Bank Charges.

  Pine Man 10:11 01 May 2007

It now seems likely that free banking as we know it is coming to an end and we could all end up paying for our current accounts.

This is being brought about as a result of thousands of bank customers claiming back all of the 'unreasonable' charges that were levied by the banks for unauthorisd overdrafts.

Now call me old fashioned but if you enter into a contract with a bank and agree to pay the specified charges if you go overdrawn, why should you now expect to get them back?

I have read the arguments from both sides in the press but ultimately I, who have never overdrawn, could now end up having to pay for banking.

What does the forum think?

  laurie53 10:17 01 May 2007

I must admit that while the charges are high, I was thinking along those lines myself.

On a similar vein, when energy charges were going up just about every week I took up an offer to have my rate frozen for a few years.

Now that rates are coming down should I complain to Energywatch that I am being overcharged? I don't think so.

  €dstowe 10:36 01 May 2007

We already pay for our banking, whether in overdraft or not.

Any money you have in your account is not sitting in the tills at your local branch waiting for you to come along and collect it, it is earning interest for the bank by being invested elsewhere. The interest it earns is far in excess of any you may get from "interest earning" current or savings accounts.

What the banks should be saying is that customers will be paying MORE for their accounts. Of course, they won't do that.

To say the reason for this change is due to the claims being made on banks for excessive charging on personal accounts doesn't ring true. The few quid being claimed is negligible compared with the multiple billions in profit made by the banks each year.

  picklsey 10:45 01 May 2007

simple really the banks are breaking the law and they know it.they are allowed to make a fair charge for defaults on accounts not £35 or more.i,m all for any buissness making a good profit, but there is profit then there is profiteering.

the office of fare trading or some goverment department is looking into the charges (hmmmm),now if they are found to have been making unfair charges as the law stands just now will charges be brought.

  Pine Man 11:25 01 May 2007

laurie53 makes a good analogy.

€dstowe. I agree that we are 'paying' for our current accounts already but this applies mainly to the big banks. I get about 5% on my current account and free travel insurance. I used to be with Barclays who paid me 0.1% on my current account!

picksley. I didn't think they were breaking the law more like 'bending' it!

  spuds 11:28 01 May 2007

It wasn't just a case of unauthorised overdrafts, but other banking services as well. In the old days, communications between banks and their customers was more human to human contact in the form of letter writing or telephone contact. Nowadays the human contact element as been reduced considerable by computer installations.

Academics and Analysts have looked into this issue, and their findings have drawn a conclusion that charges of £30.00 more or less, are not in the publics interest, when it costs the banks no more that £2.47 to administer the letters that are sent out. Remember also, that administration and interest charges may also incur further interest charges and fees, to the point that the slight 20 pence over the agreed arrangements, can result with a claim of extremely high proportions ( debt incurring further debt). Other services and charges can involve something like 'bounced' cheques, something perhaps not of your making, but you may pay for!.

Banks are not a charity, and they never will be, irrespective of what the brochures and other publicity may or might suggest. But looking at some of the practises and services provided, can (and perhaps now is) lead to general public 'revolt'. I say public, but this can mean business's large and small. Regarding charges, this as been on the cards for ages, and some accounts already have administration fees. A number of years ago, Barclaycard started to make a fee charge for people who didn't reach a certain monthly/yearly spending limit. This was discontinued, because people started to move their credit card accounts elsewhere. If all the banks follow the same account fee charging procedures, then the public may have no alternatives. If some banks remain a 'no fee' service, then this could cause serious headaches for some, if not all major banks.

Regarding bank charges, I have just recently undertaken an investigation survey on personal loan interest charges. It became very evident, that certain loans provided by the same banking group, can involve very different rates of interest depending on a possible risk factor.Using a comparison list for a £5000.00 unsecured loan over 48 months, can vary from 6.2% (credit charge £640) to a whopping 99.0% (credit charge £10,130). The 99.0% interest was not by a fly by night shark loan dealer neither. When a bank can give a customer 0.05% (or less) interest on personal savings, then as pointed out previously, the banks are not some long suffering low funded charity. They are still using someone else's money.

  riiverstock 11:40 01 May 2007

Like pawns playing their part on the board how can anyone defend the gross and immoral profits made by the banks and monopolies like Microsoft.

The law,including our tax laws, are designed to fit the needs of big business so there is very little bending required.

Too many within this kingdom love to play the king's fool!


  Teaboy 17:07 01 May 2007

Who needs a bank account? In my younger days the majority of people managed perfectly well with an interest earning savings account and cash. It is my considered opinion that should the banks introduce charging for current accounts very many people will revert back to saving accounts and cash- me first in line.

  Kate B 17:15 01 May 2007

Not very practical for paying bills!

  Forum Editor 18:06 01 May 2007

"The few quid being claimed is negligible compared with the multiple billions in profit made by the banks each year."

All it takes is one proper court case (there hasn't been one yet), and those 'few quid' will become hundreds of millions. That's why, so far,none of the banks has contested a reclaim.

They know the writing's on the wall however.

  Forum Editor 18:11 01 May 2007

"how can anyone defend the gross and immoral profits made by the banks and monopolies like Microsoft."

I can.

First of all, Microsoft doesn't have a monopoly.

Secondly, businesses are in business to make profits - that's the whole idea of a commercial enterprise. Shareholders demand a return for their money, and the directors of a PLC have a legal obligation to maximise profits for shareholders.

Thirdly, you can't have a king's fool without a king. In case you hadn't realised it, we have a queen, although I haven't the faintest idea what all that has to do with Bank charges.

You used to some out with all that stuff when you were someone else - don't start again, please.

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