Uk Banks Make £4bn A Year From Overdrafts

[ca-uk]

The report comes days before regulators are due to announce a crackdown on excessive overdraft charges and other unfair penalties that hit borrowers. The Office of Fair Trading is expected to announce its final decision next week on whether to impose a cap on penalty charges levied by banks and credit card lenders. It is expected to set a limit on the charges that lenders can make when borrowers fail to make credit card payments on time or exceed their overdraft limits.

riggghhtt. so these poor unfortunate people that can't manage basic mathematics - i.e

(total spending) > (total income) = debt

are once again being helped out.

fair enough if something goes wrong at the bank which temporarily means you go in the red - there should be no charge.

however, if you're consistently in the red, heck, i'd say increase charges exponentially. why is it that the stupid are always helped out, while the clever (i.e. savers or those who balance their monthly budget) are made to look stupid.

increase charges, make people bankrupt and put them in the workhouse. harsh as it may be, how else are these numpties going to learn that debt = bad if you can't repay it.

[RentingQuiteNicely]

riggghhtt. so these poor unfortunate people that can't manage basic mathematics - i.e

(total spending) > (total income) = debt

are once again being helped out.

fair enough if something goes wrong at the bank which temporarily means you go in the red - there should be no charge.

however, if you're consistently in the red, heck, i'd say increase charges exponentially. why is it that the stupid are always helped out, while the clever (i.e. savers or those who balance their monthly budget) are made to look stupid.

increase charges, make people bankrupt and put them in the workhouse. harsh as it may be, how else are these numpties going to learn that debt = bad if you can't repay it.

****

[ca-uk]

i take it that means you regularly go into your overdraft? otherwise why would you have a problem?

[ShirtyTheSlightlyAggresiveBear]

So UK banks make a fair portion of there profits from overdraft charges then. If the OFT start imposing limits to these 'borrowers penalty' charges then they will start to look elsewhere to make the difference. It wont take much of a stretch of the imagination to see that annual account keeping charges to be introduced or increased if they are already in place on normal accounts. So we go from a system that largely targets those that fail to meet there obligations to the lender to a system that everyone has to pay in someway.

Take a look at the banking system in Australia. The banks there do exactly this, monthly account charges, limited number of transactions per month, extorniate ATM charges etc. Incidentally overdraft bank accounts are rarity in oz, mainly applicable to business accounts.

[RentingQuiteNicely]

Nope - I do not have an overdraft, but I bet you've got shares in a bank?

Bank charges are infact illegal and many people are now taking banks to court and recovering thousands of pounds of their own money. The banks know they don't have a leg to stand on and don't even bother to defend themselves.

Bank charges as we know them are going to become a thing of the past and about time too.

You are a thoroughly nice bloke by the way and I'm sure you must have a great many friends. People like you deserve to be happy!!!

[watchinandwaiting]

Litigation Edited March 31, 2006 by watchinandwaiting

[ca-uk]

Nope - no shares in a bank.

I save as much as i can each month, and see it going the same way as ShirtyTheSlightlyAggresiveBear - the problems caused by indebted numpties will, doubtless, then become my burden in some shape or form. The same as most problems in this country that are caused by the brain dead and stupid.

Posted on: Jan 17 2006, 09:36 AM

My rent is £950 per month and the landlord has just put it on the market for £259,950.

Work that one out........

Posted on: Jan 11 2006, 05:18 PM

My new landlord nearly took my arm off when I offered 750 for our place. It was up for 850. He obviously didn't have people queuing up to rent it.

As an aside I happen to know he bought it in 2004 for 205,000 - poor sod!!

I suppose budgeting can be hard when you don't know how much rent you are paying?

[RentingQuiteNicely]

I moved house in February Sherlock

I am also saving quite nicely thankyou very much but I am not in quite the same league as yourself when it comes to vindictiveness.

