Bank Charges.. Only One Possible Outcome??

[itsallaboutyou]

Afternoon all,

I've been reading a lot recently about bank charges - and given the amount of money that has been refunded.. I can only see one possible outcome - which will mean that the the banks start charging exorbitant monthly fees for the privilege of managing your money.

Currently, I dont use my overdraft - there's always a small portion of money left over each month after I've paid all my bills etc so in effect the bank are administering my account for free (save the small portion of debit interest that they take) - as such, I dont see how there can be any other outcome than being charged. Personally, I'd be aggrieved to pay £9 a month...even if it does get 13% off a day at a spa - or 20% off wine if I buy a million bottles! (I talk now of Natwest's Advantage Gold current account)

Anyway - anybody else see this happening?

Tom*

 

[itsallaboutyou]

Whoa - Some good responses here!

I think people are very naive when it comes to the banks.. they tout themselves as helpful entities - when in reality, as mentioned further up^ - they are solely a money making enterprise (which all businesses aspire to be!)

I only ask - because Natwest, my bank of 16 years keep trying to 'upgrade' me to one of their paying accounts - whether it be advantage gold, blue or premier - does anybody else have these accounts? Do you benefit from having one? (I must stress that I have no intention of taking them up on their offer!)

Tom*

 

[itsallaboutyou]

I'm a Lloyds Premier Customer on my joint account, so my wife and I share the £15 a month charge.

For that we get:

Full AA membership whuch would be £137 each.
Full travel insurance which would be about £80 each.
Mobile phone insurance which I have no idea how much it would cost because I wouldn't have it otherwise.
Card protection.
Some other stuff.

It's enough to make it worthwhile for me, but I do review it each year to see if it is still worth it.

Ah - I see - they're actually pretty good benefits! I was perhaps a little facetious before - but Natwest do tend to over emphasise the things they think people will prefer as opposed to those that are actually useful!

Cheers for that,

Tom*

 

[itsallaboutyou]

Wow, so many people who, because the those nice banking angels talk about charging for proper banking services, grovel like medieval peasants and accept it as inevitable!

Instead of regailing us with anecdotal stories of how righteous they are with their money, and how absolutely unfair it is that they should be charged because all you evil people keep getting reimbursed, maybe they should be making sure that their banks understand that if charges are introduced, they will take their fat accounts elsewhere.

Good point - but I think any mandatory subscription would be across the board - certainly for the larger banks, RBS, Halifax, HSBC et al - purely because they appear to be leaning that way already...

Personally, I used to be carp with money - but when i had the opportunity to get a mortgage and buy a place of my own - I knew it was time to grow up... I, personally could see myself in the future getting to a point where I don't see a "problem" if I have to pay a nominal fee for using the service - nominal being the operative word. I was simply commenting on the fact that that this is where (IMO) I can see the banks recouping some of their lost money as they simply wont be able to afford to pay out - and still pay credit interest at the same time!*

I've seen an advert on tv - where superhands is offering £100 to customers who switch and a further £100 if you don't like it - something must be going wrong if they're offering this kind of incentive...

All I got was a natwest pig...

Tom

* or something to that effect...

 

[itsallaboutyou]

Not above the law, no. But they heavily influence it.

And just what bank are you going to go move your fat account to when they've all collaborated on a monthly fee scale for accounts of differing levels?

++ another good point - I think somewhere along the line they would have to subscribe to a service agreement stating scales of charges etc..

 

[itsallaboutyou]

Ditto - Sold mine on flea bay. I had the set

Heh - I didnt even think of that... - he's(i'm assuming its a 'he')now sitting on myself collecting dust!

Tom*

 

[itsallaboutyou]

The banks may well lose, but they should charge people who go below absolute zero it would be much worse if they were to just cut you off and cancel all transactions rather than charge you.

From my experience people I know that have been charged by banks it was there own fault anyhow, because they had to go on holiday to Spain, or they had to have skyplus, and had to go out every Friday and Saturday night. Even though they knew full well there would be no money at the end of the month. Plus one light month would have just solved there issue but they are too dim to cut back and so pay out every time.

Good thinking - however, this brings up a few supplemental points- why should the banks authorise payments knowing that doing so will take you overdrawn.

Personally, I do my books the day I get paid and any spare cash I have is mine to play with... But I know when and what is going out and coming in within a few pence...

