious customers who don't go overdrawn will be able to benefit just as much, if not more so, from any new system.

A big factor with current accounts is convenience. I have deliberately made sure my current account allows me access via the Post Office as I'm often in rural locations. The reality of this "free" access is actually about 1.5% lower interest, so I guess I am paying for it, but I don't see that cost.

This will probably be an opportunity for the cheaper automated methods of money handling to be encouraged further by the banks, with the likes of cheques, cash withdrawals and cash deposits being more expensive and automated debit card transactions and direct debits much cheaper.

I don't think any savvy moneysavers are going to suffer - we'll still be able to find a great deal. I think those wishing/needing to stay cash-based, or as close to entirely cash-based as possible, may be at risk of suffering even further unless regulatory safeguards are put in place.

tomstickland

HACZ wrote: »

Don't forget, whilst an individual charge of £35 is punitive and needs some amount of distraction on behalf of the customer to incur it, surely you must agree that is reckless for a customer to incur charges amounting to thousands of pounds.

I've incurred a charge in the past because an outpayment hadn't appeared on online banking yet and I made the same transfer again, then both went through. Hardly reckless.

You should ask some of these on debt free wannabe and ask about their "reckless" behaviour. You'll find many who combined unfortunate circumstances with banks who would not listen and then piled charge on top of charge.

MarkyMarkD

Tom

With respect, making the same transaction twice just because you aren't sure the first one has gone through IS reckless. You could have checked whether the first one had gone through in a number of ways, not least by phoning and checking.

In most of the unfortunate circumstances you are describing, individuals' banks would have given a temporary increase in overdraft limit (say) to cover the period of the misfortune. But rather than ask for this, most of the unfortunate individuals you are talking about simply spent money they didn't have and which they weren't authorised to take.

nobblyned

Why would anyone be happy with the cost of a service they use being subsidised by unlawful charges on other customers of that company?

Contains_Mild_Peril

HACZ wrote: »

Don't forget, whilst an individual charge of £35 is punitive and needs some amount of distraction on behalf of the customer to incur it, surely you must agree that is reckless for a customer to incur charges amounting to thousands of pounds.

It can be scarily easily done. Customers can get caught in a vicious cycle where there inability to pay excessive bank charges incurs more charges, which they are then also unable to pay, and so on. I have a relative who accidentally went overdrwan by a small amount for a matter of hours just before she went on holiday, and came back to find that the bank had charged her for the initial overdraft then charged her again for the unpaid bank charge, then again for each subsequent day she was still overdrawn. She did the responsible thing and went into the bank, explained the situation, and that she couldn't afford to pay the charges all at once but would be able to pay soon (within a month) if they could stop adding more charges relating to their earlier charges in the meantime. They refused to do this and she was
left unable to settle the spiralling bill, and after repeatedly trying to reason with them, eventually had to tell them where to shove their account and take her business elsewhere. Last she heard, the charges amounted to about £3K, all stemming from just one unauthorised overdraft of only a few £s.

MarkyMarkD

Contains_Mild_Peril wrote: »

I have a relative who accidentally went overdrwan by a small amount for a matter of hours just before she went on holiday, and came back to find that the bank had charged her for the initial overdraft then charged her again for the unpaid bank charge, then again for each subsequent day she was still overdrawn.

etc. etc.

So why didn't she have a small authorised overdraft limit to cover this sort of eventuality?

HACZ

tomstickland wrote: »

I've incurred a charge in the past because an outpayment hadn't appeared on online banking yet and I made the same transfer again, then both went through. Hardly reckless.

You should ask some of these on debt free wannabe and ask about their "reckless" behaviour. You'll find many who combined unfortunate circumstances with banks who would not listen and then piled charge on top of charge.

I fully agree that there are many examples of people who after losing a job, divorce or something similar face difficulties whilst they readjust to their new income and expenditure patterns. For these people generally if they have mangeged their accounts well in the past, the banks will provide some sort of facility.

You must agree however that this category of customer cannot make up all of those being charged by the banks. There will be a lrge proportion of people simply not playing by the rules. These customers who use guarantee cards to build up a debt and who constantly don't have money in their account to meet payments should be charged.

tomstickland

With respect, making the same transaction twice just because you aren't sure the first one has gone through IS reckless.

No need for respect.
I think it'd be classed as a "mistake" rather than being reckless. Otherwise someone losing the keys to their car would be reckless too. I worked on the assumption that the online banking was up to date.