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  • FIRST POST
    • MSE Guy
    • By MSE Guy 17th Feb 10, 10:09 AM
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    MSE Guy
    MSE News: Call for banks to help financially excluded
    • #1
    • 17th Feb 10, 10:09 AM
    MSE News: Call for banks to help financially excluded 17th Feb 10 at 10:09 AM
    This is the discussion thread for the following MSE News Story:

    "A coalition of charities and community groups today calls for increased access to financial services for millions ..."


Page 1
    • Lokolo
    • By Lokolo 17th Feb 10, 10:29 AM
    • 20,216 Posts
    • 15,399 Thanks
    Lokolo
    • #2
    • 17th Feb 10, 10:29 AM
    • #2
    • 17th Feb 10, 10:29 AM
    The Better Banking Campaign says between five million and seven million people cannot access mainstream credit, such as overdrafts, loans and credit cards, while nearly 1.8 million people do not have even a basic bank account (see the Best Bank Accounts, Cheap Loans and Balance Transfer Credit Card guides).
    and then...


    As a result, it said these people were being forced to borrow money from payday lenders and home credit companies, which often charged interest equivalent to 2,500% a year
    Maybe theres a reason the banks don't want to lend them money!!?!

    ----------------

    Research carried out for the group found 70% of people think having access to mainstream financial services should be a basic right, while 55% think being able to access them is essential for everyday living.
    A bank account for spending, setting DDs yes. An account with an overdraft, ability to borrow money, no.

    Agreed, everyone should have the right to have a bank account. However, some services should be a priviledge, not a right.

    ------------------

    "Most people believe access to bank accounts and affordable credit are basic rights, so we want to see this as a priority for all the political parties."
    Affordable credit as a right!? No. It should be a privildge imo.
    • crispy_chris
    • By crispy_chris 17th Feb 10, 10:35 AM
    • 482 Posts
    • 319 Thanks
    crispy_chris
    • #3
    • 17th Feb 10, 10:35 AM
    • #3
    • 17th Feb 10, 10:35 AM
    Gotta say, I'm with Lokolo on this.
  • Inactive
    • #4
    • 17th Feb 10, 10:39 AM
    • #4
    • 17th Feb 10, 10:39 AM
    Gotta say, I'm with Lokolo on this.
    Originally posted by crispy_chris
    Me as well, I can see this getting a bit heated..
    • glider3560
    • By glider3560 17th Feb 10, 10:41 AM
    • 3,871 Posts
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    glider3560
    • #5
    • 17th Feb 10, 10:41 AM
    • #5
    • 17th Feb 10, 10:41 AM
    Same here. If banks lend to people who can't afford to repay, but at low rates, then we all know what happens because we've just experienced it over the past few years!

    Access to basic banking facilities should be available to everyone. But overdrafts and other lending should only be available to those who can afford to repay.

    • ~Brock~
    • By ~Brock~ 17th Feb 10, 10:47 AM
    • 1,607 Posts
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    ~Brock~
    • #6
    • 17th Feb 10, 10:47 AM
    • #6
    • 17th Feb 10, 10:47 AM
    Would these be the same charities that set up and support an endless supply of schemes, helplines and departments to help these 'underpriviledged' consumers explore every possible avenue of escaping the repayment of these borrowings once they have been taken out, because all of a sudden, once the money has been borrowed, they become 'vulnerable'??

    Good grief.........you couldn't make it up.
    • Hazzanet
    • By Hazzanet 17th Feb 10, 10:52 AM
    • 1,655 Posts
    • 934 Thanks
    Hazzanet
    • #7
    • 17th Feb 10, 10:52 AM
    • #7
    • 17th Feb 10, 10:52 AM
    Agree 100% with Lokolo here.
    4358
    • davethorp
    • By davethorp 17th Feb 10, 11:31 AM
    • 1,512 Posts
    • 1,108 Thanks
    davethorp
    • #8
    • 17th Feb 10, 11:31 AM
    • #8
    • 17th Feb 10, 11:31 AM
    The way I read that article it seems like they are wanting banks to not exclude customers from certain facilities just because they are low down the credit ladder and can only get a basic banking account

    Personally I'd like to see banks doing away with so called basic bank accounts and offering full accounts to all. Before anyone jumps down my throat I don't mean offering things such as overdrafts, full debit cards and credit cards to all. I mean only having a standard current account and then tailoring its facilities to meet credit worthiness.

