Banks Win Dispute Over Overdraft Fees

[Daggers]

well done you, but when the charges are the equivalent to what you actually earn in a month. it's not that easy to get out of the hole. in fact it just gets deeper and deeper.

not everyone who goes over the overdraft is a fucktard and not everyone isn't.

Who earns £25 per month?

[ob1kanobe0]

I was watching John Majestic (Reading owner) on bbc1 tonight 'rich man, poor man', and the filming was just after Northern Rock went down, John was quite confident at that point that we were heading for a recession. The R word was be mentioned at this point. Point im making is, that the recession was always destined to happen, because it was encouraged to happen, and this banking story is part of it. Theres evidence that the 1930's depression was, atleast encouraged. Are we seeing too much footage of the olden days of society being poor, are they gearing us up for it, getting us ready. They got us ready for 2 illegal wars.

[stez]

Who earns £25 per month?

25 quid for the letter 35 quid for every unpaid item (or whatever they charge these days), if you've ended up in a bit of bother you could end up paying quite a bit. then you get charged every month after that, because your income barely covers your out goings anyway, plus then the charges, which then rack up more and more for each unpaid items.

[Jon the Hat]

The two are wholly unrelated.

The former is to do with preventing an entire banking system - and the economy - from going into collapse.

The latter regards idiots who can't keep track of their finances. I've gone overdrawn, I've got pissed off and I've paid the fees...but it was my fucking fault I went overdrawn. I'm an idiot.

The charges are clearly stated - so if you fuck up, you pay. It couldn't be clearer.

The moans over this stem from a society which wants to blame everyone else for every little shitty thing that happens rather than accept some responsibility.

Dear General Public,

Grow the fuck up.

Don't like the charges? Don't cock up your fucking expenses.

Ah load of bollocks. This is about smug people who have plenty of money taking advanatge of people who struggle. They get a service which should cost money for free becuase the bank is stinging another section of their customers for excessive charges which they cannot afford, on a purely punative basis. Rather than actually pay for what they use, they prefer to see others get screwed over. Wankers.

Banks have a huge power over those with little cash. You can talk about how people can manage thie finances better, but I ask you this:

1) Do the banks have the capacity, with the click of a button to refuse a payment at no cost to themselves. YES

2) Have they done this? NO

3) Does it suddenly cost more to make payments which involve unauthorised lending vs authorised? NO.

4) Do most employers require you to have a current account to be paid into? YES

5) Do the banks all have bascially the same terms and conditions? YES

6) Do you get discounts for paying by direct debit? YES

6) Do people really have the choice to opt out of the banking system? NO

The government should limit these fees, because the consumer has no choice but to sign up to them.

[Sir Fynwy]

Ah load of bollocks. This is about smug people who have plenty of money taking advanatge of people who struggle. They get a service which should cost money for free becuase the bank is stinging another section of their customers for excessive charges which they cannot afford, on a purely punative basis. Rather than actually pay for what they use, they prefer to see others get screwed over. Wankers.

Banks have a huge power over those with little cash. You can talk about how people can manage thie finances better, but I ask you this:

1) Do the banks have the capacity, with the click of a button to refuse a payment at no cost to themselves. YES

2) Have they done this? NO

3) Does it suddenly cost more to make payments which involve unauthorised lending vs authorised? NO.

4) Do most employers require you to have a current account to be paid into? YES

5) Do the banks all have bascially the same terms and conditions? YES

6) Do you get discounts for paying by direct debit? YES

6) Do people really have the choice to opt out of the banking system? NO

The government should limit these fees, because the consumer has no choice but to sign up to them.

The system is set up to be punitive, it is an attempt to encourage good behaviour which is failing dramatically. Personally I think that banks would be better off just stopping people spending more than they have in their accounts unless they take a loan or credit agreement (for which there is plenty of legislation to control excessive behaviour).

Why should people with money in their accounts (which the banks use for lending and investment, thus making profit on it) be charged the same as people with negative balances?

[Jon the Hat]

The system is set up to be punitive, it is an attempt to encourage good behaviour which is failing dramatically. Personally I think that banks would be better off just stopping people spending more than they have in their accounts unless they take a loan or credit agreement (for which there is plenty of legislation to control excessive behaviour).

Why should people with money in their accounts (which the banks use for lending and investment, thus making profit on it) be charged the same as people with negative balances?

No it is not. It is setup to be punative to reap excessive profits for the banks. Like I said they can refuse to pay any bill or payment which takes you over your limit, but instead they choose to fleece you for £30 or so.

