A Bankers View, Open Letter To Martin Lewis And His Followers On Bank Charges.

rog2

Tim_L wrote: »

And anyway it may not be obvious the same day - a small accidental overdraft may only become apparent when checking transactions later.

Very true, Tim - I was in the habit of checking my business account on a daily basis, yet was told, after five years, that the balances I was given were only correct for the previous day. Branch staff told me that Direct Debits were processed automatically, including rejections, but would not show up, 'on their screen', until the following day.
Since there was no human input into the decision as to whether or not my direct debits were 'allowed to go through' I questioned the 'charge' of £28 for a megasecond of computer time. Still do.

Tootsie_Roll

Nathan_Spleen wrote: »

I'm struggling a bit with this. The banking industry makes enormous profits from the interest alone on current accounts. Money they make by not paying you interest when you're in the black and the high interest they charge when you are in the red. Either way they profit. It is only relatively recently that
they have sold other financial products and charged penalties to supplement current account income and before that they were still making money.

Another urban myth I'm afraid - the banks still have to hold money in reserve to give back to you when you want to withdraw it. Now some of your credit balance might be used to invest and indeed may earn them some interest, however when you balance that out against them processing transactions for you throughout the month for 'free' it still works out that they lose overall.

Banks have been cross selling products for as long as I have had an account - 25+ years.

Headieboy

Oh Bankergirl what a misguided life you live. I can only assume that it's because you are still quite young and don't have a full appreciation of lifes struggles as yet.

On Monday I received a letter telling me that one of my direct debits would be taken off on the 11th (Tuesday). As I didn't get home until after 17:00 (and read the letter) I could not go to the bank to lodge funds. The result was that at 00:01 on Tuesday my account went over my agreed overdraft by £3.25. Cash was paid into my account at approx 09:00 bringing me well with within my agreed overdraft. Yesterday I received a letter from my bank (HBoS) stating that I would be charged £35 for exceeding my overdraft and a further £28 per month for an unauthorised overdraft. Total charges for exceeding overdraft for less than 10 hours = £63! I'll let someone smarter than myself work out the APR on that one!

I don't have a problem with bank charges, just the amount of the cahrges. This is the crux of the problem. The charges levied do not represent a true and accurate cost to the bank.

PS I also work in a customer facing industry and I always speak to the person on the phone or face to face with the same respect I'd like to be shown. As you say, it's not them who have taken the money.

bathgatebuyer

BANKER_GIRL wrote: »

So our charges are meant to act simply as a deterrent. And for close to 80% of customers this is highly successful.

And silly old me thought they were 'administration charges'

If being misguided means that we are educated about finance, aware of our debts, aware of safeguarding our financial and personal futures, aware of the law that affects us as consumers and customers, then I fail to see how this makes us 'miguided souls' as Super Aly the oh-so-knowledgable-21 year old with 7 months experience in a bank.

I would call it rather empowering really. If only more people were educated enough about finance and how to manage it, the 'credit crisis' might be in a much better state.

Ooooh, Martin, you don't half like to get under the skins of these banks! :money:

Nathan_Spleen

Tootsie_Roll wrote: »

Another urban myth I'm afraid - the banks still have to hold money in reserve to give back to you when you want to withdraw it. Now some of your credit balance might be used to invest and indeed may earn them some interest, however when you balance that out against them processing transactions for you throughout the month for 'free' it still works out that they lose overall. .

My head is in my hands..

minieri

Quote:
So our charges are meant to act simply as a deterrent. And for close to 80% of customers this is highly successful.

Let me give you an example of the behaviour of one of the leading high street banks where my husband and I have had accounts since 1963

We had personal accounts (current and savings) and business account.

One day I rang the account manager, spoke to him personally, and explained that a mortgage cheque I had issued had gone astray (according to the mortgage company) and that I needed to stop the cheque and that no replacement had been issued as I had paid by debit card. Fine says he, cheque cancelled.

At that time (about 10 years ago) we did not have daily access to our accounts via the internet but discovered a week later that:

a

angelflower_2

Tim_L wrote: »

And can you explain how to put cleared funds in a bank account the same day when CHAPS is unreliable and costs pretty much same as the charge, and BACs takes 4 working days? £25 to move funds around in one day electronically? You're having a laugh.

