MSE News: Osborne commits to speedier bank account switching

JC_Derby

only half heard a sound bite on radio2 earlier but again the banks were trying to say this would force them to start charging for accounts....my god they have no shame do they

innovate

JC_Derby wrote: »

only half heard a sound bite on radio2 earlier but again the banks were trying to say this would force them to start charging for accounts....my god they have no shame do they

That wasn't the reaction to the 'switch in 7 days' things - - it is the banks' reaction to Gideon saying that he will 'electrify the fence around retail".

I.e. what banks are saying is that if they are really not allowed to gamble [in their investment divisions] with retail customers' money, they will need to charge such customers [even more than they charge them already, by paying them pittance for savings, and charging them a fortune if they have overdrafts].

All the same though - - they do have no shame.

rb10

innovate wrote: »

I.e. what banks are saying is that if they are really not allowed to gamble [in their investment divisions] with retail customers' money, they will need to charge such customers [even more than they charge them already, by paying them pittance for savings, and charging them a fortune if they have overdrafts].

... even though building societies manage to provide free current accounts without the gambling part - so there's no real reason why the ring-fenced banks couldn't either.

dalesrider

rb10 wrote: »

... even though building societies manage to provide free current accounts without the gambling part - so there's no real reason why the ring-fenced banks couldn't either.

That is because they gamble on mortgages......

Remember what happened to Northern Rock :eek:

Thankfully we never had a major slump in the housing market when B/S were the only players in the mortgage market.
If there had been could you imagine the mess when people started to default on them and there was no money left to pay the savers their money back.....

Perhaps the Gov would like to make the oil co's ring fence the retail side from the risk laden exploration side.....
Just look how much cheaper BP petrol could be if they did not have that massive fine to pay.....

ses6jwg

To be honest I have done probably over 100 switches in my 3 years in working for a high street bank and I could quite honestly count on one hand the number of times something has gone wrong!

As long as:

1) You keep money in both accounts whilst the switch is taking place
and
2) Don't rush into closing your old account
and
3) Re-arrange your credits in a timely manner

Then there is very very little to go wrong.

If you can't be bothered to provide your employer with a new account number for your salary then one would question the reason for you wanting to switch banks in the first place!

It's a big fuss over nothing. You walk into your new bank of choice, you sign a few forms, your old bank can even re-direct your credits for you now if you ask nicely!

It's all a big fuss over nothing!

Making it easier won't make any difference because the fact of the matter is people simply don't care.

Every day I get people sat in front of me who can make themselves £600 a year better off by switching banks and they simply do not care.

Anthorn

rb10 wrote: »

... even though building societies manage to provide free current accounts without the gambling part - so there's no real reason why the ring-fenced banks couldn't either.

It is what has been hinted at in hushed circles ever since the banking crisis. That is reverting retail banking to basic banking where all they have to make money is the liquidity value of deposited funds. i.e. Customers deposit money and receive services and not the market value of the funds. The banks then loan out the funds at market value and make a profit. If there are no deposits left then the banks can't do loans and therefore can't make any more profit.

opinions4u

The banks have already committed to a faster switching service.

All he's doing is making political capital out of something that's going to happen anyway.

Be seen to be bashing the banks. Be popular. Much easier than stimulating an economy with enterprise zones, lower taxes and actually cutting public spending (rather than just the rate that public spending increases at).

pmduk

innovate wrote: »

Osborne's plan will only work if all organisations who take money by Direct Debit have an enforcable obligation to work hand-in-glove with the banks on DD changes.

Can you honestly see Osborne being that proactive? I can't.

amiehall

I used an account switching service to move my DDs last year and everything was done very efficiently. EDF did not act on my bank's instructions, but I'm not sure how the bank can be held responsible for that.

I guess if I didn't have enough money to cover 2 months worth of DDs, it might have been more of a problem but as it was, I was able to leave enough money in both accounts and it wasn't a stress which account the money came out of. The bank I was switching to offered me a temporary fee/interest free OD to cover the time I was switching so if I was short of money, I could have left that one unfunded until the switch was complete.

pmduk

dalesrider wrote: »

So we end up with a banking system like america where banks failing is a weekly occurrence.

Wonder how the Gov will feel when they are having to refund people funds lost under the FSCS backing.

Osborne's already said that he wants a system where no bank is too big to fail. Wait until he sees the effect a few bank failures has on overseas confidence in the UK, although, as with most politicians, he'll be out of office by then and will blame the current incumbent for the results of his own decisions.