They would not be better off preventing the spending, as they would forego a huge profit stream.

People who go overdrawn generally pay about 12-18% interest on that agreed overdraft. So the banks are already making a large margin on that lending. The whole system is a mess designed to confuse the customer and benefit the bank's profits.

[Monk]

This is a recognised problem and has unfortunately been approached by the trial from a stupid angle.

I don't think many people dispute that the bank's have a right to levy a penalty for account holders spending their money without asking them first. What bugs me is that there is no focus on distinguishing between people who are just careless and those who are genuinely in trouble.

Take speeding as an example, for first offenders now you can usually go to a road safety course to avoid part of the penalty and I think this would work in banking. Send offenders on a money management course to avoid the penalty. Thereafter a more severe penalty could be used.

The banks should have to prove that the penalties levied are not a profit generating exercise - and that does not seem to be getting enough focus. I think retail banks should be encouraged to help those in financial trouble to manage their finances better.

[Jon the Hat]

I don't think many people dispute that the bank's have a right to levy a penalty for account holders spending their money without asking them first. What bugs me is that there is no focus on distinguishing between people who are just careless and those who are genuinely in trouble.

Why? If I have £20 quid in my hand, and someone tries to take it, I would stop them taking it if it was within my power, not let them take it and then try to punish them afterwards by taking back £50. Why would that even be an option? The whole policy is designed to fleece people. It makes no sense whatsoever except as a profit making tool. If people want a buffer they should have to agree it. If not then payments get refused. This system is wrong from the ground up.

[Sir Fynwy]

No it is not. It is setup to be punative to reap excessive profits for the banks. Like I said they can refuse to pay any bill or payment which takes you over your limit, but instead they choose to fleece you for £30 or so.

They would not be better off preventing the spending, as they would forego a huge profit stream.

People who go overdrawn generally pay about 12-18% interest on that agreed overdraft. So the banks are already making a large margin on that lending. The whole system is a mess designed to confuse the customer and benefit the bank's profits.

I take it you have money management issues .

[Bellend Sebastian]

If you put your cock in a mincing machine there's always a danger someone will turn it on

[hairy]

You guys seem to be missing the point here.

The OFT were set to investigate the 'unfair' charges the banks charge us for 'borrowing' their money without consent. As suggested earlier in the thread being chaged in excess of £30 for using their money does appear excessive and the OFT wanted to address the issue of the charges under fair competition laws

[lou]

I like the fact I went £150 over my overdraft and didn't get charged. The perks of student banking.

I wouldnt call being 150 quid over my overdraft a perk

[Jon the Hat]

I take it you have money management issues .

Ha, no I don't thanks, I am a qualified accountant and quite capable of managing my finances and affording any charges which I might incur. I simply find it depressing that so many people will happily be subsidised by others who can least afford it. How many of these same people happily condemn those who live on benefits as scroungers? Hmm?? And i still see no reason whatsoever why banks should be allowed to deliberately allow people to go overdrawn to be able to make profit, whrn they are quite capable of not allowing that person to go overdrwan at all. It is exploitation in it's simplest form.

[Sir Fynwy]

Ha, no I don't thanks, I am a qualified accountant and quite capable of managing my finances and affording any charges which I might incur. I simply find it depressing that so many people will happily be subsidised by others who can least afford it. How many of these same people happily condemn those who live on benefits as scroungers? Hmm?? And i still see no reason whatsoever why banks should be allowed to deliberately allow people to go overdrawn to be able to make profit, whrn they are quite capable of not allowing that person to go overdrwan at all. It is exploitation in it's simplest form.

I concur on the banks being able to stop people becoming overdrawn and stated that earlier but they're not forcing people to spend more than they earn. Banks make their main profits from investing and loaning out money that is deposited so why should people with positive balances not have cheaper banking?

[Jon the Hat]

I concur on the banks being able to stop people becoming overdrawn and stated that earlier but they're not forcing people to spend more than they earn. Banks make their main profits from investing and loaning out money that is deposited so why should people with positive balances not have cheaper banking?

No one is suggesting people in credit should be paying for people who are overdrawn - that is not happening. What is happening is people who have no overdraft but funds in the low hundreds or thousands are getting a free banking service. Most people do not kjeep sufficient funds in their account to justify this. Why would they? You get little or no interest. So canny people keep their savings in savings accounts, and limit their current account balances to the minimum. So how is the bank making enough to pay for these accounts? it isn't. It is cross subsidising.

