Personal Current Account Services Billing - Consultation

[Amethyst]

Consumer groups consider that the current banking model for personal current accounts is unfair. As part of consumer groups work on reforming the personal current account market we have decided to look at the way banks charge their customers for providing the current account services.

Currently banks operate a variety of different methods and levels of charging on personal current accounts. This is confusing and proper comparison is virtually impossible.

The significant areas of concern are:

• low levels of transparency on fees that make up a high proportion of the payment that consumers make for their current account services, both in terms of their amount, frequency and the manner in which they are levied
• the complexity in the way that these charges are implemented that makes it hard for consumers to predict when they will be incurred, charges on accounts often lead to further charges, creating a 'snowball' effect, which consumers find it difficult to recover from.
• a lack of simple mechanisms for consumers to control whether they use services for which they are charged
• a significant proportion of consumers consistently incur charges and appear to underestimate both their level and frequency, and
• Personal Current Accounts are an essential part of the average UK consumers daily life and should be categorised as a Utility.

-----------------------------------------

In conjunction with other consumer sites and campaigners (MSE, Bob Egerton, CAG and Beagles) we met with the OFT on February 4th to put across YOUR VIEWS. These are the main issues we bought up and will be formally submitting these in writing in the next few days.

Our proposals for addressing these areas include;


Return to simple charging
The only charges that should apply in relation to insufficient funds transactions should be:
a) paid item charge
b) unpaid item charge

There should be no 'monthly unauthorised overdraft fee' simply a higher rate of interest applied to any debt above and beyond a customers agreed overdraft.

Only then can people truly understand and compare pricing and only then can competition exist as it should.


Capping
There should be a universal cap on the total value of insufficient funds charges applied in a given period - particularly annually. For example: ''You will never be charged more than £500 per annum'' ''You will never incur more than 5 unpaid/paid item charges per statement period''


Opt out/in
The service of 'consideration' for any payment instruction (whether that results in a paid or non paid item fee) should be an opt-in service for consumers - and not an opt-out. No unpublished 'shadow' limits or ability to go over your agreed overdraft at all by default. A customer should be able to opt in or out at any given point with the same notice period as cancelling a direct debit and for no charge.


Real-time balances
Debit card transactions authorised at point of sale and available balance adjusted immediately. Personal current accounts in the UK - a follow up report Debits known to be pending at the close of business should also be reflected on available balances.There should be no charge for this.


Charge notification & Billing
Charges incurred should be notified at least 2 months in advance. Our preference would be for charges to be billed separately to customers to allow them the choice of when (within a reasonable period) and by which method to pay for the service they have used and to remove the negative impact incurring charges has on customers overall finances and the risk of charges triggering more charges and spiralling out of control.


Price publication
Banks should publish data on the average amount paid per annum by account holders who incur these charges, to promote comparison and competition.


Basic Accounts
Each bank should offer a truly charge-free basic account that operates only when in credit that is available to ALL customers - much in the same way as a pay-as-you-go mobile phone works where no charges are applied when attempting to make a call when not in credit.


Business accounts
Banks must offer small businesses/micro enterprises/trading as customers the same level of protection on business accounts as are proposed for personal accounts.


Regulation / Compliance
Personal Current Accounts should be recognised as a UTILITY and regulated as such. For self regulation read 'no regulation'. If all of the above cannot be achieved voluntarily it must be legislated on. We have no confidence that the banks will agree to, or abide by, voluntary regulation; therefore, the new arrangements should have the force of legislation and/or external regulation.

-----------------------------------------

The biggest change to current banking provision on this consultation is Charge notification & Billing - the switch away from charges being 'imposed' on customer accounts towards customers receiving seperate 'bills' requesting payment for the services used in a statement period.

Bank accounts are to be treated as a Utility, like electricity, telephone, water and other essential services for the average consumers in the UK.

• Bills for services sent with customers account statements
• Consumers have choice of when or by which method to pay for the service. This can be by Debit Card from the account the service fees were incurred on, or any other account they may hold. By cash over the counter, by bill payment or direct debit services.
• Bills will be more transparent to customers
• Charges incurred will not lead to further charges on customers current accounts, by way of charges on charges, increased overdraft, charges being taken forcing other transactions to become instant overdraft requests incurring further fees.
• Customer will be billed at the end of each statement period and given 28 days to pay their bill. If a bill is paid after the due date late payment fees may be applied. Service Accounts may enter default and standard debt collection procedures employed. The banks may impose restrictions on services offered until the bill is paid.
• All standard and non standard account service fees would be billed. Credit and Debit Interest on Account Balances will remain to be charged/paid to the Current Account.

-----------------------------------------
Next steps We will collate responses to the consultation and publish a formal summary of these. Depending on the outcome of the consultation we hope to publish a further or final report March 2010. This report will be submitted to the Office of Fair Trading. Our aim is for a final report containing recommendations that the banking industry, in consultation with government and other relevant stakeholders, will take forwards.