Bank charges by all means but to charge someone in excess of £30 to send them a letter is hard to justify. Unless of course you a good little saver with a nasty streak.

[ca-uk]

i don't think it vindictive to say that people who constantly use money without authorisation should pay.

as i said, if the mistake or issue is the fault of the bank, then no charges should be levied.

how much worse do you think the debt situation will get when banks aren't allowed to warn people that misdemeanours won't be punished?

as usual with this country, those of us that play within the rules will be charged and punished because of those who don't.

when i read a contract i see the charges and think must never go negative - other people either don't read it or have the typical 'just sod it and worry about it later' attitude.

i say potato, you probably say fluffy bunny. only one of us resorts to name calling.

[watchinandwaiting]

i don't think it vindictive to say that people who constantly use money without authorisation should pay.

as i said, if the mistake or issue is the fault of the bank, then no charges should be levied.

how much worse do you think the debt situation will get when banks aren't allowed to warn people that misdemeanours won't be punished?

as usual with this country, those of us that play within the rules will be charged and punished because of those who don't.

when i read a contract i see the charges and think must never go negative - other people either don't read it or have the typical 'just sod it and worry about it later' attitude.

i say potato, you probably say fluffy bunny. only one of us resorts to name calling.

Anyones situation can change, unemployment, illness etc etc.

Have you been there?

Edited March 31, 2006 by watchinandwaiting

[RentingQuiteNicely]

Oh I do apologise - I called you a name. Please accept my apologies.

Try posting your thoughts here http://www.consumeractiongroup.co.uk/forum...isplay.php?f=22

[ca-uk]

i haven't been unemployed, nor long term sick.

however, i started saving as soon as i started working at 16.

i left a job in december to start my own business - and was able to do so thanks to my previous financial prudence.

i am always of the opinion that a rainy day may be just around the corner - but when it does rain i'll now be able to survive it for a couple of years.

bank charges are about unauthorised debt.

if you lose your job or become ill, you should have contingency either through financial prudence or by having bought the right insurance for your situation.

i try to avoid giving people money unnecessarily, so i always opt for the first option.

people should take pre-emptive action before getting into the state of bobbing around in unauthorised overdrafts.

i don't wish bad things on people - i just wish people would smarten up, and further handholding paid for by those who don't get assistance is just wrong in my book.

i think there are too many people who look to others to sort out problems of their own making.

i'll concede the point on illness - i shall modify my policy to also allow leniancy for illness, as long as it is not due to smoking, drinking excessively or any other self inflicted harm.

[theChuz]

riggghhtt. so these poor unfortunate people that can't manage basic mathematics - i.e

(total spending) > (total income) = debt

are once again being helped out.

fair enough if something goes wrong at the bank which temporarily means you go in the red - there should be no charge.

however, if you're consistently in the red, heck, i'd say increase charges exponentially. why is it that the stupid are always helped out, while the clever (i.e. savers or those who balance their monthly budget) are made to look stupid.

increase charges, make people bankrupt and put them in the workhouse. harsh as it may be, how else are these numpties going to learn that debt = bad if you can't repay it.

For persistant 'offenders' - works for me. People need to learn to take responsibility for thier actions, to often we pick people up and dust them off with a 'there there', f*ck that, if people get into ridiculous debt because of there poor spending habbits then they should work there proverbial balls off to give the lender thier money back.

Of course its more complicated than that, systems need to be in place to accept a degree of slack, which is why a sliding scale of penalty seems ok to me. Im not talking about the every now and again screw ups (we all make mistakes) but we as a society need to grow a f*ckin backbone, i.e dont have prisons that are based around rehabilitation have them as punishment. Dont have people who can rack up massives amount of debt (at the expense of others) then go bankrupt and not have to pay it back. Dont let people abuse the welfare system to the point which they do.

It should not be a right for people who do not contribute to society to take from it so much.

