Banks win again….

Well once again I am agreeing with mark (crap what next paying the STW office a vist 😉 ), here having a bank account is'nt free.
It's dirt cheap though. My card cost me about 44€ a year including a super premium inssurance. When I only had a check book I pay something like 3€ a term or somethign ridiculous like that. However something that a few of you know, is that each time you pay with yout card, the bank takes a comission out of it (yes tis is true) so basically you pay twice fro the card. Plus there is something else that bugs me you know.
Lets say I buy the merinos jumper from the shop. Now I post a cheque to the STW towers, and they put the cheque in the bank. My account is debited straight away. However, mark will only have the money 5 days later. Where is the money gone? And as for those on here that think people are OD because they buy flat screen, FFS you need a better grasp of reality.

If faced with such terms on a contract you might not sign up to it, it's your choice.

Perhaps you are not aware, but it's virtually impossible to get paid in cash, so you HAVE to have a bank account. Do you actually think it's fair to financially penalise those who are financially incompetent, as well as those who've fallen on hard times? Just so you can save £10 a month? Oh, and you can forget about that too. You're going to be paying for an account pretty soon, I can assure you of that.

Richpenny wrote,

"Perhaps you are not aware, but it's virtually impossible to get paid in cash, so you HAVE to have a bank account."

What a brilliant straw man that is… Yes, it's very hard to live without a bank account. What's not hard, is still dealing in cash by immediately withdrawaing the balance, and never using the account for any other purpose. Most banks offer a simple no-credit bank account along these lines.

What a brilliant straw man that is… Yes, it's very hard to live without a bank account. What's not hard, is still dealing in cash by immediately withdrawaing the balance, and never using the account for any other purpose. Most banks offer a simple no-credit bank account along these lines.

& you'll pay more for your electricity, gas, phone etc. etc. etc.

so punishing the poorest more

BTW, for those using the term 'cartel' I think you're using the term incorrectly – use oligopoly

uplink wrote,

"& you'll pay more for your electricity, gas, phone etc. etc. etc.
so punishing the poorest more "

Sorry, this is the "we hate banks" thread not the "we hate utility companies" thread, you'll have to take this one somewhere else.

yeah but cartel has connotations of blood sucking drug clans who will chop you up with a chainsaw and sell your kids into slavery which suits the banks quite well

Sorry, this is the "we hate banks" thread not the "we hate utility companies" thread, you'll have to take this one somewhere else.

It's the bank charges that push the utility companies into only excepting DDs

Barclays dropped its charges to £8.50 about a year ago now which to me seems to be more fair than the £30 for returned items and £35 for unauthorised overdraft use it charged previously.

Although I haven't been over my overdraft limit for quite some time now, I have done in the past, and I believe that the excessive charges being levied by some of the banks make it harder to stay within the limit.

I already pay a monthly fee for my bank account, and for this fee I get quite a lot in return (interest free overdraft, travel insurance, breakdown cover and mobile phone insurance and a few other bits).

Another issue that screws a lot of poor people that are on benefits is that they get paid the benefits every 2 weeks whereas most DDs become due every calendar month
It must be easy to find that the payment comes in a couple of days later than the month-end every now & then

Uplink wrote, "It's the bank charges that push the utility companies into only excepting DDs"

No truth in this at all, the costs for collecting a DD are lower than those for receiving a BGC but the difference is a tiny fraction of the discount you get for paying by DD- with a typical DD collection being between 5p and 20p and a typical BGC being between 10p and 30p. The utility companies prefer DDs as they're far simpler to administer and give a more reliable timescale for payment. Try and stick to the facts?

a typical DD collection being between 5p and 20p and a typical BGC being between 10p and 30p

So DD is cheaper then. and 5p times 10 millions times 12 is 6 millions not a neglectable amount

Direct Debit is an automatic rebilling system. Once it's set up it just rolls on year after year until the customer stops it. That means as a company you save on reminders, second reminders, marketing and even the costs of having someone process the payments each time they are due.. That is most definitely the big attraction for companies that use DDs. The small saving in transaction charges is insignificant next to the other costs.

