I have trounced the bank!

[Scuttler]

Originally Posted by Mark Davies

Now don't be silly. The amount of money banks make from personal account charges is absolutely minute compared to what they make from corporate banking. These charges you are reclaiming barely even register in their accounts, so the suggestion you are subsidising anything is just plain fantasy. That's not how banking makes its money. My banking services are more than adequately funded by the interest the bank makes on the loans it can give secured against my account balances. Your charges have sod all to do with it. [/color][/font]

Whilst I don't disagree that the bank makes more money on corporate banking to say that bank charges barely register is naive in the extreme!

Last year the top five banks made £32bn in profits last year or £6.4bn each. The top six banks were estimated to have charged £4.5bn in "penalty" charges last year or £750m each. That equates to 11% of their profit. You could probably lose 1% in the costs that the bank actually have to cover in the event of an event (which would trigger a penalty charge). 10% is still more than "barely registering".

Furthermore, the banks have already stated that if they'll start charging people for banking if they can't recoup the "costs" through penalty charges. That in most people's book is what is known as subsidising.

Sources:
Bank Charges: Reclaim them, they're unlawful. STOP PRESS! Major OFT / Bank announcement....
Analysis: Bank charges and free banking | This is Money
http://www.libdems.org.uk/economy/ho...rges.6289.html
BBC NEWS | Business | Banking on record profits

[Mark Davies]

Originally Posted by Scuttler

Last year the top five banks made £32bn in profits last year or £6.4bn each. The top six banks were estimated to have charged £4.5bn in "penalty" charges last year or £750m each.

I've checked your sources and see that these two figures have been plucked from two old BBC news reports from 2006, and that the charges figure is an estimate and there's no explanation of what basis that estimate is made, or exactly what it includes - so not a definite source, really.

But that aside, you have to remember that the profit figures stated are just for those posted in the UK, which are a fraction of the total profits of what are global financial organisations - and that the charges we are talking about are peculiar to the UK and so do not reflect equally worldwide. So, my point still stands, as far as these banks are concerned the amounts of the charges are not that significant in the big picture.

The banks are not using these charges primarily to make money (though of course any income is always welcome). They use them as a penalty to discourage people from operating their accounts at the margins - and it is exactly that punitive element of the charge that makes them illegal.

Banks make money mainly from lending and charging interest. The more they can lend, the more interest they make. However, the amount of money they can lend is limited by the funds they hold - your money and my money in our accounts. They can actually lend out far more than they hold, but that is strictly and legally limited by restrictions imposed by The Bank of England - but there is a direct correlation to the balances, and what the banks can lend is calculated on a daily basis. They don't like it if you go overdrawn without notice because they run the risk of exceeding those limits. Each day the banks have to set aside huge 'reserves' of their lending capability as a contingency against these unexpected lendings - they have to because if they exceed the limits imposed by the Bank they face enormous fines. These 'reserves' are a problem only because they are unpredictable. They can recoup the earnings on what you borrow by charging high rates of interest (which is perfectly legal) - the headache is that they don't know they are coming or exactly how much, so have to over-compensate, just in case. It's that buffer element that is wasted earnings potential, and that's why they would much prefer you to arrange your overdraft - it eliminates the buffer element.

So, these charges are not about making money - they are a fine, designed to be a deterent to people operating accounts on the fringes. It's exactly that punitive element that raises the whole issue. They have no authority to 'fine' you - that's why the charges are illegal.

So it really isn't a structured way of funding the costs of operating personal banking at all. You've not simply been subsidising everybody else - as though if you were not paying these charges then we would have to pay in some other way - properly managed accounts finance their own running costs. So no, I'm not accepting the notion that really you've been doing us all a favour by mismanaging your finances.

However, once banks do have a source of income, however small, they do hate to lose it. They're always looking to their bottom line and those tiny percentiles do make a difference in the global stock markets. So now that you're closing down this income stream no doubt the rest of us (who have always handled our accounts properly) will have to face some extra charges. Thanks for that.

But still, enjoy your 'well deserved' little windfall, won't you?

Which comes back to my original point - how ironic!

[Scuttler]

The charges estimate is much publicised from a variety of sources which include ex-senior banking officials. The profit is a profit which is reported by corporate. The fact remains that as a percentage of the reported banking profits the figure is correct and has not been disputed by the banks. You can choose to ignore it. That is after all your prerogative. Personally I believe that the charges are something which the banks have come to expect as part of their annual revenue.

I do however take offense at your self-righteous slight that I have 'mismanaged' my finances. How bloody dare you! You don't have a clue what you are talking about. You have no idea of the circumstances which brought about the charges of any of the people currently claiming. Who are you to cast aspersions on the ability of individuals to manage their finances? You are bang out of order. Whilst I can accept that possibly a significant proportion of people may have mismanaged their finances leading to charges, however to pass a glib sweeping comment of "incompetent financial management" is one borne out of blindness to anything but your own circumstances.

