Bank Charges

[Mike]

There has been alot in the paper recently about how people have been reclaiming Bank Charges by classing them as 'illegal'. However, the banks seem to be striking back by threatening to close some customers accounts and withdrawing and overdraft facility. I don't know if the media are misrepresenting the cases or it is an intimidation tactic, if the latter it is pretty poor.

[mr_e]

Well, the banks are there to make money, after all. Most accounts also have a clause that states overdrafts can be removed at the bank's discretion, so legally they're okay. Morally, it's not so good. Having said that, if you can't manage your finances to avoid relying on money you don't actually have...

[liz.brownlloyd]

Catherine in work has claimed back approximately £2500 - I am sure she won't mind me telling you this - and she knows someone who's claimed £6000.00. Obviously the banks are reliating because they will lose millions.

[Mike]

I am amazed that they managed to charge her £2500 in the first place! That is amazing amount of money. I hope she treated herself when the cheque came in. :D

[mr_e]

That is a crazy amount of bank charges. I assume that's over a long period of time, as I don't think you could go overdrawn about 70 times in a year...could you?

Hmm...I remember someone estimating the actual cost of returning a payment, going overdrawn or whatever: it was about £5, possibly. Aha, link to a BBC article here. That'll be why they can't justify them in court as not punitive, when most charges are at least five times that (we may have discussed that in another thread as well)

I must also apologise for my slightly arsey post before, as it's all swings and roundabouts: those people who are overdrawn effectively pay the interest on my savings account, etc etc.

[Mike]

. . . .if you can't manage your finances to avoid relying on money you don't actually have...

We can only assume that you will be saving up over £100,000 to get onto the property ladder then I agree with the principle but sometimes things get in the way, I would imagine that you would have to be overdrawn for a long period of time to get such high charges, but then sometimes you make mistakes . . . . I have been charged for going overdrawn before now, I got the charges canceled because I noticed and went into the Bank to sort it out!

[johnriley1uk]

The problem is that people who are not well off get overdrawn, get charged £30 per day for the privelidge of having no money, get more overdrawn and are sucked down into a spiral of debt from which there is no recovery.

This is, I think, unreasonable and irreseponsible, as once it starts there could be no escape.

On the other hand, if one is perniciously overdraw because all one's dosh is in high interest accounts and one would rather not transfer it in time, then maybe one should read the small print and play the game fairly and the charges are fair.

I think fair discretion on the part of the banks could be in order.

[Lizzie]

I have to wonder though, why the banks allow people to go overdrawn illegally. I thought it would make sense just to reject payment and then to contact the customer about arranging reasonable terms for an overdraft. If my understanding is correct the high level of charges occur when overdrafts are taken without prior arrangement, in which case if you stop this happening then you stop the charges accruing.

Saying this, from my experience the level of charges levied for services (and in particular mortgages) are significant, although banks are businesses and there to make money and as such are subject to market forces. In essence although I don't like it I suppose I have to pay for the service they provide and if my bank is rubbish there's always the option of changing banks. If enough people do it, then the charges will have to be lowered.

[johnriley1uk]

Fair points, Lizzie. The banks would probably ask would you rather a payment be refused because you'd made a slip up and your name thus be sullied, or that they honour your cheque because they know you'll put it right?

Moot point for many I suspect, but personally I'd prefer them to pay and then give me a call. No charge unless it became a habit, all part of the service...That's old-fashioned banking, when I knew my bank manager and the assistant manager and arrangements could be made on a handshake.

Then "points sytems" came in and the whole thing became regulated by computer. Is this better? Worse? Who knows, it's different anyway.

An accountant would always be well received at a bank, just like doctors, even architects. Now we are all a computer number.

[John Knight]

Did you know the collective name for a group of people who work in a bank is a wunch?

[Mike]

I did not know that. . . .

[johnriley1uk]

There's no such thing as a free wunch.

[mr_e]

Did you know the collective name for a group of people who work in a bank is a wunch?

I saw this a couple of hours ago and though "wtf!?". Now, I'm chuckling: spoonerisms for the win!

[Claire]

I do internet banking regularly, and mistakenly put £4000 on a transfer to pay my credit card bill, instead of £400. Obviously, Lloydstsb refused payment and said they'd charge me £35 for the privilege of telling me. But i called up and explained the situation and they waivered it cos it was an honest mistake. i thought this was pretty good. but you can save a lot of money if you just put in a bit of time and effort. for my car insurance, i've played Tesco off against Direct Line and Tesco offered to match the price i could get at DL on installments, £358.05. but because DL do 0% and Tesco don't, the Tesco price was also to be £358.05 on installments - inclusive of their interest charges - but they gave me the lump sum option of £325!!!! so from an initial renewal of £411, it's gone way down!!! Likewise, i got 25% back on a faulty wardrobe from Next but then wrote a stinking letter and got another £50! you gotta be cheeky!!!!!

[mr_e]

They were essentially going to bill you for trying to give them too much money? At least they saw sense to waive it, which is reassuring as I've banked with them for ages.

Being cheeky is definitely financially beneficial, as far as consumer dealings go.