PLEASE COMPLETE THE POLL AND GIVE US YOUR VIEWS ON THIS THREAD.

[Amethyst]

Personal Current Account Services Billing - Consultation

We would appreciate ALL your views on these proposals.

[Gorang]

Re: Personal Current Account Services Billing - Consultation

Sorry Amethyst but I do not agree with a lot of this

This is of my opinion only and the way I see it

Sorry if this offends anyone as it is not intended to offend anyone

Our proposals for addressing these areas include;


Return to simple charging
The only charges that should apply in relation to insufficient funds transactions should be:
a) paid item charge
b) unpaid item charge
it costs them nothing to pay an item now, so the cost for NOT paying anything is the exact same, NOTHING, it was the banks choices to put in machines to do all this automatically, not ours, so I don't see why we should have to pay for their choices. The cost of the machines and their running costs should be coming out of their profits same as any other company, as that is exactly what they are, A company.

If it is put in that they can charge anything for standard practises like this then this will also leave the door wide open for them to do the same as they did with the £12 CC, they will just abuse and maximise it at all times

There should be no 'monthly unauthorised overdraft fee' simply a higher rate of interest applied to any debt above and beyond a customers agreed overdraft.
if there is no charges and no unauthorised overdrafts then there will be no need for a higher rate of interest, as it is simple, the only one that can give or apply an unauthorised anything is the BANK, take that away then there is no unauthorised debt



Only then can people truly understand and compare pricing and only then can competition exist as it should.compitition should be with their interest rate on borrowing and on an account's credit interest over a certain amount

Would also add in that for all accounts then no interest is to be paid unless the account balance is over a certain amount ie. (example only) say £1000


Capping
There should be a universal cap on the total value of insufficient funds charges applied in a given period - particularly annually. For example: ''You will never be charged more than £500 per annum'' ''You will never incur more than 5 unpaid/paid item charges per statement period''
again no charges then no need for this, and if this is left in they will then just abuse and maximaise as they have done time and time again

Opt out/in
The service of 'consideration' for any payment instruction (whether that results in a paid or non paid item fee) should be an opt-in service for consumers - and not an opt-out. No unpublished 'shadow' limits or ability to go over your agreed overdraft at all by default. A customer should be able to opt in or out at any given point with the same notice period as cancelling a direct debit and for no charge.
this should also extend to,
if you walk into any branch of your bank ,show proof of ID, then the DD or whatever you want to cancel gets cancelled then and there (not 3 working days later and needs to be in writing)
no questions asked as it is then the consumers problem to then arrange to pay their supplier,
and again this is no extra work for anyone in the bank it is just a simple hit of a button


Real-time balances
Debit card transactions authorised at point of sale and available balance adjusted immediately. There should be no charge for this.
clydesdale personal accounts do this now (well my OH's does anyway) as soon as any transaction accurs then it shows up within mins on your online account

Agreed all accounts should be like this


Charge notification & Billing
Charges incurred should be notified 28 days in advance. Our preference would be for charges to be billed separately to customers to allow them the choice of when (within a reasonable period) and by which method to pay for the service they have used and to remove the negative impact incurring charges has on customers overall finances and the risk of charges triggering more charges and spiralling out of control.
I don't think 28 days is not long enough as most of the nation are now paid monthly not 4 weekly, but again if there is no penalty charges then no need for this,
for larger businesses yes agreed should be billed and then the business then has to pay the bank like any other supplier


Price publication
Banks should publish data on the average amount paid per annum by account holders who incur these charges, to promote comparison and competition.
Again if no charges then no need,
but if this was put forward to them then this would also only give them more work to do, so they would then say that because we asked for it then then we need to pay for it and they would then just abuse it by trying to increase their profits form it not just cover their costs


Basic Accounts
Each bank should offer a truly charge-free basic account that operates only when in credit that is available to ALL customers - much in the same way as a pay-as-you-go mobile phone works where no charges are applied when attempting to make a call when not in credit.
all bank accounts accross the board should be like this, no money in the account well then your bills don't get paid,

Another example that could be used is prepay credit cards that already exist, no money on the card then you can't use it, but I do not know enough about these cards so don't know if they charge you interest, I suspect that they do and this is how they make there money
And best example I can think of which everyone will relate to from layman to a Judge

