Just In...OFT wins

[BoredBloke]

The charge is supposed to reflect how much it costs the banks to provide a service - the fact that they were making millions in profit from these 'charges' indicates that this is not a true reflection of their cost.

This month I got a £25 charge because a DD went out and I was £60 short in that account. I spotted it on the day it went out and moved money into the account to cover the £60. But becuase for a number of hours on that day my account was £60 od they have charged me £25. So I will heading back to the HSBC to get that refunded.

[lilelvis2000]

The charge is supposed to reflect how much it costs the banks to provide a service - the fact that they were making millions in profit from these 'charges' indicates that this is not a true reflection of their cost.

This month I got a £25 charge because a DD went out and I was £60 short in that account. I spotted it on the day it went out and moved money into the account to cover the £60. But becuase for a number of hours on that day my account was £60 od they have charged me £25. So I will heading back to the HSBC to get that refunded.

Ridiculous! Should OD this not be based on the closing balance?

[Dow Jones]

Too little - too late

This has been long overdue. OFT should have sorted it out ages ago in the same way it did with the credit card charges, ie put a cap on those too.
There is no need for banks to charge customers per se - what they can do is (like their European/American counterparts) charge for things like lost PINs/replacement cards/other requests - not monthly fees or ATM cahrges as they are suggesting. Most of us have one or more on-line accounts which they don't even generate and mail statements for, so costs are minimal.
I believe there should be a cap of max £ 10 per item/per day for returned cheques and DDs, so that customers do not blatantly ignore them, then again are not unfairly penalised. It's like getting a £ 100 parking ticket, the punishment too harsh for the alleged crime.
Correct me if I am wrong - bank charges in France/Germany for similar things are in the region of 4-5 Euros and like 3 Euros for a letter to advise.
Afraid the banks will use the 'credit crunch' as an excuse to plead poverty and threaten to withdraw accounts and mortgages from anyone classed as a 'difficult case'.

[NotAllThere]

Correct those of us. including me. Pay charges to pay for other's free banking. I read something on this two years ago..when all this was just starting...that the poorer customers (about 10%) are paying for the other 90% free banking! Should it be other way around if this was truely a just society? (those figures are just a guess and fuzzy)

Only if your a socialist

You'll probably find that the banks will simply have a minimum balance, below which you pay charges. People with a few tens of thousands probably make enough for the bank that free banking isn't a loss for the bank.

In my view, the careful poor are going to be the losers on this one.

[NotAllThere]

...what they can do is (like their European/American counterparts) charge for things like lost PINs/replacement cards/other requests - not monthly fees or ATM cahrges as they are suggesting. ... bank charges in France/Germany for similar things are in the region of 4-5 Euros and like 3 Euros for a letter to advise...

Swiss banks charge a monthly fee, atm charges, online payment charges etc. But, e.g. with UBS, balances over 10000 Francs (about £5000) get much of this back.

In France, "...the penalties for going overdrawn are so tough [almost akin to going bankrupt in the UK!] that a cheque alone is accepted. Do not go overdrawn! You must keep your French bank account in credit."

[Mailman]

The charge is supposed to reflect how much it costs the banks to provide a service - the fact that they were making millions in profit from these 'charges' indicates that this is not a true reflection of their cost.

The Judge leaves the door open for you to challenge the bank on the fairness of the charge but not that its a penalty (although, para 326 and 327 sorta contradict 325...or was that 323? )

Anyway, also noted by the Judge was that banks had made about £3billion profit from .6billion worth of unauthorised overdraft-ness!

Feck, if only I could run my business like that...give out £6 and receive back fecken heaps!

Mailman

[SandyDown]

teeheee - At the moment, I am actually inovled in one of them project that would ensure banks are transparant with their charge. The bank am contracting with now there are at least further 3 projects that are planning what to do when they lose this case (yes they were all expecting to lose the case).

However, sadly I think nothing is going to be detemined yet, I know most banks have been preparing for an appeal already, so expect the case to drag in the courts for ever!!

The way I see it, the FSA will start regulating retail banking more heavily ..i.e. we are going through Basil and MiFiD like regulations for retail banking - at the moment such regulations (being fair and transparant to customers) are sort of voluntery (but not really voluntery if you know what I mean) and being governed by the Banking and Building Society Association.

[lilelvis2000]

The way I see it, the FSA will start regulating retail banking more heavily ..i.e. we are going through Basil and MiFiD like regulations for retail banking - at the moment such regulations (being fair and transparant to customers) are sort of voluntery (but not really voluntery if you know what I mean) and being governed by the Banking and Building Society Association.

Isn't it Basel II? There is a project on at CFS on this.

[lilelvis2000]

Swiss banks charge a monthly fee, atm charges, online payment charges etc. But, e.g. with UBS, balances over 10000 Francs (about £5000) get much of this back.

In France, "...the penalties for going overdrawn are so tough [almost akin to going bankrupt in the UK!] that a cheque alone is accepted. Do not go overdrawn! You must keep your French bank account in credit."

I understand it is a criminal offense to issue a rubber cheque in Dubai.

[lilelvis2000]

Only if your a socialist

You'll probably find that the banks will simply have a minimum balance, below which you pay charges. People with a few tens of thousands probably make enough for the bank that free banking isn't a loss for the bank.

In my view, the careful poor are going to be the losers on this one.

They'll make up for it by raising loan rates and mortgage rates. People just scraping by will have to get by with a no-frills account. No debit card, no cheque book, no charges.