I have an opinion that is slightly contraversial... I hope you can change it

lazy&indebt

It's to do with the credit crunch. I've been thinking that maybe the reason lenders have started to become VERY strict on who they lend money to is partly to do with everyone going and claiming back their bank charges and late payment charges and now, PPI.

I hope I'm wrong, and I hope someone can put me straight (I don't want to start an argument) it just seems that although everyone thinks banks and lenders are evil, they ARE important and they DO need to make money in order to be there in the first place and if people keep claiming money from them, they are bound to get very selective about who they lend money to.

Banks stop lending to people, people can't afford to buy things (from small purchases on the hight street right up to property!) businesses stop making as much money, we head into a recession and people loose their jobs.

Please can someone put me straight on this?

Snaggles

The credit crunch is probably more to do with the threat of recession I think (which appears to me to stem from the problems with the US sub-prime mortgage market from the news reports I have seen ), although I'm not very knowledgeable on the subject. But the other charges (bank account fees, overdraft arrangement fees etc) that banks are either introducing or increasing are probably a direct result of the reclaiming.

lazy&indebt

Thank you snaggles.

So, do you think that while reclaiming your bank charges etc is good for the individual, it has had a bad knock-on effect for everyone else?

rayday2

The world does have a huge threat of recession, the American government are buying billions of dollars to try to keep there markets afloat. This is the problem at the moment and it does impact us all. I am not too sure if it is a recession I go one step further and think after this there is going to be a big rethink of credit. I hope our children will not have so much available when they grow up.

Several nations are now proving with the monetary problems that a lot of humans cannot cope with having readily available credit.

Maybe it is just my wishful thinking that we will all learn lessons and borrow more responsibly and in our means!

Snaggles

lazy&indebt wrote: »

Thank you snaggles.

So, do you think that while reclaiming your bank charges etc is good for the individual, it has had a bad knock-on effect for everyone else?

True in part I think, however, if the banks have been levying unlawful charges (which is still under discussion, I know), then even though I haven't ever had a bank charge, and will probably therefore fall into the 'penalised because others have reclaimed' camp, I do support peoples' right to reclaim.

Does that make sense?

lazy&indebt

Hi Rayday, thanks for your input.

So, do you think that people who have borrowed irresponsibly and miss payments, and then get away with claiming back any charges AND cutting their debt down by 'up to 75%' may have had a negative effect on the people who haven't borrowed irresponsibly?

lazy&indebt

Snaggles wrote: »

True in part I think, however, if the banks have been levying unlawful charges (which is still under discussion, I know), then even though I haven't ever had a bank charge, and will probably therefore fall into the 'penalised because others have reclaimed' camp, I do support peoples' right to reclaim.

Does that make sense?

Yes, it makes sense.

I think maybe every case is different? I heard about one woman who didn't realise she'd gone over her overdraft whilst shopping in Asda and she got a bank charge for every single item she paid for in one go! That is shocking, think it was a few grand! I think that's totally unfair.

Do you think maybe if someone decides to claim back charges etc that it should show on their credit report so a lender knows that they have tried to reclaim them in the past?

rayday2

lazy&indebt wrote: »

Hi Rayday, thanks for your input.

So, do you think that people who have borrowed irresponsibly and miss payments, and then get away with claiming back any charges AND cutting their debt down by 'up to 75%' may have had a negative effect on the people who haven't borrowed irresponsibly?

Thats a toughie and kind of two sided argument thing. I do think they impact to a certain extent (me included but I will pay back every penny!) but I do think there should be more "responsible" lending in the first place and better education in the classroom.

But to be honest when you are in the difficulties like I was, financial companies make a fortune off you, so you pay back into the system for example my mortgage is currently sub prime - and I pay nearly 10% and I have a secured loan which is 10.8% so that is going back into the system.

If you take the provident type companies with apr's of 183% + then you can see that actually those that over stretch themselves probably before they got to a point of stopping the cycle and having IVA, bankrupcy or DMPs helped the profits.

I probably have made no sense and offended everyone!

Gemmzie

The economy in this country is built on a house of cards. People spend fake money, companies make fake profit - it's all on credit and that can't continue forever.

southernscouser

lazy&indebt wrote: »

Hi Rayday, thanks for your input.

So, do you think that people who have borrowed irresponsibly and miss payments, and then get away with claiming back any charges AND cutting their debt down by 'up to 75%' may have had a negative effect on the people who haven't borrowed irresponsibly?

Correct me if I'm wrong but I think you're looking at it the wrong way. :undecided

Yeah sure people are reckless with spending then get charged (I was one of them), but when they reclaim, they are only reclaiming what was taken from them. Alot of people (not accusing you) have a mindset that all the claimers are getting money for nothing. They aren't. They are just taking back what was theirs in the first place.


As for is it having an affect then no I personally don't think it is. Banks make ridiculous amounts of profit. Rightly or wrongly they can afford to lose this extra profit.

But my understanding is that the credit crunch is due to the costs that banks have to pay for borrowing from each other aswell as/because of the dodgy US mortgage markets and general US economy.

I think.

Snaggles

lazy&indebt wrote: »

I think maybe every case is different? I heard about one woman who didn't realise she'd gone over her overdraft whilst shopping in Asda and she got a bank charge for every single item she paid for in one go! That is shocking, think it was a few grand! I think that's totally unfair.

I think that one is an urban myth, because unless she paid for every single item seperately, the bank don't know what she has bought, they only see the amount of the actual transaction. But the charges can mount up pretty quickly, and you can easily end up in a downward spiral of exceeding your overdraft, getting charges, not being able to afford the charges so exceeding again, getting more charges.....etc.

Do you think maybe if someone decides to claim back charges etc that it should show on their credit report so a lender knows that they have tried to reclaim them in the past?

It will show that they have missed payments etc for 6 years anyway, so personally I think that's enough. The banks themselves will keep a record though.