If you have no money in your pocket then you can't spend it in a shop


Business accounts
Banks must offer small businesses/micro enterprises/trading as customers the same level of protection on business accounts as are proposed for personal accounts.
I think that all businesses accross the board should be the same as the personal accounts as I have said above with regards to charges,

but free banking up to a certain amount of turnover (not just for a certain period for a new company) ,

then yes once they over a certain turnover then charge small amounts for some services but not for paying in and paying out your own money,

up to the next higher level of turnover then charge for more services but again NOT for paying in or paying out money

what I mean for paying in or payig out money is ie. your profits going in and bills going out and for a shop that needs change on a weekly or monthly basis

as again it is our money so why should we have to pay them for puting it in and taking it out when they have slowly taken our choices away from us alltogether as to whether we need or want an account now or not, the choice is now not there, we need to have one in order to just live.
(I prob need better wording on this but am trying to keep it as short as I can but I think you will get the drift)

Regulation / Compliance
Personal Current Accounts should be recognised as a UTILITY and regulated as such. For self regulation read 'no regulation'. If all of the above cannot be achieved voluntarily it must be legislated on. We have no confidence that the banks will agree to, or abide by, voluntary regulation; therefore, the new arrangements should have the force of legislation and/or external regulation.
Yes a utility and certainly made very very clear to the layman by the govenment as well as the banks as to what can and can't be done with the accounts, and everything being very very transparent, and also a regularity authority formed or restructured that can, does and will do what they are supposed to do, so they will need very clear and presice instructions

-----------------------------------------

The biggest change to current banking provision on this consultation is Charge notification & Billing - the switch away from charges being 'imposed' on customer accounts towards customers receiving seperate 'bills' requesting payment for the services used in a statement period.

Bank accounts are to be treated as a Utility, like electricity, telephone, water and other essential services for the average consumers in the UK.

• Bills for services sent with customers account statements
• Consumers have choice of when or by which method to pay for the service. This can be by Debit Card from the account the service fees were incurred on, or any other account they may hold. By cash over the counter, by bill payment or direct debit services.
• Bills will be more transparent to customers
• Charges incurred will not lead to further charges on customers current accounts, by way of charges on charges, increased overdraft, charges being taken forcing other transactions to become instant overdraft requests incurring further fees.
• Customer will be billed at the end of each statement period and given 28 days to pay their bill. If a bill is paid after the due date late payment fees may be applied. Service Accounts may enter default and standard debt collection procedures employed. The banks may impose restrictions on services offered until the bill is paid.
• All standard and non standard account service fees would be billed. Credit and Debit Interest on Account Balances will remain to be charged/paid to the Current Account.

Think I have covered what i think above but there is one thing that I would push in saying

If there was no penalty charges, no unauthorised borrowing allowed by banks then it would SAVE them money

because

the banks will not have to sell on accounts to DCA's for huge losses and they also will not have to pay DCA's or solicitors to chase for any personal or small business accounts.

Also if people are not having to pay for the penalty charges or unauthorised borrowing then they will have more money to spend in local businesses
therefor doing the ecomomy good as the layman and business would have more money to put into the banks (or to spend) and there is another bonus for the banks again, as they would have more money to invest

Again this is my opinions only and is not meant to offend anyone at all

[natweststaffmember]

Re: Personal Current Account Services Billing - Consultation

Consumer groups consider that the current banking model for personal current accounts is unfair. As part of consumer groups work on reforming the personal current account market we have decided to look at the way banks charge their customers for providing the current account services.

Currently banks operate a variety of different methods and levels of charging on personal current accounts. This is confusing and proper comparison is virtually impossible.

The significant areas of concern are:

• low levels of transparency on fees that make up a high proportion of the payment that consumers make for their current account services, both in terms of their amount, frequency and the manner in which they are levied
• the complexity in the way that these charges are implemented that makes it hard for consumers to predict when they will be incurred, charges on accounts often lead to further charges, creating a 'snowball' effect, which consumers find it difficult to recover from.
• a lack of simple mechanisms for consumers to control whether they use services for which they are charged
• a significant proportion of consumers consistently incur charges and appear to underestimate both their level and frequency, and
• Personal Current Accounts are an essential part of the average UK consumers daily life and should be categorised as a Utility.

-----------------------------------------

In conjunction with other consumer sites and campaigners we met with the OFT on February 4th to put across YOUR VIEWS. These are the main issues we bought up and will be formally submitting these in writing in the next few days.

Our proposals for addressing these areas include;


Return to simple charging
The only charges that should apply in relation to insufficient funds transactions should be:
a) paid item charge
b) unpaid item charge

There should be no 'monthly unauthorised overdraft fee' simply a higher rate of interest applied to any debt above and beyond a customers agreed overdraft.

Only then can people truly understand and compare pricing and only then can competition exist as it should.
There should be something about Card Payments somewhere in this area as RBS charge for a guaranteed card payment fee.

Capping
There should be a universal cap on the total value of insufficient funds charges applied in a given period - particularly annually. For example: ''You will never be charged more than £500 per annum'' ''You will never incur more than 5 unpaid/paid item charges per statement period''
I don't agree with a capping scheme because if people are getting charged this much then banks should be proactively contacting customers to see if they can help with their finances. Clearly the fact this is not happening means that the system may not work.

