First Direct has started the ball rolling

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Dead right. I'm fed up with all these whingers who complain about various penalties and particularly penalties for those who infringe the terms of their account. Cutting out these penalties means that we all have to pay. If someone breaks the terms of their agreement that's their problem, not mine.

Rob Graham

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Eh? AFAIAA First Direct have always charged on the bank account if you don't pay in a certain amount in each month. I was warned when I switched from their basic "current" account to the "bank account".

This is nothing new, and even FD say 85% of their customers will be unaffected.

Sounds like a typical Daily Mail story where a kernel of truth is blown out of all proportion in order to get readers frothing at the bit. And make a boring story a bit more interesting.

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They are allowed to charge penalties which reflect the cost of their error to the bank. Or do you want their penalties to subsidise your account??

Actually - what a good idea, we should apply the same to motoring. Fine people stupid enough to get caught by speed cameras and traffic wardens 2000 a time, then the govt could abolish road tax and maybe even petrol tax!

Seems fair enough for accounts that pay interest.

I think the main concern is that all the other banks will follow FD example and following on from yesterdays announced changing to cheque and online cheque clearance and that the banks will use charges to simply replace the illegal high penalties they will lose next year. They should have agreed to the sensible new clearing rules far earlier than this. If the banks had given the regulators the true cost of contacting customers about unauthorised overdrafts and charged something realistic, say 10 rather than the 30 or so they could have continued with that level of charge indefitnately. FD made 10billion profit last year so they can hardly argue they need more money. (not any other bank for that matter)

FD is part of a bigger bank and i bet this is simply testing the reaction and when nothing is done by regulators or government or pressure groups the others will follow thier lead. Making these charges on accounts with little income coming into them targets the less well off as well rather than say charges are needed for everyone of a smaller amount.

I'm sure a lot of people like to have a second current account for emergency use like I do. I doubt it costs them much to run dormant accounts, and they must make sales of other products to people who use them as a second account. They paid me 50 to sign up in the first place several years ago so it seems silly that they are now giving me two fingers.

Rob graham writes

Couldn't agree more. If necessary I will scrap my CC, like I did with Barclaycard when they introduced an annual fee.

Andy Pandy writes

I don't have a problem with raising speeding fines, but I'd prefer vehicle confiscation or licence withdrawal for those who repeatedly offend.

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Yes, I do. They don't have to incur them if they behave themselves.

I wouldn't say no to that.

Rob

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Well tough. For some reason the OFT didn't consider that "fair". Have you written to them explaining why you think it's fair that someone making a mistake should subsidise your account?

How about tax dodgers, why not use them to subsidise our taxes? Anyone who "forgets" to declare a few personal phone calls they made from work, or the fact they use company owned pens to write their personal shopping list, fine them 10,000, then the govt can cut income tax! Brilliant!

Exactly - this isn't about charging what it costs, it's about maintaining high profits after a particular rip-off was stopped.

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Unfortunately, people will always work at the far end of the lead. In other words, if there is no penalty for forgetfulness, then they'll make no attempt to keep themselves in check. If you ask someone to do something by a certain date, they will leave it until that date before they take action - human nature. What about all the forgotten hospital appointments? Costs the NHS thousands, millions, even. But there's no penalty for forgetting a hospital appointment. There should be.

And you think the OFT is level headed? They've got a job to do and they forget about the law of unintended consequences.

Such assertions tend to be based on the assumption that when a patient fails to turn up, the relevant staff sit around twiddling their thumbs.

Real life ain't like that.

"Andy Pandy" wrote

There shouldn't be any anymore, because OFT have "banned" them...

"Andy Pandy" wrote

Eh? Either it's a *charge* (eg "post-OFT") or it's a *penalty* (eg "pre-OFT").

If the amount "fairly reflected the cost" then it is a charge. Anymore, is a penalty.

Of course the true cost to the innocent party should be paid by the defaulter. But the question is, should an excess amount be charged as well, to "focus their minds"!

Just paying the "base cost" of their actions doesn't give an incentive to "toe-the-line"...

"linkuk" wrote

Are you sure? If that's true, then the average customer must contribute the following to profits :-

Wow!

I was wrong.HSBC made 6.6billion on a 6 month period. FD is part of hsbc. they are not alone of course as all the banks make a fortune in profits which helps fill the treasury coffers with taxes and why we shouldnt hold our breath for the government to try and change anything. I dont know what the tax would be on 13 billion but it would be sorely missed and perhaps mp's expenses might evev have to be reduced. But then against this isnt alice in wonderland.

What % of profits come from personal banking...?

What % of profits come from personal banking...?

The banks never give the figures, they just say "of course most profits come from our overseas operations". If they have no conscience they would issue them. It might be 51% overseas and 49% personal in which case they would "only" be making a mere 6.5billions a year. If you have the actual figures and show them here and the sources i would certainly consider changing my mind about banks. When a bank makes 13 billion profit every year it still take some justifying to charge the least well off on the pretence that its to get rid of dormant account but im happy to listen to the figures.

I thought they just banned excessive penalties. Like 20 plus 5 a day for going

What, so a "charge" can only cover costs? No profit? Interesting definition.

Close their account then.