No Juan. Not relevant, because it's only one part of the equation, and not the important one, as I mentioned.

The utility companies often discount their customers if they pay by DD, and the discount is always substantially more than the saving that they make for receiving DDs.

Even though they save a few pennies for the transaction method, the discount which they give is greater than they are saving, thus proving that they're not doing this to save money on transaction costs- there's no saving there at all, actually there's a cost.

For example- BT discount you £1.50 per month for paying by DD, but the transaction cost they save at their bank will be, most likely, in the region of 1/10th of this. None of the other payment methods cost BT £1.50 for that matter.

The real reason is that it's very easy to administer DDs, and you get more reliable cashflow- less late payments, less lost payments, and instant reliable information when a DD is cancelled or bounced.

Let's face it, with computers it costs the banks FA to administer most of the day to day current accounts.

I claimed for charges back. When I looked at my natwest ones the fee for going over my OD limit had increased from £12 to £36 in under 2 years. That is pure profiteering.

My very favourite was after I had a car written off, i got a cheque from the insurance co which i wanted to use as deposit on a replacement. For which i needed a bankers draft.

I paid the money into the account on Monday am, and requested a bankers draft to pick up at weds lunchtime. But i was told that because it took 3 days to clear the cheque, whereas the draft would debit my account instantly, I'd be overdrawn (nominally at least) by about £1800 for 3.5 hours – these being the days when banks worked 0930-1530 and cheques took 3 days to clear etc.

For that 3.5 hours I was going to get an unauthorised overdraft charge and some other penalty charge, totalling sth like £60. That's a borrowing interest rate even Rachman would have been proud of. I asked that if i agreed to pay it, would they offer me 1/110th of that rate for my ongoing credit balance for the rest of the year but they declined. I asked for a temporary £2000 overdraft but they declined. In the final event they agreed to waive the charges 'as a gesture of goodwill' and as long as I didn't go overdrawn again that year, otherwise they reserved the right to levy both od charges at that time.

fat chance…… I closed the account the next day.

Sure, ooOOoo, I think anyone who actually believes it's an administration charge is a moron tbh. That's not really the argument.

There ARE costs in addition to the "pen and paper" costs, people say "How much does it cost to send a letter" but that's not the whole picture- banks have to cover the potential risk of unauthorised overdrafts, which means 2 things- 1, subsequent loss, ie they never get the money back and 2, opportunity cost, ie they have to have cash reserves to cover such unexpected overdrafts which they could otherwise be investing in, oh, subprime mortgages or bonuses or whatever. Still, none of that equates to £30 per transaction, but it's more than you'd think.

Good on the banks for not conceding to this. If they had lost, each and everyone of us would end up paying for the people who have let there fees get up to thousands, there was one women on TV the other day who had objected to pay the fees over 4 years ago, she owed something like £150 then, now she owes over £3500k !
This has been another case of many memebers of the public thinking they can get away with paying whats rightly due at everyone elses cost….

Great to see the banks dropping charges…. but were do you think they have recouped these losses ?

i

l

s they take there money before my mortgage gets paid which then means they bounce that and another bill because it would take me od by wait for it!!!!!!!!!!!!!! £1.20 then charge me £40 for this which keeps on going round and round in circles because of this shit i have had 1 week off work this year and that was to go in hospital for an op so basically they`re gonna get a lot fooking better off because there are going to be a lot more people in the same situation as me, they are just total robbing to55ers at least dick turpin wore a fooking mask thanks rant over.

Gazman, I doubt that very much.

I was better off when i was younger and got paid weekly by cash on a friday. Actually having the money in your hand really teaches you the value of money, as you spend so it disappears. You had to actually go to a bank to put money in or get it out.

Nowadays though (i'm very guilty here) its all hole in the wall, debit cards etc so we all spend figures and don't actually appreciate the value of our spending.

Regards credit, to get any (store cards, loans etc) you had to fill out forms then await for approval, or attend an interview but thats changed now , you can borrow what you like at the touch of a button.