Of course banks are not forcing people to overspend, but they are taking advantage of their collective monopoly power in a situation in which they are quite capable of protecting themselves and their customers by refusing the payment. Instead they choose to exploit their customers.

[Bellend Sebastian]

You're talking like a socialist, Jon.

I'm getting turned on

[lou]

I kind of agree with both sides a bit. Yes people should manage their finances better (and I have been guilty of not doing so myself in the past!) but I do think its wrong that banks let people go overdrawn when they can stop it.

If someones got real money problems they should be offering to help them (advice wise) not just charging them extra!

[Jon the Hat]

You're talking like a socialist, Jon.

I'm getting turned on

Ha. No I just like transparency in pricing.

[Sir Fynwy]

No one is suggesting people in credit should be paying for people who are overdrawn - that is not happening. What is happening is people who have no overdraft but funds in the low hundreds or thousands are getting a free banking service. Most people do not kjeep sufficient funds in their account to justify this. Why would they? You get little or no interest. So canny people keep their savings in savings accounts, and limit their current account balances to the minimum. So how is the bank making enough to pay for these accounts? it isn't. It is cross subsidising.

Of course banks are not forcing people to overspend, but they are taking advantage of their collective monopoly power in a situation in which they are quite capable of protecting themselves and their customers by refusing the payment. Instead they choose to exploit their customers.

The average current account in credit costs very little to manage, as you stated in earlier posts transaction charges are now minimal as they are 'touch of a button transactions', most people have very little interaction with their bank on a day-to-day basis. Charging for cash machine use is going to happen.

[Bellend Sebastian]

Ha. No I just like transparency in pricing.

Now you're really talking dirty. Phwooaarrr.

It's a bit of a side issue, and I'm not suggesting that people should be grateful they've been hit for a small fortune in bank charges, but I feel more sorry for the people who have no access to mainstream financial services

[Jon the Hat]

The average current account in credit costs very little to manage, as you stated in earlier posts transaction charges are now minimal as they are 'touch of a button transactions', most people have very little interaction with their bank on a day-to-day basis. Charging for cash machine use is going to happen.

True. A basic account in Australia costs AU$5 per month. The problem arises when you fund that by picking on a small % of users instead of a small charge on everyone.

[Tabou]

Orrrrrrrr....

People could not exercise their right to an overdraft, spend their own money, and not have 100's of things on credit with direct debits coming out of their arse.

I run a house, and a car, and don't have an overdraft. I work out exactley what everything costs, and I know what I earn, so if I want to buy something new, I'll know whether I can afford it. I understand that not everyone can meet every monthly cost ALL of the time, and that I am quite lucky in that respect, but if you cant afford things, dont have them.

Yes, £30 for being 22p overdrawn is exessive. But lets be honest, there are far more people thousands of ££££'s into their overdrafts with no hope of repaying....

[stez]

Orrrrrrrr....

People could not exercise their right to an overdraft, spend their own money, and not have 100's of things on credit with direct debits coming out of their arse.

I run a house, and a car, and don't have an overdraft. I work out exactley what everything costs, and I know what I earn, so if I want to buy something new, I'll know whether I can afford it.

Yes, £30 for being 22p overdrawn ius exessive. But lets be honest, there are far more people thousands of ££££'s into their overdrafts with no hope of repaying....

i hope you never lose your job, become ill, or have a massive, unexpected, bill for the house. life would be a treat if the unexpected never happened.

[Tabou]

i hope you never lose your job, become ill, or have a massive, unexpected, bill for the house. life would be a treat if the unexpected never happened.

I have Critical Illness Insurance and Income Protection for those eventualities. I do this for a living, so have seen both halves of the argument...but small mistake / big mistake scenario.

Small mistake - paying £50 a month for cover I may never have to use

Big Mistake - Getting Ill / unemployed / Having an accident and having no income.

I can see what you're saying though. But getting back on topic...if banks didn't levy fees for using unauthorised overdrafts etc, it would be the end of free banking...

Like I said...£30 charge for being £1 overdrawn is excessive yes. But £30 for being £2000 overdrawn isn't unfair, in my opinion.

[stez]

I have Critical Illness Insurance and Income Protection for those eventualities. I do this for a living, so have seen both halves of the argument...but small mistake / big mistake scenario.

Small mistake - paying £50 a month for cover I may never have to use

Big Mistake - Getting Ill / unemployed / Having an accident and having no income.

I can see what you're saying though.

and what if, say, you can't actually spare £50 a month? choise between paying for something that may never happen and paying for something i do actually need (ie power, water, food, fuel) i know where my fifty is going. i'm glad for you, that you can afford it.