Something everyone should consider

crazyworld_2

Loz, any comment on my maths skills here? You have acknowledged in this thread that both incomings and outgoings are affected by the charges by the same amount.

Just to clarify:

Total incomings £7719.60 Total Outgoings £8223.61
Less Charges £701.50 £701.50

Adjusted Totals £7018.10 £7522.11


£7018.10 - £8223.61 = -£1205.51
£7719.60 - £7522.11 = +£179.49


Difference of above sum = Loss caused by charges = £1403 (Exactly 2 times the amount of the charges themselves.)


Please clarify the maths here Loz for everybody's benefit.

On edit, just saw your post above - why are you immediately saying that there is something wrong with the maths here and asking me to give you 10 minutes to find the thing that's wrong with it? Surely you should know straight away whether the maths is right or wrong?

LozBingley

OK Here goes! Replying as I read your message.

You have paid IN £7719.60 and paid OUT £8223.61. This means the balance on your account over this period of time has reduced by £504.01

No – a charge only reduces your balance! It is then the balance that effects what is in your account after you pay in! ie if you have an overdraft of £10 and pay in £20 then your balance is £10. If you had had a credit balance of £10 and paid in £20 you would have a balance of £30. OK?

Ermm why are you deducting it from the IN column? Oh ok we will do it your way. You are saying the charges reduce your money IN OK lets go on. So INs were £7719.60 less charges £701.50 making it £7018.10. Agreed!

But if you reduce this side of the equation you must also reduce the OUTs by the same, so that's £8223.61 - £701.50 = £7522.11. Ah you agreed on that too. So we now have INs £7018.10 less OUTs £7522.11 equals reduced balance of £504.01 as at the start!

If the charges had not been taken out you would have still paid IN £7719.60 and paid OUT £7522.11 this equals an increase in you balance of £197.49.

Where have you got this figure from? OK I can see now! -£1205.51 is equal to the reduction of your balance (including charges) of £504.01 less the charges of £701.50! Do you see you have now counted the charges twice!!!
ie -504.01 -701.50 = - 1205.51 because the -504.01 = +197.49 -701.50
You had the right answer at the step before!!!

You should have had an increase of £197.49 over the period but you were charged £701.50 so the sum is + £197.49 - £701.50 = - £504.01 which is what your figures say at the start!

OK ?

Sorry took me a little longer than 10 mins as I had to type out so you could see what I was saying.

LozBingley

crazyworld wrote: »

Loz, any comment on my maths skills here? You have acknowledged in this thread that both incomings and outgoings are affected by the charges by the same amount.

Just to clarify:

Total incomings £7719.60 Total Outgoings £8223.61
Less Charges £701.50 £701.50

Adjusted Totals £7018.10 £7522.11


£7018.10 - £8223.61 = -£1205.51
£7719.60 - £7522.11 = +£179.49


Difference of above sum = Loss caused by charges = £1403 (Exactly 2 times the amount of the charges themselves.)


Please clarify the maths here Loz for everybody's benefit.

On edit, just saw your post above - why are you immediately saying that there is something wrong with the maths here and asking me to give you 10 minutes to find the thing that's wrong with it? Surely you should know straight away whether the maths is right or wrong?

in the sum here you have £7018.10 (which you have adjusted to include the charge) you then take away £8223.61 (which also includes the charge) = -£1205.51 (so you have included the charge twice!)

Sorry

crazyworld_2

Well, thank you for the non patronising reply, i'll even put one of those smiley faces here as a "gesture of good will"

When you look at your statement do you not see both a charge being debited from your account, and when you make a deposit, the deposit being partly eaten up by the charge? On the same statement in fact on most occasions.

Can you tell me why I may not show the effects of the charge on BOTH the "In" column AND the "out" column in such a way as is shown on my statements? (After all, surely my figures must add up to the amounts on each statement?) And why I may not adjust both figures to account for the charge, as that is what appears to also happen in reality.

LozBingley

crazyworld wrote: »

Well, thank you for the non patronising reply, i'll even put one of those smiley faces here as a "gesture of good will"

When you look at your statement do you not see both a charge being debited from your account, and when you make a deposit, the deposit being partly eaten up by the charge? On the same statement in fact on most occasions.

Can you tell me why I may not show the effects of the charge on BOTH the "In" column AND the "out" column in such a way as is shown on my statements? (After all, surely my figures must add up to the amounts on each statement?) And why I may not adjust both figures to account for the charge, as that is what appears to also happen in reality.