And anyway it may not be obvious the same day - a small accidental overdraft may only become apparent when checking transactions later.

Something similar has just happened to me in regards to same day transactions....having just lost my job and not having enough savings to take me through to this stage, I sold loads to make my latest mortgage payment. I put this into my bank on the day it was due but it bounced. Bang, £39 charge. Only with the post being slow at the moment, I didnt realise until they had put the charge on the account, the mortgage company had represented but there wasnt enough to cover it, bang another £39 charge. Was also charged £31 on each occasion from my morgage company so for one transaction, I am £160 down and on benefits you tell me how I am meant to get back on top of things!!!!!!:eek:

Yes, I know if i bounce a dd then i will be charged and i do accept the charge but it must be proportionate to banks/company's outlay in processing the same.

I for one hope that the test case is successful in lowering charges to proportionate costs and that people who have been charged over the last 6 years are automatically refunded the difference. :T

minieri

Quote:
So our charges are meant to act simply as a deterrent. And for close to 80% of customers this is highly successful.


ATTENTION BANKER GIRL

Let me give you an example of the behaviour of one of the leading high street banks where my husband and I have had accounts since 1963

We had personal accounts (current and savings) and business account.

One day I rang the account manager, spoke to him personally, and explained that a mortgage cheque I had issued had gone astray (according to the mortgage company) and that I needed to stop the cheque and that no replacement had been issued as I had paid by debit card. Fine says he, cheque cancelled.

At that time (about 10 years ago) we did not have daily access to our accounts via the internet but discovered a week later that:


a - the 'lost' cheque had miraculously appeared and HAD BEEN PAID

b - however, the account did not have anywhere near sufficient funds so a charge was made.

c - said account manager then decided to rectify the problem himself by transferring funds out of the business account - WITHOUT AUTHORITY - to cover the overdraft in the personal account.

d - result, three direct debits and two cheques bounced in the business account - all of which were charged doubly, first for bouncing and secondly for increasing the overdraft caused by the account manager.

All in all this cost us hundred of pounds - literally - and what happened when I complained - "please put your complaint in writing". When I did the letter was ignored. Second letter by recorded delivery ignored. Fax ignored. Finally some four weeks later went into the branch on a Monday morning only to be told the guy concerned had been moved the previous Friday and there was no record of the problem.

Needless to say this was never resolved to my satisfaction - only to the bank's.

Now I know I must need my head examining but it took us another 8 years before we finally moved accounts.

Perhaps BANKER GIRL would care to let me have the benefit of her wide experience on where I went wrong!!!

YorkshireBoy

minieri wrote: »

Perhaps BANKER GIRL would care to let me have the benefit of her wide experience on where I went wrong!!!

I'm not "BANKER GIRL" but the answer is simple.

With that level of incompetence, and the evidence you have amassed, why on earth didn't you go to the Financial Ombudsman?

howmuchcaniget

MSE_Martin wrote: »

Addendum

I just read this bit and it sunk in
You call them misguided! Frankly your comments show more ignorance than that which you accuse your customers of. I had given you the benefit of the doubt; there are many who rationally argue against bank charges reclaiming and while I disagree I follow their logic.

Yet this particular comment and generalisation is pitiful; this site is all about taking responsibility, action and knowledge. Go do your research find out what this site does; then go look at your bank's balance sheet. Shame on you. I wish I hadn't done you the courtesy of spending my time composing a response; I had hoped to help educate you to the real situation; but now I suspect I'm wasting my time.

Hear Hear.. I also work for one of the 'big 4' and I completely disagree with 'Banker'. I love my job and have helped many people over the years but I do not agree that the amount of the charges levied by the banks for returned payments etc does not reflect the true cost to the bank for doing so.

This site has been fantastic for us as a family in that we budget better and are more aware of our consumer rights. The advice given is supportive when needed and constructive. We now know where to shop for the best deals, we visit the cinema for free, and generally make the little cash we have work a damn site harder than it did before we heard of it.

Your employer is definately feeding you the company line ... it's in their interest that you believe it otherwise you would be handing out far too many charge reversals and that is not what they want - it impacts profits then.

Take Martin's advice and educate yourself... read some of the threads and maybe, just maybe you will join the real world with the real people. They are the ones that need help when in trouble, not criticism.