There are complications and exceptions and the 'system' could never be perfect but it would be a hell of alot better than what we have now. Many peopel today think that they are 'owed' something when they have not contributed at all. We may then get some respect back into society.

Toughen up i say.

[watchinandwaiting]

bank charges are about unauthorised debt.

How can a debt be unauthorised when it consists fo their charges.

They debit your account say £35.00 charge.....oops your suddenly £5.00 overdrawn, and by the way we will now charge you £30.00 for being overdrawn, tommorow they bounce that cheque you wrote for a tenner the other day.....oops another £35.00.......

This can happen without your knowledge!

It should not be a right for people who do not contribute to society to take from it so much.

What? Like £4bln

[theChuz]

yea like 4bln

[non-FTBer]

For persistant 'offenders' - works for me. People need to learn to take responsibility for thier actions, to often we pick people up and dust them off with a 'there there', f*ck that, if people get into ridiculous debt because of there poor spending habbits then they should work there proverbial balls off to give the lender thier money back.

Of course its more complicated than that, systems need to be in place to accept a degree of slack, which is why a sliding scale of penalty seems ok to me. Im not talking about the every now and again screw ups (we all make mistakes) but we as a society need to grow a f*ckin backbone, i.e dont have prisons that are based around rehabilitation have them as punishment. Dont have people who can rack up massives amount of debt (at the expense of others) then go bankrupt and not have to pay it back. Dont let people abuse the welfare system to the point which they do.

It should not be a right for people who do not contribute to society to take from it so much.

There are complications and exceptions and the 'system' could never be perfect but it would be a hell of alot better than what we have now. Many peopel today think that they are 'owed' something when they have not contributed at all. We may then get some respect back into society.

Toughen up i say.

Absolutely.

If people can't learn for themselves (as clearly the majority can't) then they need to learn the hard way.

I agree that people have circumstances that might morally make them deserving of some leniency, but in general why should people who manage their finances properly subsidise those who don't?

How can a debt be unauthorised when it consists fo their charges.

They debit your account say £35.00 charge.....oops your suddenly £5.00 overdrawn, and by the way we will now charge you £30.00 for being overdrawn, tommorow they bounce that cheque you wrote for a tenner the other day.....oops another £35.00.......

This can happen without your knowledge!

Why excatly would they be debiting your account for a £35 charge in the first place?? You should have known you'd done something to incur the £35 charge (or it is their error, in which case it'll all get refunded anyway) and should therefore still be responsible for going overdrawn.

Going overdrawn is bad financial management.

I've got close to going overdrawn, years ago (again before I got financially prudent and built up a cushion against rainy days ), and when I got close I called the bank and arranged something (a loan, a charge free temporary overdraft or whatever) so that I did not go into the red without their consent.

This is what the charges are about.... lack of consent for borrowing, not the borrowing in itself.

If you do not have consent to take something then when you take it that is called THEFT.

Just because a shopkeeper leaves a £20 note by the checkout do you steal it? no, thats theft. Even if you planned to return it later, its still theft.

I don't like to resort to petty insults... so watchinandwaiting I suggest you have a long hard think about this one and then you can agree with us.

[watchinandwaiting]

Absolutely.

If people can't learn for themselves (as clearly the majority can't) then they need to learn the hard way.

I agree that people have circumstances that might morally make them deserving of some leniency, but in general why should people who manage their finances properly subsidise those who don't?

Why excatly would they be debiting your account for a £35 charge in the first place?? You should have known you'd done something to incur the £35 charge (or it is their error, in which case it'll all get refunded anyway) and should therefore still be responsible for going overdrawn.

Going overdrawn is bad financial management.

I've got close to going overdrawn, years ago (again before I got financially prudent and built up a cushion against rainy days ), and when I got close I called the bank and arranged something (a loan, a charge free temporary overdraft or whatever) so that I did not go into the red without their consent.

This is what the charges are about.... lack of consent for borrowing, not the borrowing in itself.

If you do not have consent to take something then when you take it that is called THEFT.