Opt out/in
The service of 'consideration' for any payment instruction (whether that results in a paid or non paid item fee) should be an opt-in service for consumers - and not an opt-out. No unpublished 'shadow' limits or ability to go over your agreed overdraft at all by default. A customer should be able to opt in or out at any given point with the same notice period as cancelling a direct debit and for no charge.
I am a great fan of the Electronic Funds Transfer Act 2009 or EFTA that has been introduced in the US where there is no implied consent. There is written consent or there is no consent and all payments are cancelled without agreement prior to it.

Real-time balances
Debit card transactions authorised at point of sale and available balance adjusted immediately. There should be no charge for this.
I'm not sure you can do this, I think that perhaps real time or same time for refunds on card purchases should be obligatory but at the moment retailers have, if memory serves me right, 21 days to refund an item via a card even if the item is returned 30 seconds after purchase.

Charge notification & Billing
Charges incurred should be notified 28 days in advance. Our preference would be for charges to be billed separately to customers to allow them the choice of when (within a reasonable period) and by which method to pay for the service they have used and to remove the negative impact incurring charges has on customers overall finances and the risk of charges triggering more charges and spiralling out of control.
Not sure if this is workable because there are banks who currently give a period of 21 days for the charges to be paid and it is still not enough time.For a change I am not sure that this is fair on the banks but I do think that there should be more flexibility to be able to come to a compromise over this.

Price publication
Banks should publish data on the average amount paid per annum by account holders who incur these charges, to promote comparison and competition.
I agreee wholeheartedly on this.

Basic Accounts
Each bank should offer a truly charge-free basic account that operates only when in credit that is available to ALL customers - much in the same way as a pay-as-you-go mobile phone works where no charges are applied when attempting to make a call when not in credit.

I completely agree, I would add that perhaps the account could be a no frills account, ie no DD/SO's allowed either and be a simple cash account.
Business accounts
Banks must offer small businesses/micro enterprises/trading as customers the same level of protection on business accounts as are proposed for personal accounts.

Can you explain this point as I am not sure what you mean by this?
Regulation / Compliance
Personal Current Accounts should be recognised as a UTILITY and regulated as such. For self regulation read 'no regulation'. If all of the above cannot be achieved voluntarily it must be legislated on. We have no confidence that the banks will agree to, or abide by, voluntary regulation; therefore, the new arrangements should have the force of legislation and/or external regulation.
I agree with you on this.

-----------------------------------------

The biggest change to current banking provision on this consultation is Charge notification & Billing - the switch away from charges being 'imposed' on customer accounts towards customers receiving seperate 'bills' requesting payment for the services used in a statement period.

Bank accounts are to be treated as a Utility, like electricity, telephone, water and other essential services for the average consumers in the UK.

• Bills for services sent with customers account statements
• Consumers have choice of when or by which method to pay for the service. This can be by Debit Card from the account the service fees were incurred on, or any other account they may hold. By cash over the counter, by bill payment or direct debit services.
• Bills will be more transparent to customers
• Charges incurred will not lead to further charges on customers current accounts, by way of charges on charges, increased overdraft, charges being taken forcing other transactions to become instant overdraft requests incurring further fees.
• Customer will be billed at the end of each statement period and given 28 days to pay their bill. If a bill is paid after the due date late payment fees may be applied. Service Accounts may enter default and standard debt collection procedures employed. The banks may impose restrictions on services offered until the bill is paid.
• All standard and non standard account service fees would be billed. Credit and Debit Interest on Account Balances will remain to be charged/paid to the Current Account.

An example Personal Current Account Service Fees Bill.

-----------------------------------------

Next steps We will collate responses to the consultation and publish a formal summary of these. Depending on the outcome of the consultation we hope to publish a further or final report March 2010. This report will be submitted to the Office of Fair Trading. Our aim is for a final report containing recommendations that the banking industry, in consultation with government and other relevant stakeholders, will take forwards.


PLEASE COMPLETE THE POLL AND GIVE US YOUR VIEWS ON THIS THREAD.

I have always been in favour of EFTA(see above) with regards to overdraft services. Furthermore, it is evident that the Lending Code is not adhered to by the banks with regards to section 140 and the bank being pro active with regards to consumer in financial hardship because they have people trained not to teach their customers good practice but to harrass them for money to repay bank lending. That is not really looking at the overall picture.

[Amethyst]

PLEASE don't apologise for disagreeing - that is why it is here. We, the consumer groups, can only put forwards what we can guage from the forums, so we can only put it together as we think then ask people to comment and discuss it so it can be refined to suit peoples needs/wants etc.

ALL INPUT IS EXTREMELY WELCOME - If you hate every single point then just say - the OFT and government are going off what they 'THINK' people want and we NEED to get through to them what people ACTUALLY want.

