MSE News: Bank switching 'hassle' must be eliminated, as full-scale current account

Biggles

Why was 'MSE news:' thought to be a sensible and informative title for a thread?

GingerFurball_2

The biggest impediment to competition is the fact that in credit banking does not cost consumers.

My main account is a packaged account that I get half price due to working for that bank, and is an account that I've held for 11 years so I'm not switching that account away as I'm not going to get a better deal elsewhere and I'm not sacrificing 11 years of credit history for things like a potential mortgage application.

I also have a Club Lloyds account which I use mainly to get Runners World for free, which saves me £5 a month.

I've got the Halifax Reward account for the free monthly fivers.

I've got a TSB Classic Plus account which I'm using mainly as a savings account because the 5% on £2k is unbeatable.

I have modest savings and so the big in credit balance interest incentives aren't particularly attractive to me as I simply don't have the funds available to properly take advantage.

Other than some interest on a credit balance which varies from provider to provider, where's the incentive for me to switch any of my accounts? Like I said, nobody can beat the price I pay for the package of benefits I get with my account, I don't go overdrawn so cheap overdrafts aren't an incentive, and there's no bank account that offers anything I can't get elsewhere (other than maybe Santander's 123 account.)

I've got an old Co-operative account that could be switched out except I don't have my debit card for that, and there's no accounts available that pay a switching incentive that I'm particularly interested in.

grumbler

A few months ago they said: "...we very much welcome views, which we will carefully consider, before taking a final decision." (>> Bank investigation)

I don't think that there was a single 'view' at MSE that supported their pointless plans, but it's hardly a surprise that all unsupportive views have been ignored. They have to justify their salaries after all.

How long will this 'investigation' last? 18 months IIRC? LOL

It would be nice to know how much it will cost to taxpayers...

Alpine_Star

grumbler wrote: »

A few months ago they said: "...we very much welcome views, which we will carefully consider, before taking a final decision." (>> Bank investigation)

I don't think that there was a single 'view' at MSE that supported their pointless plans, but it's hardly a surprise that all unsupportive views have been ignored.

This might be a complete stab in the dark but it maybe that CMA decided not to trawl for views expressed on MSE and preferred instead to stay within the parameters of their powers and only account for the views of those who actually bothered to respond to the consultation paper.


The large majority of respondents supported the CMA's provisional decision to conduct the investigation.

pmduk

Biggles wrote: »

Why was 'MSE news:' thought to be a sensible and informative title for a thread?

I suspect the cut and paste of the news headline either failed or was forgotten

Archi_Bald

I have switched 3 times this year, using the CASS every time. Nationwide to Coop, Coop to M&S, M&S to Halifax. The only kind of hassle I had was that I had to keep an eye on actually receiving the switching incentive.

I would switch again but unfortunately I have for now run out of switching offers I qualify for. Other than that, I am very happy with the current account offers available from Santander, Lloyds, TSB, Tesco and Nationwide.

I think overdraft costs can be quite outrageous and I would support that all current account providers should be using APR % for their overdrafts, instead of daily charges. But I understand APR % has generally been considered as too difficult to understand, and banks bowed to consumer groups pressure and largely did away with it. Not surprisingly, consumers don't like the new charges either as they are not proportionate to the overdraft amount..............................

If the CMA find the banks "guilty", a likely consequence will be that there won't be any current accounts without a monthly charge, and/or some sort of transaction charges. This will, of course, hit everyone, including those who - quite falsely - claim that their overdraft charges pay for the accounts of "the rich".

I just wonder whether the money the CMA drains for this study could have been better used in educating people about current accounts. E.g. an advertising campaign that tells people that they are allowed more than one current account, and explaining why it can be a very good idea to have more than one. Or explaining that constantly living in an overdraft is a very bad idea and why.

Consumerist

Archi_Bald wrote: »

. . . This will, of course, hit everyone, including those who - quite falsely - claim that their overdraft charges pay for the accounts of "the rich". . .

If overdraft charges don't subsidise "free banking" then where does the money come from to pay for current account services? The banks, of course, would have you believe that non-interest earning current-account balances pay for these services; is that your contention?

grumbler

Consumerist wrote: »

...The banks, of course, would have you believe that non-interest earning current-account balances pay for these services; ...

Why not? Also, cards transactions fees paid by merchants.
The basic services that are free cost very little nowadays, especially as the 'rich' that allegedly are subsidised by the 'poor' hardly ever use over-a-counter services.

Has anybody in the government ever calculated how much it costs to the banks to implement endless 'innovations' imposed by the government, like ridiculously strict AML regulations, or failure to amend archaic senseless laws like section 75 of the CCA? Ultimately it's the customers, including the 'poor' ones, who pay for all this.

Biggles

pmduk wrote: »

I suspect the cut and paste of the news headline either failed or was forgotten

It's been belatedly 'remembered' now.

MegaMiniMouse

I think the bottom line is that most people simply don't find bank accounts, energy suppliers, phone/internet providers particularly interesting.

But people will queue overnight for the latest electronic gadget.

It ought to be possible for the essential bits of modern life to be offered on some kind of fixed-price deal which will be annually updated by the powers-that-be (roughly speaking, that's how our incomes are regulated).

Nationalisation (with all its inefficiencies, and lack of incentives etc) is, conventionally, the only alternative to 'capitalist' profiteering, but it ought to be possible to come up with some kind of compromise.

The privatisation of the various nationalised industries was, SFAIK, intended to provide a fairer price structure for us all, so why is it necessary to have a range of overseeing organisations (ofcom, ofgem, ofwat etc etc) which claims, but frequently fails, to ensure that the free market is working properly, and for the benefit of us all?

If the powers-that-be are seriously concerned about the low take-up of apparently irresistible offers, then they probably need to work harder to make those offers genuinely irresistible. The fact is that the privatised utilities providers don't really offer us any more choice than the nationalised providers which they replaced.