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Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 10.46
by Pete
DVB Cornwall wrote:Most banks are operating faster payments now so the clearing argument can be cast into history as well.
Well, Lloyds TSB don't, and even though they started it over the phone they've now ditched it again. ING Direct also hold my money hostage for three days and while we're on the subject, exactly why does it take five days to pay a credit card bill? Why is the "date of payment" the sixth when even if you pay i cash in the store the card is attached to it still apparently takes five days? Why is it not set as the first? It's lies.

As for charges, I think the issue isn't so much the charges themselves but the manner in which they are applied and their size. I agree that there is reason to punish those who go over their limit.

However, if one goes over their £1500 overdraft limit by £1.50, how exactly is fining them £30, then another £30 admin fee, then another £30 for two more days whilst they try and scramble to get money from another account to pay it which they can't do due to the arbitrary time delays on accounts.

Then, because of the preposterous £120 fine in month one due to the grand sin of £1.50, the person remains overdrawn in month two and gets another whack of stupid fines. That's the issue.

It's like being put in prison for six months for stealing a cake. And then every month getting another 4 month sentence for the crime of "being in prison".

That's the issue, not the simple giving the fines.

If a bank was to use another method of punishment (freezing account, withdrawing additional services) or was to issue the fines in the future (e.g. because you did this we'll fine you £50 in two months) you could make sure you had the money in the first place.


actually I've sort of repeated what cwathen said, but my opinion is similar.

As for people who withdraw £200 from an empty account, well that's their own stupid fault really isn't it.

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 11.34
by cwathen
if the banks lose the case many people will be without banking facilities as they'll be withdrawn.

The banks losing the case may be the only thing which stops more drastic action being taken. My actual debt burden isn't that bad, I have an overdraft, a 5 year personal loan which I'm 3 years into paying off, and a credit card with a limit that's not too extreme. I also have a reasonable enough job and can (in theory) easily afford the minimum payments whilst still paying all my other bills and having a bit left over for me. Yet I am constantly hammered with exhorborant fees over trivial issues. These cost me a lot of money over the course of a year, and being that I have no mortgage (and no real willingness to own my own house anyway), few proveable capital assets, and no amazing credit rating to protect I am actually giving serious thought to bankruptcy as a way to resolve this. Usually, I decide it's better (and more decent) to carry on repaying, but if the banks aren't pulled into line they will inevitably push me too far and end up having the plug pulled on their repayments, permanently. Indeed, if they *don't* loose the court case and their disgraceful activities are formally legalised, the charging situation is going to get even worse in which case I will almost certainly consider whether it's viable to continue to struggle with this.

Rather than play the victim card and hold up their terms & conditions, the banks need to realise that this is all their own doing - if they didn't get greedy then it's unlikely that anyone would have seriously questioned bank charging and it wouldn't be at risk of being taken away from them. They should accept that they've had a good run, and hope that smaller charges continue to be permitted, that they don't have to automatically make a refund, that there is a limit to how far back people can claim, and that most people won't bother to claim their charges anyway.
Well, Lloyds TSB don't, and even though they started it over the phone they've now ditched it again. ING Direct also hold my money hostage for three days and while we're on the subject, exactly why does it take five days to pay a credit card bill? Why is the "date of payment" the sixth when even if you pay i cash in the store the card is attached to it still apparently takes five days? Why is it not set as the first? It's lies.
Some things have got slower - when I moved most of my day to day banking over to Natwest, the main reason I kept my HSBC account aswell rather than closing it was that HSBC could clear a cheque in 3 days (including the day you paid it in if you got in early enough) which could be useful to me. Today, they take 5 days. How can that happen?

It is credit card bills that started me off on this thread - my credit card bill was due on Friday 28th. Being that I also got paid on Friday 28th it would be easier on me to wait until I get paid rather than struggle to find the money out of my last pay packet.

Normally this is no problem - if you go into the branch and transfer money from your current acount it's credited immediately and so you've paid on time. What I didn't bank on (no pun intended) was that because I went in to the branch at 4PM the money won't be credited until the next working day (tuesday 1st in this case) as it's after 3:30PM.

