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

nickmack

Phaelok wrote: »

Well if I was speaking to you the day that happened I would have refunded/waived any charges as a result of that. But if this is a miscalculation on your part, which we all make, should we not accept that if it happens again the bank(s) have aided us in the past?

Why should customers be restricted to a banks 'good will' if they believe the charges have been made unlawfully?

The bank are not obliged to pay that transaction, even though you were only 5p short? Does it sound ludicrous? Of course, but if you are helped the first time to resolve this then surely it should not happen again.

Sometimes these things spiral. Admittedly, some customers could manage their accounts better. For some though, if finances are tight, one charge can have a huge knock on effect and cause further charges. In effect, the customer isn't just penalised for one miscalculation, but are punished again and again.

Its like me going to the same supermarket every Friday for 10 years where I know all the staff. If I was 5p short to pay for a particular item would they let me get away with it? NO! You either have the full money to pay for the goods or you don't. The same is true of the bank.

But do the supermarket prevent you leaving until you have paid a charge for considering whether to let you off the 5p? This is a more accurate analogy.

In terms of the level of charge I accept this must be reviewed, however people will STILL complain if the charge was reduced significantly. People, quite rightly, will question the cost involved but will always complain if they are charged.

I'm not sure I agree, no one I know of argues that a nominal charge shouldn't be made, but it's widely believed this is a fine designed purely to boost profits. That's what really seems to grate on people. Who are the bank to issue fines?

The example of a hotdog at a cinema comes to mind. £4+ ish for what? a hotdog in a bun with ketchup? Outrage! Whats the cost involved for making that? Should I write to the OFT to claim back the money I've invested in hotdogs? You either buy it or you don't. With bank's you either accept the responsibility involved by setting up regular payments or a standard account which dosent have such facilities.

The Hot Dog analogy unfortunately doesn't bear any relation to bank charges. What they are providing is a genuine product/service, if you don't like the price you don't buy. I do not believe the banks are not providing a service in considering whether to pay a transaction. The two are totally different.

Phaelok

nickmack wrote: »

Why should customers be restricted to a banks 'good will' if they believe the charges have been made unlawfully?



'Sometimes these things spiral. Admittedly, some customers could manage their accounts better. For some though, if finances are tight, one charge can have a huge knock on effect and cause further charges. In effect, the customer isn't just penalised for one miscalculation, but are punished again and again.'

But the point I am making is that IF the bank brought that instance to a conclusion, i.e. all charges waived/refunded, there should be no need for one to be punished again and again. Rather than comes around as a result of one not heeding the bank's advice...

rog2

Phaelok wrote: »

The example of a hotdog at a cinema comes to mind. £4+ ish for what? a hotdog in a bun with ketchup? Outrage! Whats the cost involved for making that? Should I write to the OFT to claim back the money I've invested in hotdogs? You either buy it or you don't. With bank's you either accept the responsibility involved by setting up regular payments or a standard account which dosent have such facilities.

Not quite true, Phaelock - with the hotdog, you have a choice of whether you buy it or not. With Bank Charges the element of choice simply does not exist.

Banks see customers who have problems, whether of their own making or not, simply as potential profit - there is more profit to be made out of a customer who goes £5 over his limit every other month, than there is to be made out of the 'perfect' customer, who always keeps sufficient money in their account to avoid penalty charges.

Before the Trolls jump in, I am not against the imposition of a charge for deliberately going against the conditions that the account holder has agreed when opening the account. I am, however, against the Banks' apparent 'right' to impose charges that may be 'unlawful' and are certainly 'disproportionate'.

Phaelok

'With Bank Charges the element of choice simply does not exist.'

Wrong - if you, for example, called me up on the day that you were over I would discuss with you to return this direct debits as unpaid (without charge) which can be done as often as you wish. OR as a ONE OFF to pay these items, assuming they were not paid, providing you put cleared funds in the account that day.

The choice does exist, it again comes down to customer ownership....

Tim_L

If the banks did what the shop did, everything would be fine. But what they actually do is to allow you to carry the item through the checkout, then charge you between £25 and £60 for the privilege, without giving you the option of not carrying it through.

It's an absurd comparison really. There are no end of these silly analogies put forward - usually about this point in the discussion someone suggests that parking fines could be treated the same way as bank charges, which is patently ridiculous. Of course people can charge £4 for a hotdog, as they can charge for any goods or services, and that's why banks are trying to pretend penalty charges are 'service fees'. There is no service here. The banks are in no more risk of default if someone is £10 inside or £10 outside their agreed limit. There are no serial credit checks to pay for. There is no dedicated infrastructure to pay for. There is no reason for the payments except to make money for the bank. They are penalties, and penalties are unlawful in civil contracts. END OF.

Financial transactions are complex. Payments can come out at any time, in any order, and even the most disciplined will lose track of one or two. I get tired of the constant harping on about 'personal responsibility'. Responsibility can be manifested in ways other than knowing to the penny what is in your account at any given time and never making a mistake.

rog2

Phaelok wrote: »

'With Bank Charges the element of choice simply does not exist.'

Wrong - if you, for example, called me up on the day that you were over I would discuss with you to return this direct debits as unpaid (without charge) which can be done as often as you wish. OR as a ONE OFF to pay these items, assuming they were not paid, providing you put cleared funds in the account that day.

The choice does exist, it again comes down to customer ownership....

Simply not my experience of Banks, and how they ran my accounts, Phaelok. It was always my experience that the Bank would impose charges before informing me of any problem - and a £28 charge for not paying a £12 direct debit, when there were funds waiting to be cleared, quite frankly beggars belief.

Nathan_Spleen

Tootsie_Roll wrote: »

It is mistakenly assumed that banks make money from offering currect accounts - they don't. Free current accounts are a loss leader designed purely to attract customers in the front door.

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.

nickmack

Phaelok wrote: »

But the point I am making is that IF the bank brought that instance to a conclusion, i.e. all charges waived/refunded, there should be no need for one to be punished again and again. Rather than comes around as a result of one not heeding the bank's advice...

I'm not sure I follow Phaelok. The banks should not need to waive these charges because customers shouldn't be 'punished' in the first place.

However much it annoys some people, even if someone deliberately mis-manages their account, they should not incur penalty charges because the bank decide to fine customers to boost profits. If as widely believed these are pure penalties, they are not enforceable.

You can't have private companies just going around 'punishing' customers as they see fit. In the case of banks, it's even worse, as the customer doesn't get an invoice and a choice, the charge is just taken from the account.

Tim_L

Phaelok wrote: »

'With Bank Charges the element of choice simply does not exist.'

Wrong - if you, for example, called me up on the day that you were over I would discuss with you to return this direct debits as unpaid (without charge) which can be done as often as you wish. OR as a ONE OFF to pay these items, assuming they were not paid, providing you put cleared funds in the account that day.

The choice does exist, it again comes down to customer ownership....

This has to be the funniest statement I have ever seen on this subject.

DDs are done automatically. It's actually pretty difficult to stop one days in advance, let alone on the day of the payment. On the occasions I have spoken to customer services about potential problems, I have received precisely zero help - the "computer says no". And it's really not surprising given the contemptuous attitude towards customers displayed here by people I assume work in banks.

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.

WestonDave

Tim - simple answer - leave enough in there to cover what might be coming up. A £100 buffer left in your account would only earn £5 a year if held on deposit elsewhere.