It's easy to pass judgement on people when you're not or never have been in their shoes. I hope that you don't find yourself in the position that I was in or for that matter situations that other people have been in. But if you ever are perhaps you'll realise that you can only plan so far ahead and there will always be an event you might not be able to predict or cover for.

Apologies to Frog for contributing to the deterioration of this thread.

[Arfie]

Originally Posted by Mark Davies

But still, enjoy your 'well deserved' little windfall, won't you?

It's hardly a windfall nor is it profiting from financial mismanagment as you stated earlier, it is a refund of illegal charges that have already been paid. No profit is being made, no free money, simply a refund of money incorrectly charged.

These fees have been supporting free banking for those like you, who manage their accounts properly for years, so perhaps simply thanking us all would be more appropriate than pious lectures

Arfie

[Mark Davies]

Originally Posted by Scuttler

I do however take offense at your self-righteous slight that I have 'mismanaged' my finances. How bloody dare you! You don't have a clue what you are talking about. . . . . It's easy to pass judgement on people when you're not or never have been in their shoes.

Who do you think I am, Bill Gates? Why on earth do you make the assumption that I haven't been in your shoes? You think you are the only person who ever had money difficulties? You have no basis whatsoever to assume I don't know what I'm talking about.

The fact of the matter is that I do. There have been times when I've been unemployed and saddled with huge outgoings left over from a terminated business - with financial commitments well beyond my income. Even then I never went overdrawn without authorisation. And now we have the odd emergency that means I need to spend more money than I might have. I still don't go overdrawn without authorisation. If I can manage it then there's no reason why anybody else can't in any other circumstances.

Fine, if your employer suddenly doesn't pay your wages there's not a lot you can do about that, but that's not going to be happening regularly - and if it does then my argument is that you should have facilities in place in preparation. The first time it happens is pretty much your clue to do something about it so it doesn't happen again - like I did in the example I gave. When we are talking about people reclaiming literally thousands of pounds of these charges then they must be regularly letting it happen and apparently doing very little about it.

It's your money, your account, your responsibility. I know very well from my personal experience that these charges can be avoided (indeed, should be avoided) with a little effort on your own part. That's my view - be all indignant about it if you like - but I fail to see how regularly allowing your account to go overdrawn without permission can be viewed as anything but mismanagement. It's practically the definition of it!

Or maybe your charges were incurred by some other mechanism?

Originally Posted by Arfie

No profit is being made, no free money, simply a refund of money incorrectly charged.

These fees have been supporting free banking for those like you, who manage their accounts properly for years, so perhaps simply thanking us all would be more appropriate than pious lectures

I never meant to suggest it was profit as such - I appreaciate it's your own money and pretty much akin to an enforced savings scheme. I merely said it was a windfall - which it is. And it was never intended to be a lecture. I simply pointed out the obvious irony of it and then have been forced to defend that view to those arguing against what seems to me to be the blatantly obvious!

[milldog]

Originally Posted by Mark Davies

So now people will basically profit from incompetent financial management

Total Bollocks this is like saying i know a copper who bent so you must make enough money from your bribes to cover this as all coppers are bent and would fold for few quid! and Yes i have done the fifty quid in the driving licence when stopped for speeding, I get told off but never the money back!! and no points.

when i was in the forces pay wasn't an issue and it was guaranteed however since working for the civilian sector on contract some of these firms bounce cheques on you, which has a ripple effect. For example

TMA Global in Plymouth went to the receivers after giving me a cheque for £29,000 this bounced but i had already paid contractors and staff and their checks bounced and they incurred charges as a business i can only put a small charge on for none payment and interest which is far less than Lloyd's £60 charge or Barclay's £45 charge. as a company we paid there charges for them but if they can reclaim them then well done.

As a company we have about £2,000 worth of bounced cheques and recalled DD's which the bank charges me for i pay £175 to set up a business overdraft if the shite hits the fan again,

if you work in this field of contracts and cheque payments and it is getting smaller thank god but companies will bounce cheques on you and that will have a ripple effect, both in business and if your a sole contractor with just yourself to worry about.

But just a note i deal with the forces and police service the amount of people both from the parties that dont pay me (because of what ever reason tight month overtime being changed whatever,) dont get charged £60 from me and will happily owe me money rather than the bank! can you honestly say you have never put someone off untill next month? i think not

Graham

[Adrian Kelland]

Originally Posted by milldog

Total Bollocks this is like saying i know a copper who bent so you must make enough money from your bribes to cover this as all coppers are bent and would fold for few quid! and Yes i have done the fifty quid in the driving licence when stopped for speeding, I get told off but never the money back!! and no points.

when i was in the forces pay wasn't an issue and it was guaranteed however since working for the civilian sector on contract some of these firms bounce cheques on you, which has a ripple effect. For example

TMA Global in Plymouth went to the receivers after giving me a cheque for £29,000 this bounced but i had already paid contractors and staff and their checks bounced and they incurred charges as a business i can only put a small charge on for none payment and interest which is far less than Lloyd's £60 charge or Barclay's £45 charge. as a company we paid there charges for them but if they can reclaim them then well done.

