MSE News: Payment bounced? You'll soon have a second chance to avoid fees 21 August 2014 at 5:00PM in Budgeting & bank accounts 12 replies 3.6K views

Former_MSE_Paloma

More banks set to adopt a 'retry' scheme from September where they attempt to process bounced payments again...

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Payment bounced? You'll soon have a second chance to avoid fees




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Credit-Crunched

And how much will this 'retry' scheme add to the costs of the average consumer who keeps within their contractually agreed limits, and makes sure there are sufficient funds to cover their (pre determined) outgoings.

Nanny State Gone Mad

Archi_Bald

Nobody is being nannied with this, are they? I agree though it is a rather costly solution to a problem that shouldn't exist in the first place. It also is just like using an elastoplast to fix a broken bone. The real issue is that some people aren't budgeting properly, and that issue is not getting addressed by this costly solution.

Mr_Goodkat

I would have preferred to see this as a chargeable account feature / service rather than something that everyone will get for 'free' and everyone has to pay for.


In this day and age of, internet banking, faster payments, APS, text message alerts etc etc I don't see why people cannot take responsibility for their own finances and ensure that there are funds in any account that has a payment out due.

MABLE

With one of my bank accounts it allows me to rectify the problem by 3.30 pm before they return an item.

molerat

Top tips to avoid missed payment fees
Here are the Payments Council's top tips for ensuring you don't get hit by unpaid items fees:

• Review your outgoing payments and if any are regularly leaving your account on an inconvenient date, move them to a more suitable day.
• If you need to pay money into your account, the fastest way is by paying cash in to your own bank or by making a faster payment via your online or phone banking service.
• Payments via phone or online banking will generally go through as a faster payment. However, you should check this with your bank if your payment is for more than £10,000.

Seem to have missed the obvious one !!

Herbalus

Archi_Bald wrote: »

it is a rather costly solution to a problem that shouldn't exist in the first place. It also is just like using an elastoplast to fix a broken bone. The real issue is that some people aren't budgeting properly, and that issue is not getting addressed by this costly solution.

The trouble is the FCA and the banks can't make people budget properly, but they can help diminish the costs for people who fail to do so, or those who forget about a payment.

I never have any issues with bounced payments because I operate a buffer system like many of you, so there's always at least £5k between me and my overdraft in San 123, but I know that this is difficult for some.

RedDwarf82

Why everybody supposes this is costly?
A computer is supposed to do it automatically. And the one time cost of changing the software should be minimum.
Banks are updating theirs websites with stupid cosmetic changes that half of the time are worse than the previous version all the time. They could save way more avoiding them.

Or the "cost" you talk about are the "40 million/year in late payment fees"? Because then this would be people with enough money to be far from overdraft complaining because people unable to save at all is going to stop financing their high savings interest rates.

Credit-Crunched

RedDwarf82 wrote: »

Why everybody supposes this is costly?
A computer is supposed to do it automatically. And the one time cost of changing the software should be minimum.
Banks are updating theirs websites with stupid cosmetic changes that half of the time are worse than the previous version all the time. They could save way more avoiding them.

Or the "cost" you talk about are the "40 million/year in late payment fees"? Because then this would be people with enough money to be far from overdraft complaining because people unable to save at all is going to stop financing their high savings interest rates.

Have you any idea how much a 'simple' change to a computer programme costs, and on this size is huge. So not sure your figures are at all accurate. This does not even include beta testing, live testing, letters sent to clients who do have a second chance warning. All these things cost.

High savings rates? I am not sure if you have noticed the near zero BOE base rate over the recent years. Savings rates are far from 'high'. Sub inflation in most instances.

Mr_Goodkat

RedDwarf82 wrote: »

Why everybody supposes this is costly?
A computer is supposed to do it automatically. And the one time cost of changing the software should be minimum.
Banks are updating theirs websites with stupid cosmetic changes that half of the time are worse than the previous version all the time. They could save way more avoiding them.

Or the "cost" you talk about are the "40 million/year in late payment fees"? Because then this would be people with enough money to be far from overdraft complaining because people unable to save at all is going to stop financing their high savings interest rates.

Both! There will be a cost to making this change and there will be an on going support cost of running this service even if it is only minimal.


Banks are not going to like losing a big revenue stream so will need to look at how else they recoup that lost income. It could be that they pull back on the high interest rates they currently pay but equally it could be restructuring other charges for example someone like the Halifax who charge £1 a day for going into an arranged overdraft up to a certain limit could up this charge to £1.50 or £2.


Controlling finances is a persons responsibility and whilst the FCA needs to protect consumers to an extent I see no reason not to charge someone who does not ensure money is in place in a account before a payment becomes due.


Free banking and the perks people who manage their finances well receive, high interest, cash back etc can only continue if people who do not act responsibly pay the price for doing so generate profit for the bank.


Fundamentally why should people who do not manage their finances well not pay the price for doing so and why shouldn't people who manage their finances well not be rewarded for it?

Archi_Bald

RedDwarf82 wrote: »

Why everybody supposes this is costly?

because it is

RedDwarf82 wrote: »

A computer is supposed to do it automatically.

does your computer run on fresh air? do you know anything about running millions of transactions, and making sure they all ran correctly? do you expect emails and texts are completely free of charge? do you expect people who oversee the processes work for free? or may be you expect computers don't need to be told what they need to do? do you expect websites to update themselves? do you expect CS staff to just know about the new processes and rules, without needing any education? or do you expect CS to not know anything about it?

RedDwarf82 wrote: »

And the one time cost of changing the software should be minimum..

I am sure they kept the cost to a minimum but there is still the cost of defining the solution, the development, the testing, the update of procedures / processes / websites / people, the co-ordination with others in the industry (do you think it is by coincidence that 29 banks and building societies do this at the same time?), the commissioning of the software etc etc.