What on earth has the time of day got to do with anything? Do computers not work after 3:30PM? This is bullshit.

So, even though I've paid my bill on the due date, it of course is now 'late' because Natwest have choosen to ignore the payment and in line with their gestapo-like charging policy will apply a late payment charge (rather oddly, this one is only £12 - so they're saying that paying a bill late is less serious than going 1p outside of an overdraft limit, which would result in a £28 charge).

Just to add insult to injury, the late payment charge has allready appeared - on a bank holiday weekend - and they've allready taken the money out of my bank account where it's currently sitting in a holding account earning interest for them - again on a bank holiday weekend! So it would appear that they *can* process transactions outside of their arbitrary timescales if it suits them to and only withold them where it will benefit them (which is patently obvious any way).

These idiots who claim that you only need to be careful and you won't get charged need to wake up and smell the coffee - tell me this isn't underhand and shouldn't be criminal?
or was to issue the fines in the future (e.g. because you did this we'll fine you £50 in two months) you could make sure you had the money in the first place.
I woudn't support this either because this is the excuse Natwest hide behind - they argue that it's totally fair to charge you ridiculous charges on your current account because they send you a nice letter well in advance telling you the exact date on which all these charges will be applied.

Unlike every other kind of electronic transaction though, there is never any 'marker' placed on these funds in advance - the money simply disappears. So that if you happen to forget the exact date the charges will be applied, they could of course make you go overlimit again. There is then nothing you can do to stop a further charge being applied for this. So again, you're in this spiral of 'stacked' charges - where one charge directly triggers another.

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 12.57
by Gavin Scott
I suppose the 3.30pm cutoff is due to the process of running all of the accumulated transactions. Certainly, we have to close our system in the office at a certain point when it comes time to transaction updating, as you can't be working on live data when you're applying changes to all the accounts.

Unlikely as it may sound (given some of my opinions on here), I do agree with charges being applied to account holders for unauthorised overdrafts and the like - but I think they should be set at a more reasonable level - or perhaps be commensurate with the amount by which a customer exceeds their limit.

A £25 fee for a second class automated letter telling me I will be charged a £30 fee for exceeding my overdraft is grossly unfair; yet the whole of financial services are supposed to abide by "TCF - treating customers fairly" guidelines.

This wouldn't have made it to the highest court in the land if they charged £5 or £10, or capped the fees at a certain limit, or perhaps set them in accordance with the level of unauthorised overdraft.

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 13.13
by DVB Cornwall
As my points have been questioned here are my answers..

Statement dates on cards ...

It is a relatively simple job to change statement dates on cards so that they coincide with the date you want to pay, as I have done with Amex, Citi and M%S recently. Phone them up, or if available use an electronic message, and it'll be done.

Faster Payments ...

Fully available from Barclays, HSBC and RBS including Natwest. Lloyds Banking Group HBOS fully operational for sums up to £1000. The ex Building Societies need to improve yes.

Most conventional banks notify in advance charges and detail the date on which they'll be debited. HSBC First Direct also have this information available online to view well in advance of the date.

charges and interest for the period 01/07/2009 to
31/07/2009 applied to account on 22/08/2009
total charges applied
tariff fee 9.95
informal overdraft arrangement fees Nil
formal overdraft arrangement fees Nil
debit interest Nil
banking fee* Nil
return fee Nil

This information is available from the start of the charging period, in my case August's charges will be available from tomorrow giving three full weeks notice.

Users need to compare the facilities offered and choose based on that.

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 13.26
by Chris
Normally this is no problem - if you go into the branch and transfer money from your current acount it's credited immediately and so you've paid on time. What I didn't bank on (no pun intended) was that because I went in to the branch at 4PM the money won't be credited until the next working day (tuesday 1st in this case) as it's after 3:30PM.

What on earth has the time of day got to do with anything? Do computers not work after 3:30PM? This is bullshit.
The card payment thing differs from bank to bank. I know HSBC are particularly awkward, even if you pay cash in a branch towards your credit card bill, if you're after 3:30 it'll be processed next day. And even then, the amount won't actually credit the account until 3 working days after; this is paying a HSBC (First Direct, part of HSBC) credit card in an HSBC branch. It's madness that it'll take 3 working days for money to move within the same organisation. But for 'interest purposes' it'll be marked as paid, apparently.

