Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 13th Jul 12, 10:59 AM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    MSE News: OFT to investigate current accounts
    • #1
    • 13th Jul 12, 10:59 AM
    MSE News: OFT to investigate current accounts 13th Jul 12 at 10:59 AM
    "The OFT today launched a review of the market, aimed at improving competition and ensuring banks are customer-focused..."

Page 1
    • molerat
    • By molerat 13th Jul 12, 12:00 PM
    • 21,408 Posts
    • 15,668 Thanks
    molerat
    • #2
    • 13th Jul 12, 12:00 PM
    • #2
    • 13th Jul 12, 12:00 PM
    The only outcome a major investigation would bring is charges for all. Penalise the majority for the mismanagement of the minority.
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • Butterfly Brain
    • By Butterfly Brain 13th Jul 12, 12:05 PM
    • 8,736 Posts
    • 61,001 Thanks
    Butterfly Brain
    • #3
    • 13th Jul 12, 12:05 PM
    • #3
    • 13th Jul 12, 12:05 PM
    Long overdue
    Blessed are the cracked for they are the ones that let in the light
    C.R.A.P R.O.L.L.Z. Member #35 Butterfly Brain + OH - Foraging Fixers
    Not Buying it 2015!
  • pqrdef
    • #4
    • 13th Jul 12, 12:13 PM
    • #4
    • 13th Jul 12, 12:13 PM
    The banks have been conniving at this and now they're licking their lips. They've already persuaded Bailey that free banking has to end.

    The banks won't fight over current accounts unless there are fat profits to be made. Those profits will be at my expense. If only one bank will give me free banking and carry me at a loss, that will do nicely.
    • Gromitt
    • By Gromitt 13th Jul 12, 12:17 PM
    • 4,981 Posts
    • 2,384 Thanks
    Gromitt
    • #5
    • 13th Jul 12, 12:17 PM
    • #5
    • 13th Jul 12, 12:17 PM
    I can just see it now, forcing charges on all so they can reduce charges for people who are constantly in overdrafts and have bounced payments, etc. It will be described as more 'fair', when the people who don't incur charges shouldn't be supporting those who do.
    • molerat
    • By molerat 13th Jul 12, 12:47 PM
    • 21,408 Posts
    • 15,668 Thanks
    molerat
    • #6
    • 13th Jul 12, 12:47 PM
    • #6
    • 13th Jul 12, 12:47 PM
    Yep, "fairer" charges all round
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • Consumerist
    • By Consumerist 13th Jul 12, 1:28 PM
    • 5,247 Posts
    • 2,630 Thanks
    Consumerist
    • #7
    • 13th Jul 12, 1:28 PM
    • #7
    • 13th Jul 12, 1:28 PM
    It seems to me absurd that those who occasionally drop into the red are hammered by the banks in order to make life easier for those with consistently large overdrafts.

    My great worry about all this is that the OFT will make its usual complete dog's breakfast of this "probe" so that we finish up with an end to the "free banking" lie (arguably, a good thing) and still be lumbered with the obscene additional charges we face at the moment for minor transgressions of banks' Ts & Cs.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • JimmyTheWig
    • By JimmyTheWig 13th Jul 12, 1:52 PM
    • 11,885 Posts
    • 11,412 Thanks
    JimmyTheWig
    • #8
    • 13th Jul 12, 1:52 PM
    • #8
    • 13th Jul 12, 1:52 PM
    If only one bank will give me free banking and carry me at a loss, that will do nicely.
    Originally posted by pqrdef
    Why would they want to carry you at a loss?

    I can just see it now, forcing charges on all so they can reduce charges for people who are constantly in overdrafts and have bounced payments, etc. It will be described as more 'fair', when the people who don't incur charges shouldn't be supporting those who do.
    Originally posted by Gromitt
    If the people who are constantly in overdrafts really aren't going to be paying their share then I agree that wouldn't be fair.
    But I think at the moment these people are paying more than their fair share.
    I don't think that someone with an arranged overdraft facility who is 1 overdrawn costs Halifax 1 a day more than if they were 1 in credit instead.
    There's plenty of scope to reduce these fees without ending up with the people who pay them under-paying.
    • Alpine Star
    • By Alpine Star 13th Jul 12, 5:47 PM
    • 1,259 Posts
    • 611 Thanks
    Alpine Star
    • #9
    • 13th Jul 12, 5:47 PM
    • #9
    • 13th Jul 12, 5:47 PM
    I can just see it now, forcing charges on all so they can reduce charges for people who are constantly in overdrafts and have bounced payments, etc. It will be described as more 'fair', when the people who don't incur charges shouldn't be supporting those who do.
    Originally posted by Gromitt
    This is so niave.

    There is nothing fairer than everybody being charged for their own banking services.

    If you want bank account services, pay for them yourself !!!!!!!!!!.
    • aldredd
    • By aldredd 14th Jul 12, 2:39 AM
    • 918 Posts
    • 659 Thanks
    aldredd
    I can just see it now, forcing charges on all so they can reduce charges for people who are constantly in overdrafts and have bounced payments, etc. It will be described as more 'fair', when the people who don't incur charges shouldn't be supporting those who do.
    Originally posted by Gromitt
    Not being funny, but there is always going to be a cost to running a bank account. Currently, that cost is effectively passed to those who are unable, for whatever reason, to balance their finances.

    Whilst I don't exactly like the idea of having to pay to bank, I certainly consider paying your own banking fees a much fairer system than what we have now, where we burden those least able to manage it with the cost of everyone's banking.
    Last edited by aldredd; 14-07-2012 at 7:33 AM.
  • pqrdef
    Why would they want to carry you at a loss?
    Originally posted by JimmyTheWig
    Same reason people send me junk mail. The price of acquiring a customer base to sell mortgages, credit cards and insurance at is that you get some people on the list who won't be buying.