I have experienced bad difficulties in the past, due to bad management of money and being made redundant twice in one year. My bank wasn't helpful at all and practiced the honouring of DD then charging me for it even though i clearly had sod all in the account. Now it does make me angry with the folks who sit there and spout off that its peoples fault etc they shouldn't etc. Until you find yourself in difficult circumstances then you can't appreciate how hard it can be.

bigbloke said,

"My bank wasn't helpful at all and practiced the honouring of DD then charging me for it even though i clearly had sod all in the account."

When I was in teh same boat I was very glad for that, it meant my rent got paid- it cost me in bank charges but it meant I had somewhere to live. Can't speak for your situation but there's generally give and take here. Thing is, if you didn't want the DDs paid you could have cancelled them, so the bank are only making that call because you allow them to.

Northwind…..sorry wasn't clear in my post, the bank honoured DD's above my OD limit, therefore i incurred OD overlimit fee's (high) and to make matters worse they seemed to pick and choose which they felt like honouring. Got to a point that my wages when i got a new job (substantially lower than previous job but needs must) were just about covering the OD overlimit charges. Bad times.

Ah, that's really bad when that happens, worst of all worlds really. You end up paying out for stuff you could afford not to then not being able to pay for stuff you need to. You can plan for it, if you know you're going to have to but it's easy to get caught out.

Think this is what some of the righteous posters miss, we're used to seeing headlines about people with £3000 worth of fees, but for most people it's in the hundreds, it's just that it comes at the worst time. The really high debtors really account for a tiny proportion of all the overdraft charges, so using them as an example is pretty futile, judging everyone the same makes no sense.

Research by the OFT published last year found banks earned around a third of their retail revenues from unarranged overdraft charges that were "difficult to understand, not transparent, and not subject to effective consumer control".

So let's wait and see what their new business model will be, if it's actually any different 🙄

And from Stephanomics:

In a single year, the regulator found that nearly a quarter of all accounts paid a penalty for going overdrawn – and only 6% of customers actually switched banks in search of the best deal.

ooOOoo, that "retail revenues" stat is pretty meaningless- banks don't make much direct revenue from their retail operations, in general. They're the part of the business that enables them to make the large profits elsewhere, (for example, you can sign up a massive long-term savings package through the branch, but that wouldn't be retail revenue, it'd be investment banking revenue.)

I could be wrong but I think that the second stat includes debit interest, not just bank charges- it doesn't sound right to me otherwise.

I see what you mean, though where banks actually make their money from is quite an open debate right now!

I think this from the daily mash explains the reasoning a bit more clearly.

From next week customers who go beyond their overdraft limit will be charged just £8 each time the Barclays computer says 'no' to another computer.

A spokesman said: "Thanks to hi-tech innovation our computer can now say 'no' a lot faster than it used to.

"Before it used to go 'nnnnnnnnnnnooooooooooo', which would cost roughly £35 in computer time. Now it just goes 'nope', really quickly."

He added: "Anyone who says it only costs £2.50 for a computer to say 'no' obviously doesn't know very much about computers and stuff."

Wait… I'm wrong on the second thing, that 23% is definately just from unauthorised charges and interest on unauthorised ODs. That's pretty damn high actually.

simple no-credit bank account

Sorry didn't know that. So, what we need to do is get the banks to transfer everyone having problems with charges into these then. You know, those people with big overdrafts. Oh, hang on 😉

This has been another case of many memebers of the public thinking they can get away with paying whats rightly due at everyone elses cost….

No Simon, not really. You see, the banks are really making lots of money out of this. It isn't costing anyone who keeps their account in credit. Of course, if you are actually selfish enough to think that people who aren't good with money or just don't have much should subsidise your banking? Not much point even trying to justify it to yourself.

northwind what do you doubt very much?

In a single year, the regulator found that nearly a quarter of all accounts paid a penalty for going overdrawn – and only 6% of customers actually switched banks in search of the best deal.

Yet another example of the lazy british public just having a good moan rather than doing something about it.