Build your perfect bank account.

[Amethyst]

Re: Build your perfect bank account.

Companies who claim direct debits off of your account (eg BT/Eon etc) get charged for setting up, amending, cancelling, representations etc on DD's. Thats by their bank/the bureaux that issues the requests. Anyway we have the charges to companies by one of the banks for administering the direct debits for a company. These figures are from 2006 and show that a 'bounced' DD that isnt paid is charged to the company at 18p for the initial collection attempt, 15p for representation if it bounces. Not really sure how those figures help. But I'd suspect the bank makes a profit on that figure per DD. Point being they charge twice for same thing (I guess they could split costing proportionally or something) and there therefore must be some kind of cost to the bank to bounce a DD if the claiming bank passes that charge on to the company.....does that make sense ?

Oh anyway yes then the claimer company charges the consumer to recoup their 15p extra cost for representation (umm £25 is a bit of a mark up), the consumers banks already charged the bureaux/claimer bank, and the bureaux/claimer bank passed that charge (poss plus a mark up) on to the claimer company.

Bacs Approved Bureaux Scheme (BABS) is for computer bureaux that submit transactions through the Bacs service on behalf of third party organisations.... ....Over half of the organisations using the Bacs service make their Direct Debit and Bacs Direct Credit payment submissions through our approved bureaux rather than submitting directly to Bacs.

[Amethyst]

Re: Build your perfect bank account.

Re Credit Unions I would be concerned about further regulation and input of the financial services industry quashing some of the benefits if they were to offer all the services the same as the banks. It would kind of make them more into mutual societies wouldnt it. They also need a heck of a lot more in the way of advertising and accessibility to make them viable to the general consumer market.

[TANZARELLI]

Re: Build your perfect bank account.

They are not out to make a profit though and any surplus money is returned to its members in the form of a dividend. Each member has the right to see how the credit union they are members of is being run and how it is performs.

Also each member has a vote which they can use at the Credit Union AGM this can be used to elect the Board of Directors. The Board then appoints a credit committee.

[Amethyst]

Re: Build your perfect bank account.

Isnt that the same as the old mutuals ?

They only had to make a profit to cover their operational costs, and had no need to generate an additional profit to return to shareholders(ie all the customers) and all customers held voting rights.

In the 1980s, British banking laws were changed to allow building societies to offer banking services equivalent to normal banks. The management of a number of societies still felt that they were unable to compete with the banks, and a new Building Society Act was passed in 1986 in response to their concerns. This permitted societies to demutualise'. If more than 75% of members voted in favour, the building society would then become a ltd company like any other. (off wiki btw)

So to me it seems the more like banks the credit unions get - with atm cards, debit cards, dd facilities and the like, the more in the footstep of mutual building societies they follow. And that needs protecting against doesnt it.

[enaid]

Re: Build your perfect bank account.

If your DD payment was refused to pay your credit card, you would be hit by both the bank and the CC company usually just the once for late payment, but then once again if it takes you over the limit. If your CC is with the same bank they are laffin their nuts off.

[Paule]

Re: Build your perfect bank account.

I would like to see fees/charges only taken when there are a certain amout of funds available.

ie your account balance is £5.00, then a payment bounces, or whatever, and the fee for this is £10 say.
I propose that they dont take the fee now as it would put you overdrawn, but ONLY take the fee what your balance reaches a certain level (or % of fees), say £50.

This way, you shouldnt be put overdrawn through charges plus it should flag up any hardship issues if your balance never gets up to the fee trigger level, or that you build up a lot of fees that arent being claimed.

Maybe if your a prolific charge reciever, a set percentage of of any credits to the account coud be offset in an account to cover estiamted charges, based on your last months charged, then after the month the excess released back to you.

I will try and explain

Month 1
Credits £500
Balance £500
Charges £20 (pay in month 2)

Month 2
Credits £500
Charge offset (5%) £25
Balance £475
Charges to pay £20 - co £25 (leaves £5 in offset fund)

Month 3
refund of offset balance £5
Credits £500
and so on..

The idea being that the charges are taken from your account when you pay into, rather than at a set date, which is usually when there is no money in the account.

I will try and write it up properly later, if this is as clear as mud

[TANZARELLI]

Re: Build your perfect bank account.

Isnt that the same as the old mutuals ?

They only had to make a profit to cover their operational costs, and had no need to generate an additional profit to return to shareholders(ie all the customers) and all customers held voting rights.

In the 1980s, British banking laws were changed to allow building societies to offer banking services equivalent to normal banks. The management of a number of societies still felt that they were unable to compete with the banks, and a new Building Society Act was passed in 1986 in response to their concerns. This permitted societies to demutualise'. If more than 75% of members voted in favour, the building society would then become a ltd company like any other. (off wiki btw)

So to me it seems the more like banks the credit unions get - with atm cards, debit cards, dd facilities and the like, the more in the footstep of mutual building societies they follow. And that needs protecting against doesnt it.

I wouldn't envisage them offering ATM's and the like merely the facility to pay bills by DD and SO etc. I would imagine that you would still need to go into the branch to withdraw money. You are also encouraged to save while repaying a loan so that this will give you a lump some following the repayment of any loan you have had with them, which also has a minimal interest rate applied to it in the first place which is totally different to banks who apply higher rates to make profit and a million miles away from sub prime lenders. I have recently applied for a loan to purchase a car and the credit committee wanted me to meet with their debt buster, which I happily did to go through some paperwork and also discuss how things were going for me financially. This was to make sure I could meet my financial commitments prior to lending, but was nothing like a demands and needs questionnaire aimed at attempting to cover the backside of a bank. Could you ever see a bank doing this prior to lending unless they were trying to sell me something or stitch me up with some cruddy insurance or a extortionate interest rate? I can't.