Lloyds adopt a similar approach to paying off credit card bills using cash, although theirs is overnight, but if you specify at the counter that you want this to credit today, it'll hit the account in around 3 hours, which isn't too bad.

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 15.32
by cwathen
I suppose the 3.30pm cutoff is due to the process of running all of the accumulated transactions. Certainly, we have to close our system in the office at a certain point when it comes time to transaction updating, as you can't be working on live data when you're applying changes to all the accounts.
Why though would a modern database (or indeed any system developed in the last 20 years) need to accumulate transactions and only update once a day? Why can't it be entirely live? Indeed, it *is* live. Transactions may be marked as 'pending' or 'unconfirmed' before being rubber stamped at a certain point in the day, but the transaction has occured nevertheless. It seems an entirely artificial step to need to 'process' things when the sending and receiving systems allready know what is going to happen.

But, even if there is a need to have a specific cutoff point for a day which I can't see, why should this be at some arbitrary point in the middle of the afternoon? The day is by no means over at 3:30 - most people working a day job are nowhere near finishing for the day by that time.

Surely the obvious thing to do would be for the cutoff to be 23:59:59 and for all the updates to run overnight. At the very least the cutoff should not be until all of the bank's branches have closed for the day. It's ridiculous that most main branches of banks now remain open until 5PM but they stop processing well before this - it would be like a shop doing it's cashing up at lunchtime.

And this still doesn't consider why transactions can't be processed over the weekend (especially when many branches open on saturdays now).

Again, I would argue that this is done specifically because the banks *want* to retain the ability to hold things up in the system as this can make them money, either by interest or excuses to issue charges.
Lloyds adopt a similar approach to paying off credit card bills using cash, although theirs is overnight, but if you specify at the counter that you want this to credit today, it'll hit the account in around 3 hours, which isn't too bad.
Natwest's procedure here is interesting. If you go to a cashier to pay your credit card bill they will write down your card details on a manual form which will be entered in later and processed over 3 working days. If you need to make an immediate payment, you wait for a customer adviser (the people who usually arrange loans) where the money can be moved over straight away (providing you're in time, of course) from their computer.

Umm, just why can't the cashiers have this ability? If they can't see a procedural problem with cashiers working from bits of paper but other people in the same branch being able to make payments directly on the computer system, then something is very wrong with the way the bank is run (but then this is the bank which can never open more than half their cashier positions due to lack of staff but can put two people on the queue to apologise and try to divert people into using machines).

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 15.54
by Gavin Scott
cwathen wrote:
I suppose the 3.30pm cutoff is due to the process of running all of the accumulated transactions. Certainly, we have to close our system in the office at a certain point when it comes time to transaction updating, as you can't be working on live data when you're applying changes to all the accounts.
Why though would a modern database (or indeed any system developed in the last 20 years) need to accumulate transactions and only update once a day? Why can't it be entirely live? Indeed, it *is* live. Transactions may be marked as 'pending' or 'unconfirmed' before being rubber stamped at a certain point in the day, but the transaction has occured nevertheless. It seems an entirely artificial step to need to 'process' things when the sending and receiving systems already know what is going to happen.
I can't answer that. Although a family member is fairly high in RBS IT, so I could ask him.

I would guess that transactions are not only the ones processed live at a cashiers desk, but other forms, such as telephone, online and EFTPOS business.

From my own experience, if we try to run numbers though our comparatively tiny database (of less than 3000 accounts), we can end up with corrupt data, extra columns and all kinds of erroneous outcomes. Its simply easier to make sure no other users can touch the live info while we update large volumes of account transactions.

There's no doubt in my mind that there's a cost advantage to the banks in having long process times. I'm sure part of it is a legacy to manual book-keeping, and the time that used to take - but I'm doing my best to be fair and balanced...

Re: Bank Charges (yep, that old chestnut again)

Posted: Mon 31 Aug, 2009 19.01
by DVB Cornwall
3.30 is historical, but does serve a purpsoe. Each till has to be balanced at the end of the day, so cash needs to be counted against ledger balances. 3.30 is still chosen so that investigating discrepancies can be completed prior to the staff leaving to go home at 5pm (ish).

