Bankrupts Being Refused Basic Banking

[1929crash]

I don't read the Daily Mail - it's for Tory scumbags. I don't know why you are so angry all the time. If you want to froth at the mouth about the banking system, go right ahead. But no need to use me as a punchbag eh? You could always beat your wife/dog instead like you usually do. :angry:

You have the cheek to accuse others of being angry all the time. Chip and shoulder and error are three words that come to mind when I see you've posted something.

Bl00dy Sun reader.

[Cygnus Alpha]

You have the cheek to accuse others of being angry all the time. Chip and shoulder and error are three words that come to mind when I see you've posted something.

Bl00dy Sun reader.

Fair play to you. You have every right to come back at me since me and the other 2 whipped your sorry ass about your economic illiteracy over the oil price. Still you need to get over it otherwise you come across as a vindicative little sh1t.

[1929crash]

Fair play to you. You have every right to come back at me since me and the other 2 whipped your sorry ass about your economic illiteracy over the oil price. Still you need to get over it otherwise you come across as a vindicative little sh1t.

You can't even get that right, Beta. The argument was not over the oil price per se, but over how much fossil fuel inputs are required for agriculture. Still, I suppose to you science and scientology are one and the same because they both begin with the same letters.

[Cygnus Alpha]

You can't even get that right, Beta. The argument was not over the oil price per se, but over how much fossil fuel inputs are required for agriculture. Still, I suppose to you science and scientology are one and the same because they both begin with the same letters.

Nope. Everytime you were confronted you ran away and changed the subject. You had you sorry ass well and truly whooped. So if you want to stalk me cos of that then carry on. You freak.

[SNACR]

That is a really heart-wrenching tale. But you still haven't explained to me why having a choice of two banks for a basic bank account is so bad and merits your over the top bleeding heart rhetoric.

Simple, can you or I set up a bank? No.

Therefore being able to operate as a bank is a closed shop privilege. A fair price for this priviliege should be to provide any UK resident, without a fraud conviction, access to free banking or at worst banking at the genuine cost of providing it.

[1929crash]

Nope. Everytime you were confronted you ran away and changed the subject. You had you sorry ass well and truly whooped. So if you want to stalk me cos of that then carry on. You freak.

[Si1]

Simple, can you or I set up a bank? No.

Therefore being able to operate as a bank is a closed shop privilege. A fair price for this priviliege should be to provide any UK resident, without a fraud conviction, access to free banking or at worst banking at the genuine cost of providing it.

partly incorrect here. basic bank accounts do not have credit facilities, cheques etc. So they dn't require a banking license to run them, also rrequiring far less back office staff to operate re: the credit facilities, debit cards etc which they don't require, DDs and SOs being apparently simpler. Consequently some small building societies operate them because, pretty much, they can, despite not having banking licenses. The potential for building socs and friendly societies to run this kind of thing is large - since the account is so simple. I hazard that the reason they largely don't is economies of scale.

Having said that, it really doesn't look like the market has failed here anyway. My above point just shows that it is unlikely to fail either, as there are more potential players than just banks.

edit: think it is less to do with banking licenses and more to do with economies of scale, the smaller ones just don't do credit

Edited September 8, 2009 by Si1

[Cygnus Alpha]

Simple, can you or I set up a bank? No.

Therefore being able to operate as a bank is a closed shop privilege. A fair price for this priviliege should be to provide any UK resident, without a fraud conviction, access to free banking or at worst banking at the genuine cost of providing it.

Thank you. At least your now trying to deal with the subject rather than have a go at me for what banks do or don't do.

I think the idea of a social obligation by banks is a good one. As long as such social obligations are spread across the whole sector so that no individual bank is disadvantaged. Another principle should be that such social obligations are not excessively onerous for the banks. For example, I saw on another thread that someone suggested that a bank should forgive the debt of a property speculator because the bank is partially state owned. This would be a big no no for me as social obligations should not be to the extent that they could be potentially ruinous for banks.

[SNACR]

partly incorrect here. basic bank accounts do not have credit facilities, cheques etc. So they dn't require a banking license to run them, also rrequiring far less back office staff to operate re: the credit facilities, debit cards etc which they don't require, DDs and SOs being apparently simpler. Consequently some small building societies operate them because, pretty much, they can, despite not having banking licenses. The potential for building socs and friendly societies to run this kind of thing is large - since the account is so simple. I hazard that the reason they largely don't is economies of scale.

Having said that, it really doesn't look like the market has failed here anyway. My above point just shows that it is unlikely to fail either, as there are more potential players than just banks.

Debit card is going to have to be issued by Visa or Mastercard and I'd have thought you'd have to cosy up to APACS to get your foot in the door of the CHAPS/BACS transfer system - would they play nice with the newbie?