    Take natwest (who I bank with) the only differences between the basic step account I have and the full current plus account are

    • Offline Visa Debit + Cheque Guarantee (subject to status anyway, online visa debit same as step account offered to everyone else)
    • Cheque Book (extinct and I think subject to status)
    • Overdraft (subject to status)
    So why not do away with the basic account, offer the current account to all leaving elements still subject to status but importantly not excluding customers from being able to get more facilities in the future just because they only hold a basic account. There is a certain stigma attached with the basic bank accounts where the banks just overlook customers with these accounts for any form of upgraded product or credit

    Having said that I totally agree with the views of lokolo and other earlier posters that banks should not just throw credit at people. That's not what I'm saying though. I just think it should be easier for people who have made mistakes in the past to get back on the ladder and get more and better facilities if and when they are ready and offering full, but individually tailored, accounts to all would be one way of doing this

  • double mattress
    • #9
    • 17th Feb 10, 11:36 AM
    • #9
    • 17th Feb 10, 11:36 AM
    Credit as a right? Its this kind of belief that causes so many problems in the 1st place.
  • jos004
    I disagree with Lokolo here. Simply give the Post Office full banking rights, with a small subsidy from the government. To attract/steal customers from the private sector:

    * find a way of minimising bank charges.
    * scrap those stupid worthless Visa Electron/Solo cards
    * give all customers a normal debit card. when funds are insufficient in their account, the debit card will NOT work. Computer software is intelligent enough to know when somebody's a/c is empty: high street banks are well aware of this.
    * if the customer applies for a cheque book and writes out a cheque knowing there are insufficient funds in a/c they'll encounter banking charges.
    * treat customers with a bit of respect unlike high st. banks.

    I'd rather deal with a payday loan company, as opposed to grovelling to some low life bank manager for an overdraft.
  • sillystudent
    Like others in this thread, agree completely with Lokolo - after all, wasn't the current mess we're in essentially caused by massive defaults of loans to subprime borrowers? I might've over-simplified it a little but the point stands - credit should be a privilege, to say it is a 'right' is ridiculous.


    However I do think basic bank accounts should be available to all. The problem arises, however, because a lot of these sub-prime borrowers will have debts (possibly ones sold on to DCAs) to a number of the high-street banks
    - under these circumstances isn't it understandable that these banks don't want these particular customers back? (even if the basic account doesn't involve any borrowing.)

    I'd rather deal with a payday loan company, as opposed to grovelling to some low life bank manager for an overdraft.
    Originally posted by jos004
    Really?? Even if you pay hundreds/possibly thousands more in interest? I wouldn't!! And tbh I think you'll find the payday loan people are far more likely to be "low lifes" than the bank manager who's probably well-educated/has a good university degree
    Last edited by sillystudent; 17-02-2010 at 11:49 AM.
    • Lokolo
    • By Lokolo 17th Feb 10, 11:56 AM
    • 20,216 Posts
    • 15,399 Thanks
    Lokolo
    I disagree with Lokolo here. Simply give the Post Office full banking rights, with a small subsidy from the government. To attract/steal customers from the private sector:

    * find a way of minimising bank charges.
    * scrap those stupid worthless Visa Electron/Solo cards
    * give all customers a normal debit card. when funds are insufficient in their account, the debit card will NOT work. Computer software is intelligent enough to know when somebody's a/c is empty: high street banks are well aware of this.
    * if the customer applies for a cheque book and writes out a cheque knowing there are insufficient funds in a/c they'll encounter banking charges.
    * treat customers with a bit of respect unlike high st. banks.