Couple things on the last posts. Excellent comments thank you so much, keep going

We have to consider GUARANTEED TRANSACTIONS.

Cheques guaranteed - at least until they are phased out will have to continue being paid regardless of a customers account balance. So an unauthorised overdraft can't be barred altogether without stopping guaranteed cheque payments. I personally don't believe we will actually lose cheques altogether, may be someone can look up the proposals on abolishing guaranteed cheques ?

Debit Card transactions are the other guaranteed transaction - with the proposals for all Debit Card transactions to be authorised and balance amended immediately this will take this problem out of the equation.


There should be something about Card Payments somewhere in this area as RBS charge for a guaranteed card payment fee.
See point above.

Business accounts
Banks must offer small businesses/micro enterprises/trading as customers the same level of protection on business accounts as are proposed for personal accounts.
Can you explain this point as I am not sure what you mean by this?

The proposed Unfair Contracts Bill bought microenterprises and small businesses under the UTCCR umbrella. small businesses should have the same protection as consumers, as in effect they are as they are not on an equal footing as the banks. Basically making sole traders/t/as accounts subject to the same legislation and regulation as PCA's.

I don't agree with a capping scheme because if people are getting charged this much then banks should be proactively contacting customers to see if they can help with their finances. Clearly the fact this is not happening means that the system may not work.

A capping scheme will force this to happen. If someone hits the cap the bank have to take action. Re the billing part - if someone doesnt pay their bill, it also forces the bank to act. So it should if worded correctly mean banks have to pay more attention to their customers financial position and things will be blindingly obvious if there is a problem, contact can be made to discuss alternative options.

it costs them nothing to pay an item now, so the cost for NOT paying anything is the exact same, NOTHING, it was the banks choices to put in machines to do all this automatically, not ours, so I don't see why we should have to pay for their choices. The cost of the machines and their running costs should be coming out of their profits same as any other company, as that is exactly what they are, A company.

A South African competition commision actually found taking everything into account that paying an item COST the bank something like 13p and bouncing an item cost something like 27p. (If you search on south african competition commission report on here you will find it). This cost is, IMO, covered by the amount the banks charge the originators of the Direct Debits (again if you look for RBS internal documents forum on here theres a nice sheet telling us how much they charge originating companies). Also it would cost more to do it manually so not sure I get that argument at the moment.

If it is put in that they can charge anything for standard practises like this then this will also leave the door wide open for them to do the same as they did with the £12 CC, they will just abuse and maximise it at all times

I agree and this is why we arent recommending an individual charge cap.

Furthermore, it is evident that the Lending Code is not adhered to by the banks with regards to section 140 and the bank being pro active with regards to consumer in financial hardship because they have people trained not to teach their customers good practice but to harrass them for money to repay bank lending. That is not really looking at the overall picture.

Agreed and that needs changing - the Lending Code standards board are undertaking a lot of work in this area at the moment. Maybe they need some shoving too?

[Gorang]

Re: Personal Current Account Services Billing - Consultation

Quote:
Originally Posted by Gorang
it costs them nothing to pay an item now, so the cost for NOT paying anything is the exact same, NOTHING, it was the banks choices to put in machines to do all this automatically, not ours, so I don't see why we should have to pay for their choices. The cost of the machines and their running costs should be coming out of their profits same as any other company, as that is exactly what they are, A company.

A South African competition commision actually found taking everything into account that paying an item COST the bank something like 13p and bouncing an item cost something like 27p. (If you search on south african competition commission report on here you will find it). This cost is, IMO, covered by the amount the banks charge the originators of the Direct Debits (again if you look for RBS internal documents forum on here theres a nice sheet telling us how much they charge originating companies). Also it would cost more to do it manually so not sure I get that argument at the moment.

Yeah sorry I was wrong with that wording and I do realise that it costs the bank an minimal fee to do this, but as I said why should we have to pay for their machines and the running costs of them just because they decided to put them in

EDIT
Sumit else that I just realised after re reading the post, as it says above, for DD it is usually a company that is receiving the Dd and they have to pay to receive it, so that means that the bank would be getting paid twice for the same transaction that prb costs pence, (just another example of their greed)

Its like a company going to all their customers and saying ok we decided to put this machine in so we can do our jobs better, but YOU are going to pay for it and give us huge profits above that and we will tell you that it is just computer generated o and by the way you can't NOT use us.

