Lloyds, Halifax and Bank of Scotland to charge up to 49.9% interest on overdrafts from April - MSE

JuicyJesus

Consumerist wrote: »

The banks have known for more than a year what the regulator had in mind for overdraft charges in general. In the full knowledge of the regulator's intention, Lloyds increased their overdraft charges for smaller overdrafts.

Can you explain how else Lloyds (or indeed, any banks) are supposed to make money on providing free current accounts given that nobody wants to be sold to, everyone resents paying money to banks for literally anything and the whole settlement was supposed to be that overdraft users subsidised free banking for everyone else?

Consumerist

JuicyJesus wrote: »

Can you explain how else Lloyds (or indeed, any banks) are supposed to make money on providing free current accounts given that nobody wants to be sold to, everyone resents paying money to banks for literally anything and the whole settlement was supposed to be that overdraft users subsidised free banking for everyone else?

Stop lying about providing "free" banking.

JuicyJesus

Consumerist wrote: »

Stop lying about providing "free" banking.

OK, charge for banking services. Fine by me, good luck selling it to everyone who (as noted) actively resents paying for banking services.

EarthBoy

Consumerist wrote: »

Stop lying about providing "free" banking.

It is free to those of us who don't pay anything, and never have done. It's very expensive for those who live permanently in their overdrafts, but I'm very happy with that. Don't use an overdraft if you don't want to pay.

abz88

eskbanker wrote: »

The process of switching is easy for those who have access to a new account, but those living in overdrafts are naturally less likely to be accepted for new accounts, or may not be offered new overdrafts with them.

No basic accounts do, it's what makes them basic.

But those who are heavily indebted to LBG (or any other bank) are the least able to do anything about it, so I was challenging your contention that high charges can reasonably be seen as a deterrent, when in many cases they'll simply be exacerbating an existing problem.

I partially agree with you, however, there needs to be some form of responsibility on individuals in a lot (granted not all) of these situations. While those living in overdrafts may find it hard to switch, when it became apparent that they were going to be living out of or regularly dipping into an overdraft, they should have looked at moving away from LBG at that point.

There are a lot of posters on these forums that feel they are entitled to overdrafts/specific credit limits/specific accounts (the HSBC Advance account being a prime example) and are unhappy when they have to pay to use them or are refused credit/current accounts.

JuicyJesus

abz88 wrote: »

I partially agree with you, however, there needs to be some form of responsibility on individuals in a lot (granted not all) of these situations.

There is also a responsibility on the bank to help someone who is in a debt crisis, which a large hardcore overdraft would all but certainly constitute. Not morally even, as a matter of regulation.

abz88

Consumerist wrote: »

Stop lying about providing "free" banking.

In what way was JuicyJesus lying? Banking is "free" unless you chose an account with a monthly fee for additional services or go into your overdraft (which is effectively borrowing money and incurring interest). Paying interest on what is effectively a loan is different from paying for banking.

Socajam

JuicyJesus wrote: »

There is also a responsibility on the bank to help someone who is in a debt crisis, which a large hardcore overdraft would all but certainly constitute. Not morally even, as a matter of regulation.

If you and others like you want to live on other people's money for free, it's not going to happen.
Start by determining what is a "want" and what is a "need" and learn to live within your means.
The bank owes you nothing if you are not responsible enough to ensure that you do not use its overdraft.

abz88

JuicyJesus wrote: »

There is also a responsibility on the bank to help someone who is in a debt crisis, which a large hardcore overdraft would all but certainly constitute. Not morally even, as a matter of regulation.

Having an obligation to help someone in debt crisis is not the same as an obligation to give everyone free or cheap overdrafts. As I went on to state, when it becomes clear that you are heading into overdraft territory there are plenty of cheaper overdraft accounts to move to before you reach that stage.

eskbanker

abz88 wrote: »

I partially agree with you, however, there needs to be some form of responsibility on individuals in a lot (granted not all) of these situations. While those living in overdrafts may find it hard to switch, when it became apparent that they were going to be living out of or regularly dipping into an overdraft, they should have looked at moving away from LBG at that point.

There are a lot of posters on these forums that feel they are entitled to overdrafts/specific credit limits/specific accounts (the HSBC Advance account being a prime example) and are unhappy when they have to pay to use them or are refused credit/current accounts.

Likewise I'm not disputing most of what you're posting, but two wrongs don't make a right! In other words, yes, there are undoubtedly issues of entitlement and personal responsibility, but that doesn't mean that LBG pricing policy is reasonable, so the point I was making was that your and Consumerist's earlier posts weren't mutually exclusive....