I do see what you are saying though Ame, but I can't help thinking that Credit Unions are the way forward and I for one am happy to shout out about them to anyone who will listen.

[argentarius]

Re: Build your perfect bank account.

Nothing that has been said so far deals with the need for banks to make a profit on running current accounts.

Banks are not charities.

Either charges for overdrawing without permission and the like are far more than the relevant costs - like now - or all accounts will have to have either monthly fees or fees for each transaction - or a combination of the two.

Nobody has said "I'm happy to pay £50 a month just for having a bank account" or "I'm happy to pay 50p for each ATM withdrawal and £1 for each cheque I write".

This thread is going to be unrealistic whilst there is no condition requiring the suggestions to fit into a framework which gives the banks an adequate return on investment.

What I mean is that, if all the comments made thus far were implemented as law, all the banks would cease operating current accounts because they would make no money at all.

And please, please, nobody try suggesting that interest margin on balances covers the costs AND generates an adequate return on capital, because that's just patently wrong.


Incidentally the comments on mutuals - Amethyst's, I think - are interesting but not quite correct. Mutuals (e.g. building societies) still need to generate a profit because otherwise they'd have no capital and be unable to continue lending.

Those who think that the whole commercial banking world can be replaced by credit unions must all shop at the Co-op and not use Sainsbury's, Tesco, and the rest. It's funny that the Co-op now has significantly less than 10% of the groceries market - the only significant mutual business in the country (other than building societies) and contracting for decades.

[Curlyben]

Re: Build your perfect bank account.

Sorry argentarius I believe that I have already mentioned this way up at the top of the thread, post #3 in fact.
If you missed it I have highlighted the salient points for you.

Yes at the end of the day they are a business and they are meant to make money, but that does preclude personable service rather than time wasting "Account Reviews" AKA How Can I fleece Mr CB For More Money.

So that being said what would I like from my bank account.
I'm happy to pay a monthly fee for service that I might actually use, as mentioned above.
If I make a mistake I fully expect to have some charges levied, but they must be proportional to the transgression. So I exceed my O/D charge me what it costs, a couple of quid, but then I'd expect a reasonable interest rate for doing this, say upwards of 20%.
(So my £1.26 mistake doesn't end up costing £39 for 4 DAYS !!! (Thursday-Monday), more like sub £5, closer to what I cost the bank. Letter arrived on Saturday to tell me I was going to be charged, nice of them that.)

I'd better stop now as I could continue to rant all afternoon, and that's not really wanted here.

To sum up what I'd like is the bank to act in a reasonable and personable manner in their dealings with me.
Oh yeah and get rid of the off shore call monkeys

[Amethyst]

Re: Build your perfect bank account.

I think most posts and thoughts on this thread so far are viable. Nobody expects something for nothing and I'm pretty pleased about the thought that has gone into peoples comments. They do allow for profit by the banks either in interest, charges or monthly fees (look at the think banking thread too). As it stands at the moment too larger percentage of profit is made from the poorer people and that is subsidising the more comfortable people and that is wrong.

This will all help with the PCA response so Thank You.

[TANZARELLI]

Re: Build your perfect bank account.

Not getting into a discussion about supermarkets but no the coop near me is a rip off lol.

I totally understand that banks need to make a profit thats fine. I also dont mind paying for a service if its something thats of use to me. Gimmics and useless stuff they can stick it where the sun don't shine. What I don't want to pay for is for something which is unlawful and is clearly a profit from a penalty.

Technology has got cheaper and has I would imagine reduced the cost to the bank, however the price of charges have steadilly increased over the years. Even when the banks make out they have recuced the charges and you look into them deaper they actually work out making customers worse off.

I could actually mention bonuses but thats a different ball game altogether, but if the bank cut back on paying out these then surely the shareholders would see more money coming in.

[righty]

Re: Build your perfect bank account.

The banks can make profits the same way the have always made profits by lending a savers money to borrowers & charging interest on the loan.

Building Societies changed when they bribed customers to vote for change many of who must now be regretting that decision

[TANZARELLI]

Re: Build your perfect bank account.

The banks can make profits the same way the have always made profits by lending a savers money to borrowers & charging interest on the loan.

Building Societies changed when they bribed customers to vote for change many of who must now be regretting that decision

Shares following switches.

[enaid]

Re: Build your perfect bank account.

Well I got one of these from each continent, they may give us an idea how other countries run there accounts.


http://www.anz.com/documents/au/feec...kacctfees2.pdf

https://www.particuliers.labanquepos...nglaise_v3.pdf

http://bankofindia.com/UserFiles/File/servicecharge.pdf

http://www.absa.co.za/absacoza/conte...003511060aRCRD

https://www3.bankofamerica.com/efulf...0080509.htm#f1

[Celestine]

Re: Build your perfect bank account.

And even closer to home................... :tinysmile_aha_t:

Eire Banking System v UK Banking System - Legal Beagles

How can customers in Eire pay less than £10 for returned DDs etc, yet if they live in UK and bank with same Irish bank they pay £35??