    I'd rather deal with a payday loan company, as opposed to grovelling to some low life bank manager for an overdraft.
    Originally posted by jos004
    Your point has nothing to with all customers being allowed affordable credit, which is what the article is to do with.....
    • Lokolo
    • By Lokolo 17th Feb 10, 11:57 AM
    • 20,216 Posts
    • 15,399 Thanks
    Lokolo
    The way I read that article it seems like they are wanting banks to not exclude customers from certain facilities just because they are low down the credit ladder and can only get a basic banking account
    Originally posted by davethorp
    Yeh the artcile was a bit of a mix of things. It seemed to indicate they want both accounts AND affordable credit. I couldn't work out if the artcile was aimed at both separately, or both together.
    • davidgmmafan
    • By davidgmmafan 17th Feb 10, 12:00 PM
    • 1,450 Posts
    • 523 Thanks
    davidgmmafan
    "As a result, it said these people were being forced to borrow money from payday lenders and home credit companies, which often charged interest equivalent to 2,500% a year"

    That's not a kick the behind off what the new 'simpler' Halifax charges work out at for small overdrawn balances.

    People should have access to a basic account, there is no right to borrow money.

    Whilst some people will certainly lose out because they don't have a bank account and thus can't have DD's equally they cannot incur bank charges. Personally I think direct payment wasa pretty boneheaded manoeuvre by the government since it exposed a section of the population, who previously couldn't fall foul of bank charges, to the risk of incuring them.


    • onlypaddy
    • By onlypaddy 17th Feb 10, 1:15 PM
    • 972 Posts
    • 471 Thanks
    onlypaddy
    The way I read that article it seems like they are wanting banks to not exclude customers from certain facilities just because they are low down the credit ladder and can only get a basic banking account

    Personally I'd like to see banks doing away with so called basic bank accounts and offering full accounts to all. Before anyone jumps down my throat I don't mean offering things such as overdrafts, full debit cards and credit cards to all. I mean only having a standard current account and then tailoring its facilities to meet credit worthiness.

    Take natwest (who I bank with) the only differences between the basic step account I have and the full current plus account are

    • Offline Visa Debit + Cheque Guarantee (subject to status anyway, online visa debit same as step account offered to everyone else)
    • Cheque Book (extinct and I think subject to status)
    • Overdraft (subject to status)
    So why not do away with the basic account, offer the current account to all leaving elements still subject to status but importantly not excluding customers from being able to get more facilities in the future just because they only hold a basic account. There is a certain stigma attached with the basic bank accounts where the banks just overlook customers with these accounts for any form of upgraded product or credit

    Having said that I totally agree with the views of lokolo and other earlier posters that banks should not just throw credit at people. That's not what I'm saying though. I just think it should be easier for people who have made mistakes in the past to get back on the ladder and get more and better facilities if and when they are ready and offering full, but individually tailored, accounts to all would be one way of doing this
    Originally posted by davethorp
    What is the difference between your suggestions and the definition of a basic bank account?

    Also, the fact that banks overlook basic account customers for upgrade is wrong. Basic accounts cost the bank money, hence the reluctance to give them. So if anything, these are top of the list for banks to upgrade once a good behaviour trend is seen.

    I'm testament to this. HSBC basic account to First Direct in less than a year.
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    • davethorp
    • By davethorp 17th Feb 10, 1:37 PM
    • 1,512 Posts
    • 1,108 Thanks
    davethorp
    What is the difference between your suggestions and the definition of a basic bank account?

    Also, the fact that banks overlook basic account customers for upgrade is wrong. Basic accounts cost the bank money, hence the reluctance to give them. So if anything, these are top of the list for banks to upgrade once a good behaviour trend is seen.

    I'm testament to this. HSBC basic account to First Direct in less than a year.
    Originally posted by onlypaddy
    The difference is a basic bank account can't have a full debit card or an overdraft added to it regardless of how well that account is run. An individually tailored full account can!

