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

MarkyMarkD

I think his work are very harsh - by the time you'd got any extra money from them cleared into your account, it would have been too late even if you'd noticed straight away.

Given that you have a basic bank account, I agree that you couldn't have done much with regard to agreeing a temporary overdraft. But you could have demanded the employer transferred some money same-day by CHAPS.

If you are running on limited funds (like most of us are) and have the internet (as you do, as you're posting on here) you should be checking your current account every day. I CERTAINLY check mine on pay-day to see that the correct funds have been deposited.

azjh77

We didn't have online banking at the time...I have learned that lesson though!! I'm constantly checking it now...unless the OH is kicking me off the pc to go on his game!

slenderkitten

HACZ wrote: »

I'm sorry to diagree but the campaigners are in part to blame. The banks have to make money somewhere and I'd prefer they made their money from people who blatantly don't follow simple rules.

In the current system, if you agree overdrafts or perish the thought remain in credit then banking is free and charges are zero! (OK I know they make money on deposits held but essentially at point of delivery we have free banking.)

The evolving system will have the profits of the bank being derived from a larger base, ie those previously enjoying banking will have to pay. My argument is that unless there is an issue around understanding charges then failing to keep within agreed facilities should attract a charge that reflects the cost of managing the account and serving as a deterrant for those who breach rules and agreements. Those that have financial difficulties obviously should be helped with agreed facilities etc.

The evolving system will mean that serial abusers of overdraft facilities etc will be able to carry on with impunity. How will that help them to mange their money better. This is part of a bigger picture where perhaps part of an unauthorised charge or a levy on bank profits could be used to develop an education programme for people to help society move away from the instant purchase culture that has developed over the last 20-30 years and get them to mange their money better.

I do not go overdrawn, if I can't afford a new TV etc I'll save, I get paid by BACs and pay my bills by DD and debit card - why should I subsidise someone who doesn't pay any attention to their balance and regularly goes overdrawn?

i agree completely with what you say. As far as i am concerened it is up to the customer to sort out an agreed overdraft, customers who are regularly going over their limit need to start scaling back on their unnecesary spending, and start looking at their finanacial affairs and making up a budget then the banks can't make a penny out of them, they never made any money out of me and i have a buffer zone on my account.

People have been sleep walking in to this situation, thinking the money is free because its so easily available to them. The system - oft, government laws etc has LET banks illegally over charge people, if they had stepped in at the first instance and checked that banks were overcharging they wouldn't be making huge profits, trouble is now that banks are used to the obscene amounts of money - shareholders will not be happy without big profits. They will now find new ways of charging hence bank accounts may become subject to a monthly or yearly fee. So the answer is yes you can blame in PART - customers, banks & the laws for this mess.

kittykitten

Having read all the previous posts on this subject it seems most people are actually coming to the same conclusion, even if they do appear to be arguing about it - everyone agrees that these charges, no matter how they're incurred, are unlawful. That means they should be reclaimed.

Obviously the other big issue is how people incurred the charges in the first place. Personally I've never had any bank charges, I really do believe I manage my money well because of good finance education - my mum worked for years for a well-known bank and taught myself and my brother from an early age about money management. It seems to me that people with bank charges are split into 2 groups:

I do have every sympathy with people who've got themselves into one-off difficulty through no or very little fault of their own. I fell seriously ill while on holiday with my family a few years ago, and ended up spending 6 weeks in hospital in tenerife. It was purely good luck and help from family and friends that prevented my family's finances from become a mess at this time - if we hadn't had support it would have been very easy for my mum and dad to be stuck in a foreign country with no choice but to draw money they didn't have out of cashpoints to live on - there was no way they were going to leave me in hospital alone!

Then there are the other group of people, who see overdraft as a right not a privilege, and the overdraft money as theirs not the bank's. Basically irresponsible people. I worked behind the counter of a high street bank for a while so know just how many of these people there are - they basically don't understand basic finance. Of course you can say it's not always 100% their fault - it's natural that if your parents live like this, this is what you see when growing up so assume this is the correct way to manage money. But either way these are the people that need educating and discouraging from borrowing this way. Only problem is nobody knows how to do this!

Lotta_Littlies

Ed_86 wrote: »

Ok they shouldn't be making £billions out of 'unlawful' charges but they are as much an admin charge as a deterant!
Speeding for example... £60 and 3 points is only effective because 3 points counts for something the £60 is less of an issue. if it is £2 for going OD or bouncing a cheque where is the deterant?

But that's what makes the charges a penalty (which is what the banks are claiming it's not) rather than just to cover admin costs (which is what they are claiming the charges are).

It's not about the rights and/or wrongs about going overdrawn in the first place and has nothing to do with one group of people who have never had a charge arguing with those who have been hit with a spiral of charges for whatever reason but the point that the banks claim that the charges of £30/£50/£72 made are only to cover administration costs and are not a penalty to the customer.

Now to my mind "administration costs" give me the image of a sheet of paper for the letter, ink, envelope and postage which do not come to the totals of the charges made. The banks have now an opportunity to give us a breakdown as to how they reach the figures they use and what exactly the administration process entails therefore justifying the charges made.

Lotta

MarkyMarkD

It's not the amount which makes a penalty a penalty. It's the basis on which that amount is charged.

If it's an agreed service charge, it's not a penalty irrespective of amount.

You can agree to buy cornflakes from Tesco for £1 or from Harrods for £5. Just because Harrods charge £5 doesn't make that charge a penalty.

Lotta_Littlies

Lotta_Littlies wrote: »

The banks have now an opportunity to give us a breakdown as to how they reach the figures they use and what exactly the administration process entails therefore justifying the charges made.

Lotta

Yes, which is why I said the above.

Lotta

MarkyMarkD

Eh? That doesn't follow from my post at all.

If the charges are not a penalty, the banks don't need to tell you how much their costs are.

Nor do Tesco or Harrods need to tell you how much they pay for a packet of cornflakes, or what they pay for staff and heating and lighting and everything else.

Herrera_2

Some banks seem to be saying that current accounts are dormant if money is not paid in monthly. This seems to be HSBC's policy. The BBA says it cannot comment because each bank sets its own criteria for what is dormant. Is this a way of ending free banking or suggesting that only employed people who have regular income coming in monthly can hold bank accounts with these banks? Would like to hear what others think

Soubrette

MarkyMarkD wrote: »

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.

Not the co-operative credit card - in my younger days I used to write the payment date in my diary and phone them up to pay (didn't know the dd tip then) and one time two stupid pages got stuck together and I wrote the wrong date.

I had one late payment in all my history with them - about 5 years, I didn't make up any heart rending story, I told them the truth and was basically told tough and that I would be charged interest on the whole balance for one month.

It gave me great satisfaction to claim back the charges about 4 years later - plus interest :beer:

Sou