Bank Charges: Fine v Payout Poll

MSE_MartinMSE_Martin MoneySaving Expert
8.3K Posts
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Bank Charges Poll: Fine v Payout.

During the Bank Charges Test Case HBOS’s lawyer said customers prefer a payment to be made even if it means a bank charges them a fee. The Office of Fair Trading disagreed, saying it believes customers would prefer the payment not to be made, giving them a chance to make alternative arrangements.

If you had paid for something – whether a £1 bag of carrots – or your monthly mortgage payment – which took you beyond your overdraft limit without realising, would you prefer:

A. You’re fined £35. The payment is made. 8% (532 votes)
B. No fine. The payment is unpaid/refused. You need to pay another way. 92% (5899 votes)

Total Votes: 6431

Vote here, or click reply to discuss below.

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PS. There was another similar poll that I restarted after a day (all the 500 votes made were deleted to make it fair) as that was overwhelmingly (98%) in favour of option B, but I decided my drafting of the question had pushed people towards that.
Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
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Replies

  • The trouble is it's often not an either/or scenario: a bank might refuse the payment AND fine the customer.
    Lloyds TSB have recently changed their charges and introduced measures supposed to enable account holders to avoid such fines. One such measure is a "grace period" whereby if you exceed your limit but pay enough money into your account by 3pm the same working day, you won't be fined. What they don't tell you is that they might just decide to refuse a £4 unauthorised overdraft (even if similar transactions have been allowed in the past) and fine you anyway! Though of course it's in the small print that they're allowed to do so with no set rules about when they will or won't, I consider it most unfair that customers are being misled into thinking we're protected by a small safety net when in fact it's being used to catch us out.
  • MSE_MartinMSE_Martin MoneySaving Expert
    8.3K Posts
    Forumite
    The trouble is it's often not an either/or scenario: a bank might refuse the payment AND fine the customer.
    Lloyds TSB have recently changed their charges and introduced measures supposed to enable account holders to avoid such fines. One such measure is a "grace period" whereby if you exceed your limit but pay enough money into your account by 3pm the same working day, you won't be fined. What they don't tell you is that they might just decide to refuse a £4 unauthorised overdraft (even if similar transactions have been allowed in the past) and fine you anyway! Though of course it's in the small print that they're allowed to do so with no set rules about when they will or won't, I consider it most unfair that customers are being misled into thinking we're protected by a small safety net when in fact it's being used to catch us out.


    True - but this is one of preference - as debated in the Bank Charges Trial. If there were a choice which would you prefer?
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • icefallicefall Forumite
    1.1K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Forumite
    I would prefer the payment unpaid with no fines if that happened

    Its obvious the banks would prefer to charge £40 fine, but to say customers would prefer that is pushing it a bit isn't it?? I know I definitely do not prefer that.

    Glad you posted this, makes you wonder exactly what else the bank are assuming about what their customer wants without asking said customer...

    Also I have a bone to pick with direct debits - wherever possible I set up standing orders so I can vary the amount I pay due to what is coming in (different pay dates due to Xmas for example).

    But I also have quite a few DD coming out each month and with direct debits there is no choice to vary the amount/date of the month (say you want to vary it to a different date for one month and then change it back the next month) and now DD have taken over, lots of companies say they will not take payment via standing order.

    DD takes control away from the customer and hands it to the companies and bank. If they made DD more flexible I would be more happy with it as opposed to standing order as its a good principle in theory and works most of the time.
    I always wanted to be a procrastinator, never got round to it...
  • teddycoteddyco Forumite
    397 Posts
    Part of the Furniture Combo Breaker
    I think the current over-draft system is silly! Our banks have the technology to decline debit card payments instantly, but they allow folks to go into arrears and then charge them interest and penalties.

    Yeah, I agree it should be changed.

    Also, stop banks from holding my money and earning interest on it when I initiate a transfer into another account. There isn't any reason why that money should not post immediately or at least within 1 working day. Electronic transfers are still taking 3 business days to post and that's not good enough.

    It's called 'float time' and banks and large corporations have been doing it for years and making a lot of money using your money while you waited.

    Adam Smith was a proponent of regulated banking and so am I!
  • Slugging people with fines for overdrawing their account is punishing the people who can least afford it. It definitely shouldn't be allowed.

    The slow bank transfers thing is equally confusing. I'm from Australia and transfers their are overnight or instant if you are transferring to another account in the same bank.
    I like my Money For Nothing. =)
  • GemmzieGemmzie Forumite
    14.9K Posts
    I would rather it bounce. But would a lot of people who aren't savvy enough to use this site and vote?
    No longer using this account for new posts from 2013
  • In France, I believe it's a criminal offence to write a cheque without having the cleared funds in your account.
    We shall not allow the fear of going mad to make us keep the banner of imagination at half-mast.
  • IF banks went down the road of declining ALL transactions due to insufficient funds - even when the customer is short by just a few pennies...

    Just wondered how people would feel if the direct debit for their mortgage or credit card failed...thus incurring penalties from said departments???

    Granted, the late payment charge for defaulting on a credit card is only £12 (compared to £25 -£35 for a failed direct debit), however, their are further implications such as ones credit rating being adversley affected.

    Comments please...
  • P.S. can you honestly say you would not be the slightest bit embarassed if you had a transacion declined due to insufficient funds...im sure when it came down to it, many of you would rather risk the wrath of your bank than get to the front of the checkout with a trolley full of shopping...only to be told "transaction failed, insufficient funds"
    How would you feel if this happened if you were with friends / colleagues / peers at the time?
  • icefall wrote: »

    DD takes control away from the customer and hands it to the companies and bank. If they made DD more flexible I would be more happy with it as opposed to standing order as its a good principle in theory and works most of the time.


    Apologies for going off topic, however, just have to point out that a direct debit has nothing to do with banks (unless its to pay for a banking product) this is a seperate agreement between the customer and the company.

    If you have a product or service (ie mobile phone) it SHOULD be down to the company to ensure the bill gets paid and not for the customer to decide to pay a little this week and a little next week...the company are entitled to some assurances otherwise you would just be on another thread on this website having a moan when your phone company disconnects you for non-payment!
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