I have a £100 overdraft - which I've never needed to use - but that is my buffer - 'hoping' for the best is not how I do things...

This also highlights the issue of fraud - but thats for another time..

Tom*

 

[itsallaboutyou]

Working for a bank I can say that you are categorically wrong. Banks are businesses not non-profit organisations. They do not have to offer free accounts but do it because everyone else does (in the UK anyway).

I thought this might have been the case! Thanks for your insight..

Tom*

 

[itsallaboutyou]

So you would rather the bank not pay your mortgage or DD or what ever the requested payment was ??

Personally yes - but only because I know exactly how much money is in my account at any given time.

If i knew that I wouldn't be able to make a payment, I would approach the lender, service provider first. If the were unable to help me, I would then approach the bank to extend my overdraft.

As i mentioned earlier - most if not all people should be aware of their situation financially - and i'd be annoyed if my bank authorised a debit transaction which would take me overdrawn, by which I mean over my authorised overdraft.

Tom*

 

[itsallaboutyou]

There is, talk to them, discuss the situation and take it from there. Don't go in threatening or demanding (it won't work with this case going on), but explain the situation and if you've got a good previous history, most banks will waive the charges for a one off situation.

If it's not a one off, getting the charges waived will be harder...

Good point - I've never had a bank charge (thankfully!) but there was a time where I came close... I'd paid my credit card balance off in full - but hadnt taken account of the bank holiday (stupid, I know!). I approached my bank and explained the situation and they said they would waive the charge in this instance... I dont expect to be that lucky in future!

If I was a consistent offender, I wouldnt have a leg to stand on, whereas my bank took the view that I had never missed a payment before and the funds were available to pay...

Tom*

 

[itsallaboutyou]

im my case the reason for being charged the last few months is because i have been charged once which has messed my finances up. causing me problems every month at the moment. Like this month wanting £135 in charges is goign to make me very short next month and its going to be hard to just live normally next month

That seems a little harsh - but its standard practice afaik - they compound charges - which is on a par with highway robbery!

Have you approached them for an authorised overdraft - although not ideal it may help for this one month?

Tom*

 

[itsallaboutyou]

Exactly what I said above your post, you wait until this decision has been made in the high courts over the validity of bank charges, if it goes against them they soon won't let you go over your agreed over draft then will they, and millions of people will be better off for it, I don't care if they even charge a monthly service charge for the acc because at least that would be a more honest way to gain money from it's customers, end of the day they are providing a banking service, I'd much rather pay them for the whole package instead of being charged silly amounts of money for going over drawn when I would prefer it that they didn't allow my acc to go over my agreed amount.

I'm beginning to come round to this way of thinking... When I started the thread it wasnt to try and come to any conclusion- but the more I think about it, the more it makes sense (to me anyway!).

I have indeed i called them up and asked for a temp on just for one month. so i dont continue mounting up the charges and they refused. so how all i can do is watch the account, and see that its being charged a minimum of £6 a day for 10 days. but if i then go over drawn by another £10 it increases (and starts again - the 10 days period) at £15 a day. and lloyds say these charges are a fair way rather than the standard £30 a time (max of 3 times a month.

Eek - that sucks... If I understand, you're being charged £6 per day for being in an unathorised overdraft upto 10 days, then if you go overdrawn again - it bumps upto £15 per day?

That seems quite a lot...

And the bank aren't being helpful in terms of an overdraft facility?

Tom*

 

[itsallaboutyou]

when I setup an overdraft facility on my acc I don''t expect it to go over that amount, but they continue to allow it and then charge you for the pleasure, sometimes they are even more cheeky, they will allow the DD payment to come out of your acc for a day then bounce it back and still charge you even though they didn't honour the payment"

Must have skipped over this part - its a point that was made earlier on - but its definitely in the region of 'nail' on 'head'...

My overdraft is £100 - even though they keep offering me gazillions of pounds - I stick to £100. Why? because in the event of an emergency, I have savings to fall back on and if an unexpected bill comes out - or a one off expense that I hadnt budgeted for - i like knowing that the (high rate of interest) 'safety net' (probably not the right word!) is there for my use...

You're spot on - the banks shouldnt authorise payments that will take you over your limit.

In fact - would this not be a case of the bank breaching their own rules, but using the consumer as a medium??*

Tom


*hope that makes sense?? I'm not even sure myself!!

