Why a bank charges win doesn’t mean the end of ‘free banking’ blog discussion

Phoenixx73

I would think the governemnt would support this as it could only help the economy as a whole. but then sound bytes and quick, ineffective fixes seem to be the order of the day these days

Smasher

Mark7799 wrote: »

But we are not talking of being mathematical geniuses here - all is needed is the knowledge to add up and take away - and be in control of your finances - not letting others control them for you. Do you really think that is a bad idea?

Its not a bad idea at all Mark, but who can remember everything they spend? Do you make a note of every time you buy petrol, get cash out to go to the pub e.t.c. I know of NOBODY who does this! There would be no issue whatsoever if banks simply refused to pay transactions where there are insufficient funds. In this day & age, everything is instant. The credit card terminals & ATMs are linked electronically to the bank for god sake, there is no reason why your account can't be checked for funds at the point of sale..

bengal-stripe

Smasher wrote: »

... who can remember everything they spend? Do you make a note of every time you buy petrol, get cash out to go to the pub e.t.c. I know of NOBODY who does this!

Well, all these transactions give you a receipt.
Just keep them, add them up at night and subtract that sum from the balance.
Treat every transaction as having left the account instantly.

Easy!

Dylanwing

A couple of questions-
Are the excessive penalty fees really subsidising current accounts, or are they just a cash-cow to boost Bank profits?
If they are covering the cost of current account Banking, why should a minority of customers subsidise free banking for the majority?
I just cannot understand the argument justifying excessive fees just because it might end free banking. A customer going over limit does not affect any other customer, so as long as the fee represents the true cost to the Bank what is the problem? Why should that person also pay a hefty 'fine', allegedly so that all other customers can have a free service? So tell me, if I exceed my limit, why should I not just pay the Banks marginal costs in deling with the excess, why should I also pay for YOUR Banking services?

a11waysindebt

The bank as you know is a massive structure,I wouldn't even like to think of the running costs involved.The oft should have gone in with several issues of defence for the charges.Instead of what I believe is one.

Mark7799

bengal-stripe wrote: »

Well, all these transactions give you a receipt.
Just keep them, add them up at night and subtract that sum from the balance.
Treat every transaction as having left the account instantly.

Easy!

Agreed - you will get a debit/card receipt for each transaction (unless you use an ATM that has run out) and as bengal says, use these to guide you.

WestonDave

Going back to Phoenixx's point. There is a pilot scheme being run via the Institute of Chartered Accountants which seeks to partner accountants who see this education as a vital need with headteachers/schools who want to do something about it but lack the resources/confidence or whatever in a form of mentoring scheme. As yet it is relatively low key but I understand it is being opened out. Part of the problem is that accountants who know how this stuff works aren't qualified or skilled to teach it so its not just as simple as finding a friendly local accountant and sticking them at the front of the class. But if teachers don't understand this stuff either, getting them to teach the subject could simply end up with the blind leading the blind. Strange coincidence this question being asked this morning as I was thinking on the way into work I must see if I can find out more about this scheme!

sirsquack

I work for one of the major high street banks and I am so sick and tired of people moaning about charges. As far as I know we are not one of the worst offenders either.
To say that banks will not start charging if they loose the case in my opinion is very unlikely, and I also believe in the long run the customer will loose out because of this. Last year if we had charged no fees for going overdrawn without authorization but everyone had been on the fee paying account we already offer we would have made a huge loss (i forget the exact figure). This to me only suggests that if overdraft fees do get removed, a standard fee will get introduced to EVERY account, perhaps even a 'pay as you go' system where by people doing things banks don't generally like, e.g. dealing in cash, using branch services etc (i.e the things that cost them most money) will get charged per transaction. I don't want to give away who i work for but there is already something bordering on this that has sneaked into the system.
To make everyone pay for their banking to me seems like an unfair punishment to those who do actually manage their finances and not spend what they don't have. In this day and age it is far to easy for people to spend what they cannot afford and then blame it on the creditor. I cannot understand though why people cannot just accept what their income is and if they can't afford some of life's luxuries on it then deal with it. There are lots of things I'd love to go out and buy but can't afford. Do i just stick it on credit willy nilly, do I hell. It makes my stomach churn when i see these debt shows on tv with people my age (20s) in debts of £20K + all unsecured and in the majority of cases purely because they saw, they wanted, they stuck it on credit.
To blame the bank for letting them go over to me is ludicrous, if the shoe was on the other foot, you were stranded somewhere in the middle of no where and desperately needed cash but were bang on your limit and and could not get any you would be pretty !!!!ed off. People just need to learn to budget and to take better care of their money. You cannot blame banks for you spending money you do not have to spend. With internet and telephone banking there should be no excuse for not knowing what is in your account and how much you have to spend. I try to check my account at least a couple of times a week and i keep a spreadsheet of what I have going out so even if something hasn't physically left my account yet I know exactly where i'll stand when it does. This is hardly a great effort either, a couple of minutes in a evening to check on the days spending and type it in a spreadsheet isn't exactly demanding.
I don't want to say its easy cos i know it always isn't, nobody is perfect and there is always those unplanned bills and expenses that pop up from time to time. Believe me i have had times where i have been really struggling waiting for the next pay cheque but unauthorized borrowing will only make matters worse, there is ALWAYS a better answer, but sadly many people are to lazy to look for it. If you keep a careful eye on your finances you will have fair warning if something is looking a bit worrying on the horizon and in many cases a quick call to the bank and a temporary overdraft limit increase can prevent unnecessary charges.
In my experience those customers who keep getting excessively charged have no one to blame but themselves. I have never seen a case where someone has just slipped over and immediately had a charge slapped on. It is always those who keep on doing it. If people are struggling they need to speak to the bank before it gets to that stage, as much as people think banks don't care and just want to take your money at the end of the day if you continue to be in serious debt it will eventually get written off as 'bad debt' go to a collection agency and in all likelihood the bank looses money and a customer. Sure banks are nobodies best friend, at the end of the day they are there to make money for their share holders but they cannot do that without loyal customers and in most cases will work hard to help people as long as they are willing to help themselves.

Smasher

sirsquack wrote: »

I work for one of the major high street banks and I am so sick and tired of people moaning about charges. As far as I know we are not one of the worst offenders either.
To say that banks will not start charging if they loose the case in my opinion is very unlikely, and I also believe in the long run the customer will loose out because of this. Last year if we had charged no fees for going overdrawn without authorization but everyone had been on the fee paying account we already offer we would have made a huge loss (i forget the exact figure). This to me only suggests that if overdraft fees do get removed, a standard fee will get introduced to EVERY account

So this confirms that your employers were indeed lying to the courts when they said that the charges were to cover their admin costs?

Are you saying you saw these figures? How were they presented?

mystic_trev

If you’ve never had a charge, no change is even more likely. The well-managed account holders who the spin says “will lose out” are actually, if anyone were to lose out, the least likely to. That’s because they’re the ones the banks want the most.

Quite right, and and those that have poorly managed their accounts will be considered as 'bad risk' hence having to pay for Banking services.