    Being advertised at is the price we pay for free services. We know that. But I object to being advertised at on a service I'm paying for. (Anybody listening at BT email?)

    What do people want next, charges for Google?
    • missile
    • By missile 14th Jul 12, 9:36 AM
    • 10,227 Posts
    • 5,263 Thanks
    missile
    The last investigation was a whitewash and a complete waste of time and money. This one will be no better.

    I would switch to Dave's Bank if I could.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • Jezzamk
    • By Jezzamk 14th Jul 12, 10:17 AM
    • 281 Posts
    • 4,366 Thanks
    Jezzamk
    I understand that it costs the bank to provide a current account. What I do not accept is that they make a loss on running current accounts.

    If the banks were losing money on current accounts they would stop offering them.

    Also, banks are advertising current accounts and some even offer financial incentives to move to them. Why would they pay to win unprofitable business?

    The banks make money on investing the money that is in my account. Although the rate of return on the amount in a typical current account is small the returns to a bank are much higher as they are investing the deposits across all the accounts they hold.

    I accept that if I overdrawn there will be a charge and that interest is payable on overdrafts.

    In addition to investing the deposits the banks want the cross sales from the current accounts such as mortgages, personal loans, insurance, pensions and possibly business accounts.

    However, the banks will make it appear that they are making a loss by showing all the costs asssociated with running an account but only showing the obvious returns.

    The banks usedto charge for current accounts and would love to reintroduce charges, but none of them want to move first as they will lose too much business. However, if they are told the current practise is unfair then they can say they didn't want to charge but were forced to.

    All of this because a minority of people can't manage their financial affairs and expect the majority to subsidise them.

    I do not work for a bank and I believe that there are a lot of unsound/unfair practices within the banking sector but they way that current accounts are run isn't one of them.
  • opinions4u
    The current account market is innovative and competitive.

    Reward, Vantage, 123, free travel insurance products, interest free overdrafts, packaged accounts with different insurances for a fee.

    Loads of choice. Charging structures that are basically voluntary. Incentives to switch provider.

    I'm sure the OFT quango has far less competitive markets that fall under their remit that they could take a peek out.

    I'm sure there are more dubious practices in banking than the provision of current accounts.

    But finding another populist bank bashing approach deflects the attention from our poor politicians.
    Last edited by opinions4u; 14-07-2012 at 10:48 AM.
    • Consumerist
    • By Consumerist 14th Jul 12, 12:46 PM
    • 5,247 Posts
    • 2,630 Thanks
    Consumerist
    The current account market is innovative and competitive.
    Originally posted by opinions4u


    I accept that the current account market is innovative. It's a question of who can get away with charging the most before there is a public outcry.

    Halifax, I think, started the greediest approach to overdrafts by abandoning the interest charge on overdrafts which was a fair system because those with large and consistent overdrafts paid the most. Since they got away with it, despite initial complaints from customers, the other banks followed their lead.

    And what was their excuse? They claimed it was easier for their customers to understand. It is now emerging that banks in general are basically dishonest and the sooner the current system is dismantled and reassembled for the benefit of bank customers, the better.

    All this, of course, will take some time because of the taxes they used to generate but, having now exposed banking as a generally corrupt enterprise, we have an opportunity to rebuild it.

    We must, of course, expect the banking lobby on this site to express the view that banks really are whiter than white and have been badly misunderstood. The rest of us know better.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • Alpine Star
    • By Alpine Star 14th Jul 12, 1:19 PM
    • 1,259 Posts
    • 611 Thanks
    Alpine Star
    The current account market is innovative and competitive.
    Originally posted by opinions4u
    The Indepenent Commision on Banking found that:

    ''There are long-standing competition issues in UK retail banking.''

    Doesn't sound particularly competitive to me.
    • aldredd
    • By aldredd 14th Jul 12, 1:32 PM
    • 918 Posts
    • 659 Thanks
    aldredd

    All of this because a minority of people can't manage their financial affairs and expect the majority to subsidise them.
    Originally posted by Jezzamk
    How do you work that one out?
    I think it's been pretty well proven that it does not cost banks to manage accounts frequently going into the red anywhere close to what they charge their customers.

    Believe me, I've been there and it's truly crippling what they would charge in a given month if you have cash flow issues.
    Thankfully I'm financially stable these days, but sympathise with those still dealing with it - and any suggestion this group of customers subsidises well ran accounts is frankly insulting.
  • opinions4u
    The Indepenent Commision on Banking found that:

    ''There are long-standing competition issues in UK retail banking.''

    Doesn't sound particularly competitive to me.
    Originally posted by Alpine Star
    Price up identical iPads at 6 high street retailers.

    Let me know if you find any differences at all.

    Price up current accounts from the five main high street bank brands and Natiowide Building Society. Big pricing differences in credit and overdrawn.
    • Consumerist
    • By Consumerist 14th Jul 12, 2:14 PM
    • 5,247 Posts
    • 2,630 Thanks
    Consumerist
    Price up current accounts from the five main high street bank brands and Natiowide Building Society. Big pricing differences in credit and overdrawn.
    Originally posted by opinions4u
    That suggests to me there is little competition in banking. In a competitive market prices tend to converge.
    Warning: In the kingdom of the blind, the one-eyed man is king.
  • pqrdef
    That suggests to me there is little competition in banking. In a competitive market prices tend to converge.
    Originally posted by Consumerist
    And then people say it's a cartel and there's no competition.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

252Posts Today

2,104Users online

Martin's Twitter