Banks agree to improvements - OFT Press Release

[EXC]

Re: Banks agree to improvements - OFT Press Release

Not too keen on the competition (and thus transparency) of just ''visible' charges tho ?

Me neither but don't forget that the remedy of biggest issue in the Market Study - the charges - have yet to be addressed.

[Smasher]

Re: Banks agree to improvements - OFT Press Release

A bit dissapointing that Which? didn't take part. Not to mention Martin Lewis who as you know recently gave us both a ticking off after complaining about the lack of consultation and, when presented with the opportunity on a plate, couldn't be bothered.

''As you'll remember, when the court case and hold was initially announced there was no consultation with any of the campaigning groups - it was simply done. We of course need to have a role in this.''

Probably just as well imo. It was a great idea to do this and might only have been diluted if the likes of ML & Which? had chimed in.

Good stuff guys!

[Amethyst]

Re: Banks agree to improvements - OFT Press Release

6.15. We would urge the OFT to regulate an opt-out system for consumers in respect of the
imposition of insufficient funds charges altogether. One of the most serious complaints
from consumers is the lack of control over how their account is operated. There would
be fewer grounds for complaints, and greater consumer control over their finances, if
they had the option not to allow payments to go out of their accounts when there are
insufficient funds. Whilst we accept that there may be minor costs associated with such
an automatic system, those costs should properly reflect the cost to the banks. It is our
experience that consumers would accept such fees, if they were proportionate to the
actual costs involved.

OFT follow up interim report

3.14 The OFT would like all consumers to be given greater control as to whether they enter into unarranged overdraft. This is supported by consumer research that indicated that consumers would value the ability to opt out of unarranged overdrafts. Indeed, the OFT found that more than half of consumers said that they would opt out of having the ability to go into unarranged overdraft if they could, and over half said that
they would not want a debit card transaction processed that would take their current account into unarranged overdraft.

I wonder how people would feel about this system being introduced.


It is possible - in France they have a system where you opt to have debit card payments taken instantly or you can opt to have them processed once per month. There are different fees for each option but it does show options can be made available.
(eg: Mastercard with systematic verification30,00 €/year
l Mastercard or Visa immediate debit card35,00 €/year
l Mastercard deferred debit card44,00 €/year




Guaranteed items are cheques (although the phase out of the cheque guarantee card makes this less of an issue) and debit card payments (which the system above would alleviate even tho it may 'cause embarassment' on the shop floor - shop floor limits being removed would also carry a greater cost to banks and stores)

[Amethyst]

Re: Banks agree to improvements - OFT Press Release

Something in addition to this despite RBS changing their fees to charge more for a paid DD (£15) and only £5 for a unpaid DD, the South African Competition Commission report shows that an unpaid DD actually has MORE cost to the bank (something like 30p) than a paid DD (something like 9p) so a ''Please bounce everything barring guaranteed items'' request/account would incur a cost, which of course should be proportional to the true cost (say £1.50 each bounce)

[natweststaffmember]

Re: Banks agree to improvements - OFT Press Release

Are you thinking US System of OPT IN to overdraft services? (I seem to be the only one who seems to like the system)

[Amethyst]

Re: Banks agree to improvements - OFT Press Release

Lloyds Control Account - Lloyds TSB - Terms and Conditions
which has been available since January 2009.

Personal banking

> Current accounts > Classic Account > Control
Control

For £10 a month, Control helps you take charge of your money in two ways:
1. Stopping your account from going into Unplanned Overdraft.
2. Giving you the tools to keep you informed about what's going on with your account.
How do I register for Control?
1. Stopping your account from going into Unplanned Overdraft.
Important - Control stops transactions when there is not enough money in your Classic Account. This means your mortgage or rent, loan and credit card repayments and utility bills won’t be paid if they would take you over your limit.
When there’s money or credit available in your account, transactions will go through exactly as normal. However, if you try to pay for something when there’s not enough in your account, or a Planned Overdraft, to cover it, Control will automatically stop the transaction going ahead. This includes:

• Visa Debit cards used in shops and online (including cash withdrawals).
• Direct Debits (including mortgages, loans and rent).
• Standing orders and,
• Cheques which are not guaranteed with a cheque guarantee debit card.

If you receive a new debit card, please start using it straight away. You should destroy your old card, because if your current debit card allows you to guarantee cheques, using it in this way could result in you going over your limit.
There are a couple of exceptions to this, so you could still go into an Unplanned Overdraft in situations such as:

• You’ve made a payment with a cheque which is guaranteed with a cheque guarantee debit card.
• If you’ve used your debit card somewhere where a retailer can’t check with us, like on an aeroplane.

See the Control terms and conditions which are set out below for more details.
In the unlikely event that you do go over your limit and use and Unplanned Overdraft, Control helps by removing the daily Unplanned Overdraft fees.
Remember, you also have until 3.30pm (UK time) each weekday to pay enough money into your account to ensure that any amount you have asked us to pay earlier that day will be covered. Text Alerts (part of the Mobile Banking Pack) will keep you up to date with the state of your balance.

Classic Account with Control
Monthly Unplanned Overdraft fee
£15
Daily Unplanned Overdraft fee
No daily fees
Returned item fee
£10 per item (reduced from £20 per item). Maximum of three fees per day.

[Amethyst]

Re: Banks agree to improvements - OFT Press Release

The Lloyds account is an expensive option,. but cheaper than incurring multiple fees. So I dont think its right yet for what we were talking about.

Article in This is Money - today.

If the industry were to adopt such a measure, it could drastically add to the amount of time it takes to pay for items in retailers, as each transaction would have to be checked with the bank before going through.
Most retailers allow transactions to go through immediately if they are below their 'floor level', a maximum amount of risk each retailer is willing to take per transaction.
All of these moderate transactions, perhaps all below £20 in some stores, are held over until the end of the day when they are passed on to the customers' banks en masse. This is only possible if unauthorised overdrafts exist on the accounts to pay out cash even if there is not enough funds deposited.
If this system were removed, facing the possibility of unpaid bills, retailers would have to wait while their payment machine makes contact with a bank and approves the transaction, which increases the time each customer has to wait.
A spokeswoman for Lloyds said: 'For a lot of people, this is a big step to take. It means any payment would be bounced, including mortgage payments, so it's not right for everybody, only for those who are struggling to manage their finances.'
A customer will have their credit file marred if a payment is rejected by their bank and returned to a creditor, which may prevent the customer from obtaining loans in future. Banks insist this option should only be taken out by those who regularly overspend and rack up substantial overdraft charges per year.

[enaid]

Re: Banks agree to improvements - OFT Press Release

Don't know if this in fact mentioned in any of the ideas put forward, but I personally think the banks should be prohibited from selling these so called debts on to awful DCA's.
Some of their inhouse collections depts are bad enough if you read some of the cases.
If a financial institution can not manage to collect it's money owed in a decent and lawful manner then they shouldn't be lending it out.
This to me is one of the worst parts of this whole saga, having been at the receiving end of some quite scary correspondence re my lads debts.
By the way I am not against DCA's at all, just the way some of them go about their so called business.
Also if the banks are made to get back whats owed even though they consider it too costly, it may make them think twice about irresponsible lending.

[Amethyst]

Re: Banks agree to improvements - OFT Press Release

follow up to this due from OFT tmw.