As a company we have about £2,000 worth of bounced cheques and recalled DD's which the bank charges me for i pay £175 to set up a business overdraft if the shite hits the fan again,

if you work in this field of contracts and cheque payments and it is getting smaller thank god but companies will bounce cheques on you and that will have a ripple effect, both in business and if your a sole contractor with just yourself to worry about.

But just a note i deal with the forces and police service the amount of people both from the parties that dont pay me (because of what ever reason tight month overtime being changed whatever,) dont get charged £60 from me and will happily owe me money rather than the bank! can you honestly say you have never put someone off untill next month? i think not

Graham

Your last paragraph reinforces Mark's argument somewhat Graham.

If someone does not pay you, you have to cover their costs in the meanwhile. This is an uncertain amount with uncertain consequences. So how much do you put aside to cover the cost before YOU have to pay charges.

The amount of money you cannot plan for may be smaller than the banks, but the effect on you is of a similar nature to that of the banks should they be fined for over lending. The banks just make a charge, you don't.

The reason that you have customers happy to owe you money (of course they are happy) is that you are lending them money at no cost to them, only cost to yourself. The banks won't do that.

Adrian

PS. Re bent coppers. It's best not to try to use analogies in arguments as they are usually not as analogous as they might seem. To quote an old teacher 'I love analogies, the're just like gold bars.' The police force does not make money, so they don't need bent coppers for the income. Very much the opposite.

[milldog]

Originally Posted by Adrian Kelland

Your last paragraph reinforces Mark's argument somewhat Graham.

If someone does not pay you, you have to cover their costs in the meanwhile. This is an uncertain amount with uncertain consequences. So how much do you put aside to cover the cost before YOU have to pay charges.

The amount of money you cannot plan for may be smaller than the banks, but the effect on you is of a similar nature to that of the banks should they be fined for over lending. The banks just make a charge, you don't.

The reason that you have customers happy to owe you money (of course they are happy) is that you are lending them money at no cost to them, only cost to yourself. The banks won't do that.

Adrian

No we charge £20 for bounced check and DD's Half what we get charged as a deterant perhaps we should stick it to the public at £40 for the cheque charge

we have a rolling £17,500 overdraft facility for crap like this

But what your saying is it's ok to go overdrawn with me but not the banks!!

complete bollocks

Graham

[Adrian Kelland]

Originally Posted by milldog

No we charge £20 for bounced check and DD's Half what we get charged as a deterant perhaps we should stick it to the public at £40 for the cheque charge

we have a rolling £17,500 overdraft facility for crap like this

But what your saying is it's ok to go overdrawn with me but not the banks!!

complete bollocks

Graham

No, I did not say it is OK to go overdrawn with you.

I gave a reason as to why someone would prefer to go overdrawn with you rather than the bank. You are cheaper. You even admit to only passing on part of the bank charges. How can you be sticking it to the public for a charge, when it is their action, not yours, that has caused the charge?

Now it could be that you keep business through your goodwill. Perhaps you make more money from a larger customer base with your overdraft, than with a smaller customer base that pays on time.

Adrian

[milldog]

Originally Posted by Adrian Kelland

No, I did not say it is OK to go overdrawn with you.

I gave a reason as to why someone would prefer to go overdrawn with you rather than the bank. You are cheaper. You even admit to only passing on part of the bank charges. How can you be sticking it to the public for a charge, when it is their action, not yours, that has caused the charge?

Now it could be that you keep business through your goodwill. Perhaps you make more money from a larger customer base with your overdraft, than with a smaller customer base that pays on time.

Adrian

OK lets look at the real reason if they dont pay me we will arrange a payment plan and get the money back yes we will charge the £20 but the one thing we wont do is stick it on a credit agency somewhere.

We charge the £20 for two reasons 1. it helps cover our cost and 2. why charge people money which they haven't got you will create a problem which is what the banks do

example your a contract worker you get paid by cheque the cheque bounces and so do 6 DD's from your bank that £60x6=£360 plus the charges from the company's that you bounced the DD from lets say they are all like me and just charge £20x6=£120 so before you have ernt anything next month you have a bill for £480 which will be taken as soon as the money hits the account then £480 is allot of money to the average person you have more charges and so it continues

however if the person had a gold account there would be no charges because that account doesn't have them. but they cant have the gold account because they have bounced DD's or that they haven't been with the bank that long!

my gold account cost me £10 per month is it worth it yes other people cant get these accounts for whatever reason so they fall prey to the banks, and end up with charges i think mark is a conceited prick it's not profit it's money they have been wrongly charged and if you look at the cases it's bank charges for admin alterations NOT interest for being over drawn thats extra.

it's like being overcharged for something, you would ask for your money back if not i have a 6230i phone for sale cheap for you £800

Graham