As my more elderly companions on this forum will attest, branches used (up to fairly recent times too) to close at 3.30pm to do this task without customers being present.

Closing the till and re-opening it for the next day makes this task much easier.

Re: Bank Charges (yep, that old chestnut again)

Posted: Tue 01 Sep, 2009 11.42
by Gavin Scott
Chie wrote:Banks have the ability to prevent customers from going below £0.00. I know they can, because they finally did it to my account last year and it became physically impossible for me to go overdrawn. They obviously don't do this to all accounts as standard, because they want people to fall into the unauthorised overdraft trap and make a profit from it.
Back in high school my account used to do this, so if I was shopping my card would simply be declined. They turned this facility off when I hit 18 and I almost immediately went overdrawn without realising.

Also, both HSBC and Natwest have told me that if you have this feature turned back on, so that you can't go overdrawn, it affects your credit history. Bastards.
How does that make them bastards? I'm no fan of banks for different reasons, but in this case you could just ask for a debit card only and no overdraft.

Its true that it affects your credit "points" - the scoring scale that accumulates and allows you to gain credit elsewhere. Those points are there to indicate that you can be trusted with a credit facility - if you can't then you shouldn't have it. It benefits you in the end. Alternatively you can gain points by taking out store cards and paying them off in a timely fashion.

I only recently had my account "upgraded" to allow for an overdraft facility - and until that point I couldn't get credit elsewhere, as I hadn't amassed sufficient points on my credit score.

We all fuck up when it comes to overspending - but there's millions of folk in Britain who get up to their balls in debt with endless credit and store cards - because they have absolutely no discipline, but simply must have a games console, flatscreen TV and other things. That's why the economy was shot to ribbons - toxic debt everywhere you look.

I understand its easy to forget the odd transaction that might come off your balance some days later, but if you bought things/spent cash, then you can't kvetch because the bill arrives.

I have a much larger issue with things they do that seem genuinely unfair - like when I had a debit account with no overdraft facility. A direct debit was charged to my account, badly timed. They didn't pay it (as I had no overdraft facility) but charged me to say they wouldn't pay it, and drew their charge instantly, putting me in an "unofficial overdraft", as the bank wanted their money right away.

The DD Mandate was for £12 and some change, but the total charge for putting me in an overdraft I didn't have plus the letters totalled nearly £70.

I accepted the charge for the letter saying the mandate wouldn't be paid - but I complained that they had added a facility to my account to serve them, when they wouldn't offer it to me as the customer.

I got that part of the charge back.

Re: Bank Charges (yep, that old chestnut again)

Posted: Tue 01 Sep, 2009 11.55
by Gavin Scott
Ooh. Interestingly we're now seeing the first lowering of "personal debt" since the records were started in 1993.

About bloomin' time too.

http://news.bbc.co.uk/1/hi/business/8231135.stm

I hear the next step for a person I know extremely well is bankruptcy, yet I'm told he's been trying to borrow a further £5K so he and his wife can attend a friend's wedding in Spain.

Give me strength...

Re: Bank Charges (yep, that old chestnut again)

Posted: Tue 01 Sep, 2009 12.44
by Gavin Scott
Gavin Scott wrote:How does that make them bastards? I'm no fan of banks for different reasons, but in this case you could just ask for a debit card only and no overdraft.
I didn't have an overdraft facility. When I went overdrawn it was an 'unofficial overdraft', and yet if I refuse this unofficial overdraft and tell them to block my account from going overdrawn, I get a bad credit rating.
Oh. Well why didn't you *say* so?

Your example almost exactly matches mine. You could, based on my experience, ask for the unofficial overdraft charge to be returned, as that one really stretches the line of ethical practice.

But to be clear - its not your credit rating, rather your credit score that is affected by removing an overdraft facility on your current account. One leaves a black mark that takes a long time to clear - the other just stops you gaining new lines of credit, as they have nothing to "judge" you on.

Not that I'd have expected them to know enough to explain the difference - so you can have that one on me.