 

[itsallaboutyou]

thats right. basically they tell you. we can only charge you £6 for 10 days. however if then after or in those 10 days that increases to say £20 over the agreed limit they start the charges again at £15 a day. you then you are looking at £60 for 10days at £6 plus £150 for 10 days at £15

i called them up and they just refused me as i have been charged the past 2 months. there is no way i can get away from the charges as they are looking at taking £135 from me, which is next month going to end up with me bveing charged again....

Surely thats a perpetual cycle? Its definitely irresponsible... Thats shocking. I have to admit, I'm pretty naive when it comes to the charges levied on the consumer as its never happened to me - but that does seem rather steep...

I'd try and call them back and speak to someone senior, explain that its effectively introducing a perpetual cycle and see if that gets you anywhere. I'd keep going as high up the food chain as you can manage... Either that or contact the complaints people and see if they can do anything...

Eek dude - that sucks.. best of luck with it...

Tom*

 

[itsallaboutyou]

The banks know this, it's intentional.

Yup, I'm aware of the concept - 'revolvers', is the term I think?!

Whereas 'deadbeats' are people who they banks dont make any money off? Is that right??


Tom*

 

[itsallaboutyou]

well been down to the bank. now got a appointment at 2.30 this afternoon.

Well thats good then - just make sure you explain everything to them and see what they can do for you...

Its much better to be straight with them at an early stage which is what you're doing!

Good luck!

Tom*

//edit - Make sure you let us know how you get on!!

 

[itsallaboutyou]

Well no, because until the courts tell them otherwise, the banks will continue to insist their practise is legal.

True - a friend of mine is currently going through it - and he still gets charged.. To be fair though he is exceedingly carp with money...

Its going to set in interesting precedent either way...

Tom*

 

[itsallaboutyou]

this thread isnt actually focusing on the reason why the banks are being taken to court.

but in a nut shell - yes you guys are right and the oft is wrong well done gz all round.
/sarcasm

Heh

Quite right - but I think the issue does need to be discussed - as it is intrinsically related? No?

Tom*

 

[itsallaboutyou]

I find it amusing that the people who manage thier accounts well regard themselves as "good" customers. If you keep a small balance in your account consistently and never go overdrawn the bank will be making no money off you at all. The people who are being charged these fees are making the banks millions in profits.

If you ran a company who would you regard as your best customers, the ones who make you minmal profit, or the ones who make you good profits?

In effect, the "bad" customers are subsidising the "good" customers. If the "bad" customers manage thier accounts perectly the banks will be making less income off them, so to recoup that money they will need to start charging elsewhere, hence the introduction of monthly fees.

Its true - but its a sad state of affairs - but I know that if I was in charge of a profit making enterprise, I would certainly do my best to retain the 'best' cutomers, meaning the so called 'revolvers' - as they make the money.

This was my reason for starting this thread - to try and gauge people's reactions to the possibility of introducing bank charges.. So thanks for not sitting on the fence!!



Tom*

 

[itsallaboutyou]

Do we regard ourselves as good customers? I'd say I have good common sense when it comes to money, and I can manage my finances well. I've never said I'm a good customer for a bank to have, (although I actually would actually, given how much I have in savings with them).

I don't recall anyone saying "I'm a better customer then you because I don't go overdrawn".

I don't think anyone is deluded enough to imagine that customers in financial difficulties are banks "favourite" customers.

I'm in the same boat.. And as a result - the bank have opted now to leave me alone - wheareas they used to try and sell me loans, overdrafts and the like...

I've recently moved my savings from a large building society to my bank in the shape of a fixed rate bond - so hopefully that'll get them off my back for a while!

As for being a 'good' or indeed a 'bad' customer, in terms of profitability, I am definitely 'bad' - the bank administer my account for free in my eyes. I dont use my overdraft, so there's not a lot of debit interest to be deducted and I always pay my bills on time...but on the flip side in terms of my credit rating etc, I know that I wont have trouble getting a loan or mortgage providing it is within my means etc... so in that case, I'm a 'good' customer as I will not have trouble making repayments etc...

Its a point that can't be stressed enough. It is a sad state of affairs whereby the bank prefer customers who default occasionally as they make money off them! However, we have to live with it...

I don't think anyone is deluded enough to imagine that customers in financial difficulties are banks "favourite" customers.

Agreed - but I to think there are some underhand tactics in play...

Will be interesting to see how this pans out...

Tom*