Bank Charge Victims Offered Pay-offs

Anyone who can incur 13,000 pds in charges probably should not be allowed to have a bank account.

Yeah, now we'll all get charged to subsidise the feckless who can't keep within their limits.

Tiddy Ogg.

They should since they pay for free banking for the rest of us! Or at least used to.

I think you have it the wrong way round!

I'm inclined to think that they are allowed to be desperate.

It's one thing for the authorites to decide that their charges are unlawful, it's quite another for them to say nothing for

IMHO the rot set in when Bank's decided to compete on their 'core' product - the interest that they charge - and competition drove this down to levels that are unprofitable.

This was, I think, started when foreign banks (and non banks) entered the market with offers whos business model was based upon, low interest/high penalty charges and, unsuprisingly, these offers advertise better to the average punter.

With hindsight, the High Street banks would have done better to have themselves challenged this model as unlawful (which IMHO it is) rather than lazily acting like a bunch of sheep.

ISTM that Banks are there solely to lend money. They should cost this product properly. They shouldn't be selling it as as a loss leader to try to get customers to whom they can sell other products, which in reality they have no business in selling at all.

tim

In message , tim..... writes

Many non clearing banks do just this of course.

Clearing and other high street banks also provide a money transmission service and perform the maintenance of the notes and coin issue on behalf of the Bank of England.

The classic Banking model (completely unknown to most modern day so called 'bankers') is to strive for the bank charges levied to cover all the running costs of the bank and so the margin on borrowing/lending would be all profit.

Every quarter, the local Mainwaring would scan through his printout of account holders' transaction charges arbitrarily marking accounts with an extra £50 or £100 fee. Of course this was also the days of overdraft limits being marked on accounts which clients never knew about which gave them the ability to go overdrawn without a formal agreement.

When supposed 'free banking' for private accounts was introduced the lost dosh had to recouped from somewhere and the inevitable happened. Together with the disastrous idea to deregulate the Building Societies the result is the mind set a lot of the population have today, i.e. they dont see why they should 'have to pay to get their own money' and expect to get everything for free.. The Government & MPs have given credence to this ridiculous expression.

When 'personal free banking' was just an idea, and I cant remember exactly when this was,( late 70's?) all of the clearing banks had developed their products but nobody wanted to be the first to do it and the products lay on the shelf for quite a long time until the first bank caved in. Again I cant remember which bank it was, but everybody else jumped in as well almost right away.

Anyway back to your last point, I dont think domestic lending is offered at a discounted rate (excluding mortgages), the figure to check is the net margin over base rate and I would say that is as healthy as ever and is not being used to subsidise anything. I havent got figures to hand, it is just my impression. It is the charges that are currently levied and commissions received from ancillary products that subsidise the current account money transmission service.

The idealistic answer is to charge a realistic amount for personal banking services let those who wont pay bugger off somewhere else. The reduced number of customers would see their bank charges being used to train staff properly to provide a proper service and to stop 'selling'.

National Giro was the first, if you count that as a bank.

I presume you mean 5 or 10 shillings. In the days of manual operation of accounts, 50 pounds was more than someone earnt in a month.

tim

I forget that you go back so far John :-(

But I think that the 'free' banking when in credit worked financially, whilst it was funded by the interest foregone on the money. Interest rates were relatively high at the time and there must have been a lot of 'income' this way.

I can find lenders at 6.5% and deposit accounts at 5.35. This difference just doesn't look enough to me. (Not that I have any idea what the costs of running a loan compay are, I just recall that historically the difference was larger)

I currently 'pay' 150 pounds for my 'free' account. For the amount of work that I ask them to do (a few DD's and a statement a month) that seems sufficient. I realise that there are some people who make more demands on their bank, so what is a fair way of charging?

tim

But it is not the work that a supplier of goods or services performs which determines the price of the good or service, but the value to the purchaser.

Hear ! Hear !

) Ah! Thank you, but I was really meaning a 'normal' bank.

Useless piece of information No 234(b) - My school was next door to the National Girobank. Now isnt that interesting? :-)

In message , tim..... writes

Not shillings, but perhaps I should have knocked a zero off!

In message , tim..... writes

This was only an interim structure and, as you say, only worked when base rates were high. Banks never really offered decent savings rates, that was a job for b/socs and at one time there were only two types of account, current & deposit (the latter operated via a passbook system)

You have picked two extremes, you will see I said 'net margin' which means the difference between all the interest paid and received expressed as a percentage of liabilities and assets. This margin is pretty constant.

Yes, I pay similarly and get super offers like being able to book theatre tickets (!), but the free worldwide annual travel insurance is a big bonus.

Current market research seems to indicate there is quite a degree of customer acceptance for these fixed fee 'added value' premium accounts. I think that for most people the old way of charging per transaction isnt now fair because nearly all transactions are paperless and the added variable cost per transaction is virtually nil. Businesses are often charged on turnover but that would inequitable too. I think a fixed flat fee would be fair for a which a menu of services would be provided, pretty similar to what you and I appear to have now.

I was referring to the interest that I lose on the money in my account.

tim

In message , tim..... writes

Sorry, I misunderstood. I dont lose any interest because I use internet banking to ensure my current account balance is always >£0.01

or of course you could get the bank to do this automatically for you, ours are free for monthly, £8pm for weekly, something more that i cant remember for daily.

Ian

It's not ridiculous!

In message , snipped-for-privacy@gmail.com writes

Mine wont do that. Monthly is of no use to me because it is only my monthly expenses that are in the bank's savings account, the rest is elsewhere on higher interest accounts.