How many companies would have any customers left if they said that

I know that the banks did not say that but that is exactly what they have done over the last 30 to 40 years (and that is NOT a long time as compaired to how long banks have actually been on the go)

Before the computer age really took over things were still being paid in and out of the bank, but we didn't have to pay any penalty charges then to fund it, as this was the banks costs (overheads) the same as any other company would, it just meant they didn't make as much money, but they were still in profit as a whole

Yeah I agree that it would be more expensive for the banks to do everything manually, so hence the computer systems are saving them money already as soon as they go in, as they have cut down on manual labour and wages for a start, and can do triple (prob more) the work so hense getting more customers through the door, again increasing profits

Computers for the banks was (well I belive) initially designed to cope with the increasing work load as the population grew after the war, but instead of using the systems just being used to help with the increasing work load and the amount of customers they could then take on and deal with,

some bright spark then came up with this idea and then said (well words to this affect maybe)
We could use the computers as an excuse to customers so they will pay for themselves and hugley bump up the profits, and while we are doing this, we will actually get everyone and everything changed on to them so that in a few years, NO ONE can or will be able to change it and everyone will HAVE to use it, so therefore we WILL have a consatant garenteed huge profit stream

Quote:
Originally Posted by Gorang
If it is put in that they can charge anything for standard practises like this then this will also leave the door wide open for them to do the same as they did with the £12 CC, they will just abuse and maximise it at all times

I agree and this is why we arent recommending an individual charge cap.

Even with a universal anual cap, that is still going to allow people to land in huge amounts of debt by only charges as people will just open more accounts , and garenteed the banks will max out the anual cap on an account as soon as they can

In my opinion even with a anual cap, it would have the same result as if we just said, ok the lower income population has to pay £500 a year to have a bank account but they get no charges at all, again it is just going to be the people that can't afford it the most that is going to get hit the most, its still not curing the big picture of the not so well off getting shafted by the banks

so again

This is why I personally think we should be pushing for zero charges and the banks can only make money from interest and (dare i say it) investments, this way the power that they have over every single person in the nation (mainly the financially worse off nation), will be completly stripped from them, and then the banking nation will become again what it should be, a company not a life controller

They were allowed to be trusted in the nation over the years, but they have only abused the trust and exploited that trust so I personally think that they should have all that trust taken away from them and for them to be stripped right back down to the bare points of how they originally made money before the computing age, as they will make more money now doing the exact same things with computers as they did back then with manual labour

So ie their profits are up

Its nothing else except their pure greed that says the profits are not high enough in my opinion,
and they are just focusing on making that greedy profits from the people and companies that can't afford it the most, not where they should be making the profit from, the people and companies that can afford it, like it should be

I strongly feel that all they are doing (and which is the thing that needs to be stopped) is, make the rich richer and the poor poorer


Sorry I ranting here

LOL can you guess I just absolutly HATE banks with a passion LOL

Sorry I could go on forever ranting about banks and the thread would just be a long drone by me so over the next few days I will try to put sumit together in one post (like you have amethyst) to put my opinion into what changes we should be trying to push for, and then peeps can see what they think and also see if any of it could be used
------------------------------- merged -------------------------------

PLEASE don't apologise for disagreeing - that is why it is here. We, the consumer groups, can only put forwards what we can guage from the forums, so we can only put it together as we think then ask people to comment and discuss it so it can be refined to suit peoples needs/wants etc.

ALL INPUT IS EXTREMELY WELCOME - If you hate every single point then just say - the OFT and government are going off what they 'THINK' people want and we NEED to get through to them what people ACTUALLY want.

sorry Amethyst I should of said this earlier

Thank you for your comments there
as the last thing I want to do, is offend anyone, as that is not me or what I am about

I would just like to see an end to all penalty charges and the banking world be fair to all, but i prob be 100090 yrs old and still never truly see it happen

But I can fight on and dream PMSL

[ed.]

Re: Personal Current Account Services Billing - Consultation

I'm having to take my argument hat off here lol

[QUOTE=Amethyst;149801]

Capping
There should be a universal cap on the total value of insufficient funds charges applied in a given period - particularly annually. For example: ''You will never be charged more than £500 per annum'' ''You will never incur more than 5 unpaid/paid item charges per statement period''

£500 is a good figure here when we consider the waiver 'indicative of hardship' but more would need to be done on the consequences of reaching 500, an immediate freeze on further charges until contact is made with the customer or the customer contacts the bank so an arrangement and PROPER advice can be given. (I accept there would have to be a difference of 500 reached over 12 months as opposed to 3-4 months)

Monthly charging, and maybe a better scenario is possible charges + interest thereon can never exceed say 20% of the average monthly credit to the account? Whether or not snowballed, and before they scream rogue debtors would build up regardless - they still have the option of consideration on requests AND they still have the option if a customer shows such regular behaviour and doesn't make the effort to make an arrangement to cancel the account.


Opt out/in
The service of 'consideration' for any payment instruction (whether that results in a paid or non paid item fee) should be an opt-in service for consumers - and not an opt-out. No unpublished 'shadow' limits or ability to go over your agreed overdraft at all by default. A customer should be able to opt in or out at any given point with the same notice period as cancelling a direct debit and for no charge.

