Dysfunctional credit reporting makes me £15

Arleen

GingerBob wrote: »

Yes, all well and good. But, as I mentioned, the principle of carrying out a credit check - which can have unwanted, adverse effects - is surely tied in with someone applying for real credit. The banks and CRAs have, over the years, sneaked in new procedures like this, where credit checks are carried out for ostensibly non-credit products. It was not that long ago that current accounts did not come within the scope of the CRAs at all. Following pressure and bribery from the CRAs that is not now the case. I contend that the current arrangement is not in the consumers' best interests.

Actually the "pressure" came from anti-money laundery prevention laws.

I have a great recommendation for you - close all your accounts, move to a cave and preach people to abandon the idea of credit economy. And yes, south park did it.

GingerBob_3

Arleen wrote: »

Actually the "pressure" came from anti-money laundery prevention laws.

I have a great recommendation for you - close all your accounts, move to a cave and preach people to abandon the idea of credit economy. And yes, south park did it.

No it didn't. A hard credit search is nothing to do with money laundering.

mcpitman

GingerBob wrote: »

You just don't get it, do you? And the previous poster and mcpitman as well. Talk about missing the point and not understanding an argument or point of view. Stroll on! Here it is in simpler terms, which hopefully you'll be able to get a grip of:
I haven't missed the point, but you are demonstrating your ignorance in an exemplary manner yourself.

I am well aware of how current accounts work, including, the so-called unplanned overdraft.
Clearly you do not uderstand, or you wouldn't still be banging on

I did not apply for an un-planned overdraft, nor any form of credit.
Yes you did, you applied for a current account.

The banks push this unwanted 'facility' for want of a better word onto all applicants, meaning they carry out a hard check when one is not needed.
No, the banks did not push anything on you, you asked them to perform the checks when you signed the T*C's of the account that you requested to have in place.

Banks can prevent unplanned overdrafts, but they don't, unless you go for a basic account.
Another sign of ignorance from someone who clearly has no idea how the modern banking world works.

With current accounts offering the best interest rates they are increasingly being used purely as investment vehicles, but the banks are disregarding this from the point of view of credit checking.
You are a clearly a sucker for marketing or misunderstand the need for businesses to gain new customers.

The point I was trying to make in my original post is that the current practice of carrying out a credit check on a current account with no formal overdraft facility is basically malpractice. That is my point of view. If you have an alterative point of view please put it forward - second thoughts - don't bother. I can guess at what you might have to say.
You tried but failed to open a thread on CRA bashing, other members have corrected your point of view because it is misguided and incorrect on many many levels, your argument is that the credit search is not required.

Sadly the facts are that the search is required and you are incorrect.

For the 3rd time in this thread, the simple solution for you GingerBob is to not deal with the CRA's and not deal with the banks, who dare to look after your money and/or give you a good return on it (how dare they, bar stewards).

GingerBob_3

mcpitman wrote: »

For the 3rd time in this thread, the simple solution for you GingerBob is to not deal with the CRA's and not deal with the banks, who dare to look after your money and/or give you a good return on it (how dare they, bar stewards).

Wrong again on just about everything, and you still haven't grasped the point of my original post. I won't repeat the argument again because I doubt it will sink in, however simplistically I try to explain it.


One last point, you would do well to remember that it's the customers that are doing the banks etc. a favour by generously putting business their way. The banks do no favours whatsoever to their customers. The privilege is all one way - they are privileged to have customers; it's no privilege to be a customer.

mrmagooooooo

A Current Account is a credit facility whether you like it or not. Banks run Credit Searches on these facilities for their own protection.

For instance. Dave gets his Salary Paid in to his account on Friday. The trouble is Dave was fired for unspeakable things in the office over a month ago. Obviously this is an error on the part of Daves former employer. Dave being the crazy guy he is proceeds to blow his unexpected windfall over the weekend spending the majority of the cash.

The money was transferred in to Dave's Account via BACS. This transaction can be reversed within 3 working days. Dave was paid £2000 but yet now on the Monday when his old employer released dave only has £3 left.

Once the reversal has taken place this leaves Dave £1997 in debt to the bank. An overdraft that was never agreed with the bank also known as an unauthorized overdraft.