Just because a shopkeeper leaves a £20 note by the checkout do you steal it? no, thats theft. Even if you planned to return it later, its still theft.

I don't like to resort to petty insults... so watchinandwaiting I suggest you have a long hard think about this one and then you can agree with us.

So if a direct debit hits the bank a week before it is due, and the bank pays it, this is theft?

I dont think so!!

But they charge you £30 for this "unauthorised" overdraft.........

[theChuz]

bit of a wishy washy (ya know what i mean) example:

If you shoplift something and i stand and shout at you and slap your ass, you might feel bad for a while but no doubt you will shoplift again.

If you shoplift and i kick the living sh*t out of you, then let you know that your next kicking will put you in hospital for weeks instead of the few days you've just had to suffer will you shoplift again? maybe, but i doubt it.

I wonder how many people you would have to put in hopsital for weeks before the masses realise that they really shouldnt be shoplifting, probably not too many.

As soon as your friends hear about it i reakon they will think think twice about stealing that £2 *thing*.

Dodgy example i know becauase there are many exceptions but the principle remains, if the punishment suits the offence then occurances of the offence will decline.

At the moment people are just getting shouted out and getting a small slap. Give them a beating if you want them to stop.

Agree'd overdrafts are there for a reason and i have no problem with people using them, well, i dont really have a problem with any of it, i just aint bov'erd.

[non-FTBer]

So if a direct debit hits the bank a week before it is due, and the bank pays it, this is theft?

I dont think so!!

But they charge you £30 for this "unauthorised" overdraft.........

If a DD hits the bank a week before its due then you have a good case to get the charges paid by the company that you signed the DD with (if they took the DD early according to your agreement with them).

Fact is that the money belongs to the bank.

Unauthorised overdrafts are just that - it is taking money from the bank that you do not have consent to take.

Direct Debits are generally very predictable and come along at regular intervals that can be budgeted for (if you're not a financial f**kwit). Also DDs are almost always preceded by an invoice at least 7 days in advance... so not much excuse really.

And just to top it off DDs are protected by the DD agreement (or whatever its called) where they can be immediately refunded if erroneous.

And to add to it all - you have an agreement or contract with the company that intiates the DD, this will have spelt out when they are entitled to take money, in exchange for what and when.... its up to you to make sure you have the funds for it.

Most banks are also quite lenient if you call them very quickly and tell them the DD wasn't expected and actually speak to them and explain. Most bank charges happen as most people just think they can ignore the problem and it will go away.... this kind of financial management eventually will end with bailiffs if nothing changes.... pure muppetry.

bit of a wishy washy (ya know what i mean) example:

If you shoplift something and i stand and shout at you and slap your ass, you might feel bad for a while but no doubt you will shoplift again.

If you shoplift and i kick the living sh*t out of you, then let you know that your next kicking will put you in hospital for weeks instead of the few days you've just had to suffer will you shoplift again? maybe, but i doubt it.

I wonder how many people you would have to put in hopsital for weeks before the masses realise that they really shouldnt be shoplifting, probably not too many.

As soon as your friends hear about it i reakon they will think think twice about stealing that £2 *thing*.

Dodgy example i know becauase there are many exceptions but the principle remains, if the punishment suits the offence then occurances of the offence will decline.

At the moment people are just getting shouted out and getting a small slap. Give them a beating if you want them to stop.

Agree'd overdrafts are there for a reason and i have no problem with people using them, well, i dont really have a problem with any of it, i just aint bov'erd.

The banks are doing just that really.

Beating people up by making massive profits out of their stupidity.... only problem is that the people are so stupid that they don't stop doing it.

FFS £4 billion.

Thats £66 for every man, woman and child in the UK!

I don't get charged a penny... so some other f**kwit is using my £67 worth

Edited March 31, 2006 by non-FTBer

[theChuz]

If a DD hits the bank a week before its due then you have a good case to get the charges paid by the company that you signed the DD with (if they took the DD early according to your agreement with them).