Should always be opt in. Customers should always have to request an overdraft or the 'option' of a potential unauthorised overdraft.

It should never be opt out.


Real-time balances
Debit card transactions authorised at point of sale and available balance adjusted immediately. There should be no charge for this.

Or detailed breakdowns of non real time transactions should be provided and the fact it was non real time should serve as an immediate bar to any kind of charge whatsoever.


Charge notification & Billing
Charges incurred should be notified 28 days in advance. Our preference would be for charges to be billed separately to customers to allow them the choice of when (within a reasonable period) and by which method to pay for the service they have used and to remove the negative impact incurring charges has on customers overall finances and the risk of charges triggering more charges and spiralling out of control.

Goes back to CCA - there is now a provision S86 from memory for charge notifications, formerly I believe it was a DN, In the notice period the customer as per the CCA should be given an option of rectifying the situtation ie paid item leading to no charge but increased interest as service fee or unpaid no remedy = charge.

In either case the customer should have 28 days to pay by a means of their own choosing, the bank should not have the right to automatically levy charges of any sort.

I'd go further and state that if automatic drawing has to stay in place then there is a bar for a charge taking a customer back over a limit. It's just struck from the system if money is available.



Price publication
Banks should publish data on the average amount paid per annum by account holders who incur these charges, to promote comparison and competition.

Don't really see the point, could be spun so many ways by banks to paint a more favourable position. ie off set the level by including all customers, or even customers who only had one charge in 12 months. Compared with the average level of people who have one a month the figures would be totally different.

Would require the banks to agree, and be regulated on how they arrived at such figures so were comparable, but I'd just never trust the figures they came out with.

Regulation / Compliance
Personal Current Accounts should be recognised as a UTILITY and regulated as such. For self regulation read 'no regulation'. If all of the above cannot be achieved voluntarily it must be legislated on. We have no confidence that the banks will agree to, or abide by, voluntary regulation; therefore, the new arrangements should have the force of legislation and/or external regulation.
After everything I'd say it's nothing but legislation and in the consultancy period the banks have absolutely no say whatsoever anymore, if they do we'll get more clever arguments on why X,Y,Z cannot be done and we'll have a repeat of the CCA where the central most protection is removed in their favour.

The banks have proven they cannot self regulate, so now they get told.

[*]Customer will be billed at the end of each statement period and given 28 days to pay their bill. If a bill is paid after the due date late payment fees may be applied. Service Accounts may enter default and standard debt collection procedures employed. The banks may impose restrictions on services offered until the bill is paid.

Sure that isn't merely the cost of provided the service to pay late Ame? lol Obviously restrictions apply, costs would have to be published.

[Amethyst]

Re: Personal Current Account Services Billing - Consultation

I'd go further and state that if automatic drawing has to stay in place then there is a bar for a charge taking a customer back over a limit. It's just struck from the system if money is available.


On that, we have seen some banks start doing this, ie not taking charges until there is money available in the account - this is causing problems too - especially people who have low incomes as charges just sit and build up and as soon theres a payment in to the account big enough its all getting swiped instantly to pay the banks charges - then theres a hell of a fight to get it back.

The only way around a lot of the problems I can see is by billing seperately. I know this creates seperate problems, but only in the same way paying an electric bill say would cause ? or am I being over simplistic. Re your comment on a late payment fee - same thing - it WOULD be a penalty and controllable in that way so the £12 seems a maximum allowable ??

I don't know if there is something in Paget's or banking law which means a bank has to take funds from the account but the only references I can find is that it is done this way because it suits the banks - efficient, convenient and cost effective - for them!


Price publication
Banks should publish data on the average amount paid per annum by account holders who incur these charges, to promote comparison and competition.

Don't really see the point, could be spun so many ways by banks to paint a more favourable position. ie off set the level by including all customers, or even customers who only had one charge in 12 months. Compared with the average level of people who have one a month the figures would be totally different.

Would require the banks to agree, and be regulated on how they arrived at such figures so were comparable, but I'd just never trust the figures they came out with.


It would have to be set in stone. Every person who receives one or more unpaid/paid fees in a year is totted up and the total charges taken averaged.

[ed.]

Re: Personal Current Account Services Billing - Consultation

Point taken, which is why I prefer the idea of it being struck not simply saved up until a cash payment is made. If this is raised as the preferred option then maybe they'll be more willing to entertain the seperate billing element? Cause I can see them saying we could do that BUT it would then cost more, with the option of striking any charge creating charge fees they may be more open to a deal along those lines.

I'd say anything over £2.50 is open to challenge, for a late payment. I could see them all settling at 12 in line with OFT charges but I wouldn't recommend that as a charge because it would in some ways consolidate it as a fair charge, but one of these days maybe the OFT'll revisit that and understand the application of Reg 8 properly.

