MSE News: Current account market faces full competition inquiry

grumbler

EarthBoy wrote: »

...I think people who complain there's no competition in banking are simply too lazy to compare different banks.

Are there any actually? Lazy people are too lazy to complain either.

patanne

If this is the best thing (or worst depending on your point of view) they can think of in banking to investigate then they should be looking for a new line of work. Alright I admit to being fairly lazy but I don't want to have to go to the bother of changing my bank account every few months for a cheaper deal or better benefits. I just want a bank that does what it says it will do when it says it will do it.

I certainly do not want to go back to the days of banks charging just to run a current account which appears to be the aim. Especially in view of the fact that it is almost impossible to live without one. If you have an overdraft then perhaps it does need more checking for charges, but to be a little brutal here, maybe you have an overdraft because you are not able to figure out the charges!

Anthorn

The comment by BBC's Business Editor on July 18 is very telling:

Free in-credit banking means that customers lack the incentives to move. It also makes it harder for new entrants.

What the government is about is breaking up the dominance of the big four and make retail banking more open to new banks. That's what the Chancellor's support for the ill-fated Co-operative Bank (Camp) Verde fiasco was all about.

But just because the Government says new banks can compete will they do that? For example there is a Handelsbanken branch in my home town but there is no incentive for me to move to them other than having a silly name on my debit card. So I stay where I am because I wouldn't get anything different if I move.

Personally, I think it's all to do with ending free in-credit banking. United Kingdom is an island in a sea of paid bank accounts and the island is about to sink!

Alpine_Star

EarthBoy wrote: »

An article in today's i complains that it's difficult to compare banks' overdraft charges and work out which is the best for your circumstances because all the banks use different systems and rates. Isn't that what competition means, -all the banks having different charging structures, so that you can decide which one is best for you personally?

I think people who complain there's no competition in banking are simply too lazy to compare different banks. Surely they don't want all banks to be forced to use the same system? That would reduce competition, not introduce more of it.

Any economist will tell you that different charging structures don't drive completion, they inhibit it.


There is no competition whatsoever in overdraft charges as they are so ludicrously complicated they are barely capable of comparison.

Archi_Bald

Alpine_Star wrote: »

There is no competition whatsoever in overdraft charges as they are so ludicrously complicated they are barely capable of comparison.

I think that's what the inquiry is aiming at for overdrafts - a single structure for overdraft charges so that people can compare them easily.

So, for instance, they could all say they charge a %age, which can then be easily compared, and where the charges are based on the amount you have borrowed. Just as the banks used to do - - - - until some of them bowed to the pressure of the moans of people saying they can't understand how much an overdraft costs them.

Pincher

I wonder if this is possible.

For the self-employed, it is difficult to show steady income, but what if the bank colluded by providing a front company that pays you your own money, in regular monthly amounts that look like a salary? They set up a two layer account structure, where you pay in your proceeds from jobs on an ad hoc basis. The front company, let's call it Blackhole Enterprises, pretends to be your employer, and pays you monthly. If it's legal, it could revolutionise credit checking, and get you mortgages previously the self-employed were excluded from due to lack of paper work. There are lots of people who are effectively employed by their temp agency, so it's not that outrageous a suggestion.

That's the kind of competition we should encourage. Get customers by providing products they need and want. Not the Ryanair way, by charging the least and provide even less.

System

They already exist - they are called Umbrella companies.

Pincher wrote: »

I wonder if this is possible.

For the self-employed, it is difficult to show steady income, but what if the bank colluded by providing a front company that pays you your own money, in regular monthly amounts that look like a salary?

Consumerist

Message from CMA:

Stop @*@*ing complaining about the banks or we'll give you something to really complain about.

Capiche?

Message ends.