There are multiple other ways to end up in a similar which i wont go in to but that it why a current account is credit checked.

If you don't like it don't use it. Easy :-)

GingerBob_3

mrmagooooooo wrote: »

A Current Account is a credit facility whether you like it or not. Banks run Credit Searches on these facilities for their own protection.

For instance. Dave gets his Salary Paid in to his account on Friday. The trouble is Dave was fired for unspeakable things in the office over a month ago. Obviously this is an error on the part of Daves former employer. Dave being the crazy guy he is proceeds to blow his unexpected windfall over the weekend spending the majority of the cash.

The money was transferred in to Dave's Account via BACS. This transaction can be reversed within 3 working days. Dave was paid £2000 but yet now on the Monday when his old employer released dave only has £3 left.

Once the reversal has taken place this leaves Dave £1997 in debt to the bank. An overdraft that was never agreed with the bank also known as an unauthorized overdraft.

There are multiple other ways to end up in a similar which i wont go in to but that it why a current account is credit checked.

If you don't like it don't use it. Easy :-)

Thanks for that. So if Dave - actually, let's call him 'Noddy' or 'Mr Plod' or 'Fireperson Sam', you choose - only had a basic bank account how would that work?

mcpitman

GingerBob wrote: »

Wrong again on just about everything.

Nope, not at all.:beer:

mrmagooooooo

GingerBob wrote: »

Thanks for that. So if Dave - actually, let's call him 'Noddy' or 'Mr Plod' or 'Fireperson Sam', you choose - only had a basic bank account how would that work?

It would work in exactly the same way. the bank would still be owed 2k by dave. But remember it's the government that forces banks to offer basic accounts. if not the banks wouldn't offer them. The bank however would have mitigated other risks by giving him a basic account with no offline spending on a card etc.

You have to understand that the banks must credit check a potential customer in order to quantify their risk.

Would you really want a basic bank account that you cant really do a lot with? no spending on planes or trains, no purchasing in Tesco if their line to the bank goes down.

The fact of the matter is you may not have an overdraft with your bank but if you didn't have enough money for a direct debit in your account, they would likely still pay it for you. they would charge you for going overdrawn but id personally prefer that instead of defaulting on a payment.

A basic account would just bounce it.

A Bank account is a credit facility whether you like it or not.

GingerBob_3

mrmagooooooo wrote: »

It would work in exactly the same way. the bank would still be owed 2k by dave. But remember it's the government that forces banks to offer basic accounts. if not the banks wouldn't offer them. The bank however would have mitigated other risks by giving him a basic account with no offline spending on a card etc.

You have to understand that the banks must credit check a potential customer in order to quantify their risk.

Would you really want a basic bank account that you cant really do a lot with? no spending on planes or trains, no purchasing in Tesco if their line to the bank goes down.

The fact of the matter is you may not have an overdraft with your bank but if you didn't have enough money for a direct debit in your account, they would likely still pay it for you. they would charge you for going overdrawn but id personally prefer that instead of defaulting on a payment.

A basic account would just bounce it.

A Bank account is a credit facility whether you like it or not.

Unfortunately you are confusing a credit facility with the case of someone owing money to someone else. And quite how a credit check would mitigate against the example you use is anyone's guess. Remember it's only a recent 'innovation' that credit checks were carried out on current accounts anyway.

mrmagooooooo

GingerBob wrote: »

Unfortunately you are confusing a credit facility with the case of someone owing money to someone else.

What you describe right there is a credit facility. Someone A owes money to Someone B

Someone B has in this case provided the credit facility to Someone A

And you can bet your bottom dollar that Someone B has done a Credit Check on Someone A before lending to them.

Same thing with the Bank. The customer my not intentionally aim to borrow from the bank but may find themselves in a position through no fault or fault of their own owing the bank money. The bank will want a good idea beforehand if the customer is likely to pay it back.

I don't understand why you cannot see this and clearly reading the posts nobody else can understand why you cannot see the need for a credit search either.

A credit check mitigates some risk in my example as if the bank found themselves in that position they would want to know the customer is likely to pay this back. A person with Defaults and CCJ's has already proven that they cannot manage their finances and as such is unlikely to pay back anything owed to the bank.

And lastly, Banks have been running credit checks on customers for at least the past 20 years.