Not sure on Paget's and I doubt hugely there is anything forcing the banks to make auto withdrawls, so I'd agree with you it's probably just easy practice for them because it puts them in control.

[Tools]

Re: Personal Current Account Services Billing - Consultation

Some fantastic comments here, just what we wanted. Keep 'em coming.

[catinahat]

Re: Personal Current Account Services Billing - Consultation

I strongly agree on many of the points raised here Ame, but particularly, the point you raised about current accounts being regarded as a utility.
As things stand at present, there are people, some of whom are the vulnerable in society, who are effectively excluded access to current accounts due to financial/socio-economic reasons. Its almost impossible for anyone to live in modern society without a current account (and they don't make mattresses like they used to to y'know ;-)). I know there are those P.O. accounts for people in receipt of benefits but I think in many respects these fall short of what people need today. Not to mention I suspect there's an element/or could be, of stigma attatched to these. This just marginalises people even more. Since most organisations, utilities, financial institutions, government organisations etc etc ALL require money to be paid into an account, coupled with the slow abolition of the cheque book, a current account is a neccessity for all, not a luxury. If all these bods make it impossible for folk to deal in cash, then there should be the means for people to avail themselves of such measures; furthermore, not one which charges the more well off in society the least, whilst charging the poorest the most, simply for being poor... and that is my soap box put back in its corner.... for now...;-) CatX

[natweststaffmember]

Re: Personal Current Account Services Billing - Consultation

Amethyst with regards to capping, I think the amount is too high ie £500. What RBS Group did do roughly in 2003 had a cap of £125.00 over the overdraft limit before collections got involved which rose to £250.00 and I suspect is still at that amount in spite of their lowering of charges.
I think a lower amount is better ie £250.00

[Amethyst]

Re: Personal Current Account Services Billing - Consultation

I strongly agree on many of the points raised here Ame, but particularly, the point you raised about current accounts being regarded as a utility.
As things stand at present, there are people, some of whom are the vulnerable in society, who are effectively excluded access to current accounts due to financial/socio-economic reasons. Its almost impossible for anyone to live in modern society without a current account (and they don't make mattresses like they used to to y'know ;-)). I know there are those P.O. accounts for people in receipt of benefits but I think in many respects these fall short of what people need today. Not to mention I suspect there's an element/or could be, of stigma attatched to these. This just marginalises people even more. Since most organisations, utilities, financial institutions, government organisations etc etc ALL require money to be paid into an account, coupled with the slow abolition of the cheque book, a current account is a neccessity for all, not a luxury. If all these bods make it impossible for folk to deal in cash, then there should be the means for people to avail themselves of such measures; furthermore, not one which charges the more well off in society the least, whilst charging the poorest the most, simply for being poor... and that is my soap box put back in its corner.... for now...;-) CatX

There is a lot of work ongoing in government etc on financial inclusion which does appear to be helping people access banking - although I agree in many ways with inclusion, it does open up, as things stand, the most vulnerable to the risk of heavy charges and losing control of their own money. they are making a bank account a necessity but the bank accounts are not fit for purpose and the protection is shoddy.

[Amethyst]

Re: Personal Current Account Services Billing - Consultation

Do banks still run on overnight updates - with debits being applied first before credits from the previous working day ? Or has that changed now ? Just wondered.

[Amethyst]

Re: Personal Current Account Services Billing - Consultation

Bank fee costlier than payday loan


Taking out an unauthorised overdraft with one of the UK's part-nationalised banks can be more expensive than going to a payday loan company, it has been revealed.
Payday loan firms, which lend small amounts for short periods to people who would struggle to get credit elsewhere, have come in for heavy criticism for charging interest and fees equivalent to more than 3,000% a year.
But someone who wanted to borrow £150 for 10 days would be better off going to one of these lenders than taking out an unauthorised overdraft with Lloyds TSB.
Lloyds TSB, which has received significant Government support, would charge a current account customer £216.32 in interest and charges if they were overdrawn by £150 for 10 days.
Halifax, which is also part of the Lloyds Banking Group, is only slightly better, levying a £50 fee under the same scenario.
But payday loans firm speed-e-loans.com would charge less than half this amount at £20.45, although this is still equivalent to an annual interest rate of 3,142%.
Other banks also charge more than speed-e-loans to borrow the same amount through an unauthorised overdraft, with Alliance & Leicester charging £50, while Barclays would charge £44.
But Royal Bank of Scotland, which has also received Government backing, and Nationwide have more reasonable charges at £20.73 and £20.78 respectively, although in the case of RBS charges could be higher if the account holder bounced a cheque.
HSBC would charge just 75p under the scenario if it was the first time the customer had gone overdrawn during a six-month period.
Lloyds Banking Group defended its unauthorised overdraft charges, saying it had clear tariffs and it made every effort to ensure that customers were aware of them.


Updated on 10 February 2010
Source PA News