Sorry but I don't think you have quite got the hang of this.

If the bank charges you £30 then it appears in the OUT column and reduces the BALANCE.

In the same way that money going in is in the IN column increases the BALANCE.

And money out is in the OUT column and reduces the BALANCE.

You can only have a single transaction in the IN or the OUT column.

You are putting it in both!

OK lets try a different tack here to explain.
Lets say you pay a cheque out of your account but want to show it in the IN column. As you are trying to do with your charges!

You must show it as a negative in the IN column but you can't leave it in the OUT column or the statement will appear to show that you have paid it out twice, so you must also put it in the OUT column as a negative to 'balance' the statement. (see sum at end for negative outs)

This is exactly what you are doing with the bank charges you are trying to move it from the OUT to the IN, you are putting them in the IN column as a negative but leaving them in the OUT column, so your statement (and maths) will never 'balance' and it will appear that the charges have been taken out of your account twice.

Its really just basic algebra but I think you are getting confused because the OUT are shown as positives numbers but act as negatives on the statement. So to put a negative in number in the OUT column means it acts as a positive on the BALANCE as its a Double Negative (that's a positive when it comes to maths).

Sum to show negative outs (or double negatives)
This shows what happens when you take a negative number away from a positive number
+ £10 - (-£10) = £20 not zero.

The whole point of this is that if the Bank charges you £30 you can't say it has cost you £60 because it hasn't!

crazyworld_2

Ok, this will shock you, as you'll have noticed, I do tend to dig my heels in on occasions, when perhaps I am cynical about something, and then it appears that someone is attempting to paint me as an idiot I do so even more, without even considering the facts. (I wouldn't be very good as a judge, i'll admit that)

I apologise, on reflection this morning you were absolutely correct in your maths, and I was wrong. I do admit where I am wrong, but I do tend to be quite a stubborn person sometimes.

I did make a genuine mistake, and that does not mean i'm an idiot, but it does mean that i'm only human after all.

So to everyone - Please don't even consider what i've said at the start of this thread.

Having said that though would you not agree that the "incomplete information" and "non optional extras" still applies as the first message implies, in regard to the banks using unauthorised overdrafts purely for the purposes of clawing back their unlawful penalty charges, while bouncing cheques, and returning direct debits?

As i've said elsewhere, this does appear to imply an "Unfair Relationship between Creditors and Debtors" under the Consumer Credit Act 2006, doesn't it? (I believe that act does cover overdrafts)

Sorry Loz.

LozBingley

crazyworld wrote: »

Ok, this will shock you, as you'll have noticed, I do tend to dig my heels in on occasions, when perhaps I am cynical about something, and then it appears that someone is attempting to paint me as an idiot I do so even more, without even considering the facts. (I wouldn't be very good as a judge, i'll admit that)

I apologise, on reflection this morning you were absolutely correct in your maths, and I was wrong. I do admit where I am wrong, but I do tend to be quite a stubborn person sometimes.

I did make a genuine mistake, and that does not mean i'm an idiot, but it does mean that i'm only human after all.

So to everyone - Please don't even consider what i've said at the start of this thread.

Having said that though would you not agree that the "incomplete information" and "non optional extras" still applies as the first message implies, in regard to the banks using unauthorised overdrafts purely for the purposes of clawing back their unlawful penalty charges, while bouncing cheques, and returning direct debits?

As i've said elsewhere, this does appear to imply an "Unfair Relationship between Creditors and Debtors" under the Consumer Credit Act 2006, doesn't it? (I believe that act does cover overdrafts)

Sorry Loz.

Nothing shocks me - I'm an accountant and its a Crazy World

Can I ask, are you a decorator? :rotfl:

Its OK but as I look at this kind of information day in day out it was glaringly obvious that there was an error in your calculation right from the start.

I think what you have done right from the start is count the charges in your balance and in the OUT column.

ie If you had £50 in your account and they charged you £30 your balance would be £20.

You have looked at your balance and seen its reduced by £30 and wanted that money back. In your example you have expressed this as £50 (the balance it should have been) less £20 (the balance it is) equals £30 difference.

BUT you have the looked at the statement and said to yourself "Hang on they have also charged me £30" and you've added that to this £30 change in balance giving you a total of £60.

THIS IS WRONG because the change in balance is the same £30 that you were charged, not a new £30. HENCE you have counted the charges twice when you say its £60. THIS is exactly the same principle that you applied to your account, which is why you ended up thinking you had been charged twice.

Hope this is all sorted now.