Most of these things offered by building societies etc usually say in the small print that they're run on their behalf by usual suspect large clearing bank.

[Si1]

Debit card is going to have to be issued by Visa or Mastercard and I'd have thought you'd have to cosy up to APACS to get your foot in the door of the CHAPS/BACS transfer system - would they play nice with the newbie?

Most of these things offered by building societies etc usually say in the small print that they're run on their behalf by usual suspect large clearing bank.

credit cards -yes, they do operate them this way. But this requires a back-office of 100s of staff to handle the credit facility. I think there are only about half a dozen or so credit card issuers active now aren't there? Even many high street banks sub-contract this off.

the bulding socs with basic accounts that I know of reasonably well - nationwide and Yorkshire BS - do operate them in-house -having said that these apparently (going from the OP) don't offer the service to undischarged bankrupts. My point of course being that they bring competition in to the market helping reduce the chance of market failure in this case.

I would agree there may be a case for supportive legislation if suitable accounts did not exist, but only so far as having a basic account branded under Post Office or National Savings, which there almost is one of.

re: debit card issue - I for one would find a cash-card the real bare-minimum, with SO provision also v useful, the really esential facility being to receive SOs from salary. Building Socs routinely issu LINK cash cards associated with certain instant-access savings accounts, so already have the infrastructure for the minimal basics.

Edited September 8, 2009 by Si1

[ader]

We should still lock them up though innit.

[SNACR]

credit cards -yes, they do operate them this way. But this requires a back-office of 100s of staff to handle the credit facility. I think there are only about half a dozen or so credit card issuers active now aren't there? Even many high street banks sub-contract this off.

the bulding socs with basic accounts that I know of reasonably well - nationwide and Yorkshire BS - do operate them in-house -having said that these apparently (going from the OP) don't offer the service to undischarged bankrupts. My point of course being that they bring competition in to the market helping reduce the chance of market failure in this case.

I would agree there may be a case for supportive legislation if suitable accounts did not exist, but only so far as having a basic account branded under Post Office or National Savings, which there almost is one of.

re: deboit card issue - I for one would find a cash-card the real bare-minimum, with SO provision also v useful, the really esential facility being to receive SOs from salary.

I wouldn't want the taxpayer to fund the cost of provision or the state to be the provider. I would compel every bank to provide a basic account (debit card, direct debit, standing orders, online banking) to anyone who wants it, including bankrupts.

I'd have used the bailouts to extract it as a quid pro quo and at the same time I'd have demanded an end to their iniquitous charges for direct debits bouncing etc.

[Si1]

I wouldn't want the taxpayer to fund the cost of provision or the state to be the provider. I would compel every bank to provide a basic account (debit card, direct debit, standing orders, online banking) to anyone who wants it, including bankrupts.

I'd have used the bailouts to extract it as a quid pro quo and at the same time I'd have demanded an end to their iniquitous charges for direct debits bouncing etc.

that might be fair - if, indeed, such accounts were not available on the market

I'd have thought that Barclays and Co-Op bank (as the only operating this kind of universal account) would be concerned if a nationalised bank specially went into competition with them on this, maybe leading, via unintended consequences, to a reduction in provision?

[mikeymadman]

The people that are really stuffed are the people that go bankrupt owing money to Barclays and the Co-Op, as neither will give the bankrupt an account if they went bankrupt owing them money.

[SNACR]

The people that are really stuffed are the people that go bankrupt owing money to Barclays and the Co-Op, as neither will give the bankrupt an account if they went bankrupt owing them money.

Fairly unlikely, but not impossible someone might owe both. If it was someone like a plumber it sounds a bit like cutting off their nose to spite their face when they just start up again and another bank gets the business.

Considering the others won't give a bankrupt an account at all if someones going that way and banks with anyone but Barclays and Coop they might as well make sure they take them for as much as possible.

[Cygnus Alpha]

I wouldn't want the taxpayer to fund the cost of provision or the state to be the provider. I would compel every bank to provide a basic account (debit card, direct debit, standing orders, online banking) to anyone who wants it, including bankrupts.

I'd have used the bailouts to extract it as a quid pro quo and at the same time I'd have demanded an end to their iniquitous charges for direct debits bouncing etc.

As I mentioned before, a bankrupt can open a savings account which will allow online banking, a cash card and standing orders. So they are not as hard done by as some make out.

Direct debits and debit cards give rise to credit risk (and additional fraud risk) which is why banks are more picky about those.

[@contradevian]

Direct debits and debit cards give rise to credit risk (and additional fraud risk) which is why banks are more picky about those.

No they don't. Prepaid debit cards (Mastercard and Visa) are available to all, including bankrupts. There is no risk as they simply don't pay out unless you fund the card. There is only an ID check and no one is refused.

Banks don't want to operate on that basis. They hope you will go overdrawn so they can fleece you.