MSE News: Cap on overdraft charges proposed as banks face calls to promote switching

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
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edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
Current account customers could save an average of £116/year by switching banks, according to the competition watchdog...
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'Cap on overdraft charges proposed as banks face calls to promote switching'
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  • AnthornAnthorn Forumite
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    Doesn't everyone switch if their bank's charges are too high? If not they should.

    On a cap on unauthorised overdraft charges: Appears to be good on the face of it. But I think it will encourage more unauthorised overdrafts which in turn will encourage more account closures.
  • michaelsmichaels Forumite
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    When I shared a house we had a kitty for the utility bills that we all put in a tenner a month into a jar.

    Using an unsecured overdraft is just like 'stealing' from that kitty - sure the money is there and accessible but no one has agreed that you can spend it even if you have the intention of returninng it later - same with an unautherised overdraft, you are taking money from your bank without permission. The bank has not had the opportunity to assess wheter they want to lend you money nor set the terms for repayment so no wonder they want to charge a fair amount for the priviledge.
    I think....
  • michaelsmichaels Forumite
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    My change to the banking indutry would be to change how banks charge their fees so that rather than being able to dip into an account they had to produce a monthly bill which could then be collected via direct debit or whatever other method, just as every other service provider has to do. I suspect this would very quickly lead to charges becoming fair and transparent.
    I think....
  • Paul_HerringPaul_Herring Forumite
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    Another nail in the coffin of 'free in-credit' banking.

    What's not to like about it?
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • PeacefulWatersPeacefulWaters Forumite
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    Those banks being secretive about switching. Tut.

    What nonsense!
  • fun4everyonefun4everyone Forumite
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    Those banks being secretive about switching. Tut.

    What nonsense!

    Yeah actually this was my exact thought as well. "Banks facing calls to promote switching" - that is a joke. They promote switching massively of their own accord. I have opened a few current accounts recently and had switching shoved in my face every time. They were absolutely desperate to get me to do it.
  • BallardBallard Forumite
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    michaels wrote: »
    My change to the banking indutry would be to change how banks charge their fees so that rather than being able to dip into an account they had to produce a monthly bill which could then be collected via direct debit or whatever other method, just as every other service provider has to do. I suspect this would very quickly lead to charges becoming fair and transparent.

    Don't banks already do this? Whenever I pay any interest on my account at First Direct I get a postal advice detailing the fees and charges with a full breakdown and the date on which my account will be debited.
    I hate verisimilitude.
  • PeacefulWatersPeacefulWaters Forumite
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    Ballard wrote: »
    Don't banks already do this? Whenever I pay any interest on my account at First Direct I get a postal advice detailing the fees and charges with a full breakdown and the date on which my account will be debited.

    Yes they do.

    It might not be a direct debit but it is a clearly timetabled deduction from balance.
  • pinkdalekpinkdalek Forumite
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    Those banks being secretive about switching. Tut.

    What nonsense!

    Truth is there are people out there who are more than happy with their current bank, are not bothered about incentives/more money and just prefer the fact that if it is not broke then it don't need fixing.

    I wish there was more consumer information about alternatives to "Which?" I don't think it is fair that they should get all the publicity.

    CAP on overdraft fees? I think for unplanned yes, but if you are the type of consumer who uses an overdraft then you go to the bank who charges the least?

    There's another side to the arguement, high overdraft fees may deter people from using them or even staying in them for long periods of time. As overdrafts are supposed to be short term borrowing this is why banks charge more. A bank is only there to make money, it's a business, if you don't want overdraft fees don't use one.
  • colstencolsten Forumite
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    michaels wrote: »
    My change to the banking indutry would be to change how banks charge their fees so that rather than being able to dip into an account they had to produce a monthly bill which could then be collected via direct debit or whatever other method, just as every other service provider has to do. I suspect this would very quickly lead to charges becoming fair and transparent.

    The charges get advised every month, usually on the monthly statement. They then get deducted some 30 days after the statement date.
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