    And yes banks do overlook basic customers. Some banks when a full customer logs into Internet banking get offered pre approved overdrafts or loans. Basic customers don't get this

    count yourself lucky hsbc upgraded you. Their basic account is about as basic as they come. Would hate to be stuck with just a cash card in this day and age

    • Lokolo
    • By Lokolo 17th Feb 10, 1:42 PM
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    • 15,399 Thanks
    Lokolo
    The difference is a basic bank account can't have a full debit card or an overdraft added to it regardless of how well that account is run. An individually tailored full account can!

    And yes banks do overlook basic customers. Some banks when a full customer logs into Internet banking get offered pre approved overdrafts or loans. Basic customers don't get this

    count yourself lucky hsbc upgraded you. Their basic account is about as basic as they come. Would hate to be stuck with just a cash card in this day and age
    Originally posted by davethorp
    But once the account has been managed well you can upgrade?

    Lloyds also give a full debit card with their basic account.
    • rb10
    • By rb10 17th Feb 10, 1:46 PM
    • 6,304 Posts
    • 3,827 Thanks
    rb10
    Personally I'd like to see banks doing away with so called basic bank accounts and offering full accounts to all. Before anyone jumps down my throat I don't mean offering things such as overdrafts, full debit cards and credit cards to all. I mean only having a standard current account and then tailoring its facilities to meet credit worthiness.

    Take natwest (who I bank with) the only differences between the basic step account I have and the full current plus account are

    • Offline Visa Debit + Cheque Guarantee (subject to status anyway, online visa debit same as step account offered to everyone else)
    • Cheque Book (extinct and I think subject to status)
    • Overdraft (subject to status)
    So why not do away with the basic account, offer the current account to all leaving elements still subject to status
    Originally posted by davethorp
    But this is exactly what they do at the moment. They offer all these facilities subject to status, it's just that most banks will give their basic account a different name and a different coloured card to their main account.

    Is it that you are embarrassed to have a basic account, and would like people to think that you've got a full one? As your suggestions don't seem to change the actual facilities available to anyone.

    but importantly not excluding customers from being able to get more facilities in the future just because they only hold a basic account. There is a certain stigma attached with the basic bank accounts where the banks just overlook customers with these accounts for any form of upgraded product or credit
    Originally posted by davethorp
    Nonsense.

    * give all customers a normal debit card. when funds are insufficient in their account, the debit card will NOT work. Computer software is intelligent enough to know when somebody's a/c is empty: high street banks are well aware of this.
    Originally posted by jos004
    Unfortunately computer software is not currently at the stage when this can always be relied upon. A small number of retailers do not have a direct link to banks to be able to authorise withdrawals instantly (e.g. on trains). This means that the transaction is authorised when there may not be money in the account - and the bank doesn't learn about the transaction until after the event.

    However, I expect that with improvements in mobile/satellite technology, this will become possible in the near future - we're just not there technologically yet.

    * treat customers with a bit of respect unlike high st. banks.
    Originally posted by jos004
    My bank (a high street bank) treats me with respect, because I treat them with respect.

    I follow the T&Cs laid out in our agreement, and so I am treated well.

    Lloyds also give a full debit card with their basic account.
    Originally posted by Lokolo
    No, although it is a Visa debit card, it is restricted, and does not have the same acceptance levels as a 'full' debit card.

    It is more akin to a Visa Electron card.
    • davethorp
    • By davethorp 17th Feb 10, 1:47 PM
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    • 1,108 Thanks
    davethorp
    But once the account has been managed well you can upgrade?
    Originally posted by Lokolo
    you would think that would be the case wouldn't you?

    • davethorp
    • By davethorp 17th Feb 10, 1:55 PM
    • 1,512 Posts
    • 1,108 Thanks
    davethorp
    But this is exactly what they do at the moment. They offer all these facilities subject to status, it's just that most banks will give their basic account a different name and a different coloured card to their main account.
    Originally posted by rb10
    So according to you someone could subject to status get an overdraft added to a basic bank account. I'll just call natwest and ask them if that's the case shall I?

    Nonsense.
    Originally posted by rb10
    that's what natwest has just said

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