Fact is that the money belongs to the bank.

Unauthorised overdrafts are just that - it is taking money from the bank that you do not have consent to take.

Direct Debits are generally very predictable and come along at regular intervals that can be budgeted for (if you're not a financial f**kwit). Also DDs are almost always preceded by an invoice at least 7 days in advance... so not much excuse really.

And just to top it off DDs are protected by the DD agreement (or whatever its called) where they can be immediately refunded if erroneous.

And to add to it all - you have an agreement or contract with the company that intiates the DD, this will have spelt out when they are entitled to take money, in exchange for what and when.... its up to you to make sure you have the funds for it.

Most banks are also quite lenient if you call them very quickly and tell them the DD wasn't expected and actually speak to them and explain. Most bank charges happen as most people just think they can ignore the problem and it will go away.... this kind of financial management eventually will end with bailiffs if nothing changes.... pure muppetry.

The banks are doing just that really.

Beating people up by making massive profits out of their stupidity.... only problem is that the people are so stupid that they don't stop doing it.

FFS £4 billion.

Thats £66 for every man, woman and child in the UK!

I don't get charged a penny... so some other f**kwit is using my £67 worth

nah the banks are just slapping otherwise people wouldnt still be doing it Dont get me wrong £35 is a pain in the a** type charge, imagine if it was £1000 i bet people would make DAMN SURE they didnt go to far over drawn.

[watchinandwaiting]

I've just had Abbey take £110 from my account for being £140 overdrawn for 2 days - unknown to me - there was no contact from them to alert me to this problem, if so I could have resolved it same day.

Real people!

I’ve just had to go into my branch and practically beg that they extend my overdraft because THEY have charged me over £600 in charges since January. I told them that the reason I was over £1400 short plus the charges was because I had a dispute with the council and they got an AOE for my council tax which was taken all in one go in January. The Abbey told me that they will appeal to their underwriter to extend my overdraft to cover the charges that they have levied. I went into the bank to cancel my direct debits but when the girl realised I was cancelling their (Abbey) insurances then she came up with this idea of appealing to the underwriter.

I bought some things over the ebay and payed by paypal, the unfortunate thing was my dad died I had to go back home and finance the whole funeral and the rest+I obviously wasn't in the country so therefore coudn't check what is happening with the account. In the meantime all the do's for paypal came through around 8 of them( each for no more then £12) and they bounced me off my overdraft of £900.

Edited March 31, 2006 by watchinandwaiting

[non-FTBer]

Real people!

I've just had Abbey take £110 from my account for being £140 overdrawn for 2 days - unknown to me - there was no contact from them to alert me to this problem, if so I could have resolved it same day.

Sounds like a very big charge for 2 days overdrawn. Maybe he'll learn his lesson and not take the banks money without permission next time!

Its the unknown to me bit that speaks volumes.

If you don't know what your bank balance is (especially when you are running near the red - I never get anywhere near so admittedly I don't check) then its no surprise that you are getting stung for silly charges when you take their money unexpectedly.

He will have signed up to these charges when he opened the account (or notified of increased charges, as agreed in the contract he signed on opening the account). If he didn't like what the charges said he should not have gone into an unauthorised overdraft or have not opened the bl00dy account.

Real people my ars3. Seems like another way of saying idiot to me!

I bought some things over the ebay and payed by paypal, the unfortunate thing was my dad died I had to go back home and finance the whole funeral and the rest+I obviously wasn't in the country so therefore coudn't check what is happening with the account. In the meantime all the do's for paypal came through around 8 of them( each for no more then £12) and they bounced me off my overdraft of £900.

So he's already in his overdraft (agreed I assume) of £900. Well done.

The funeral is unfortunate. I'm sure the bank would be fairly lenient and show some compassion (otherwise a friendly word with the local paper would do the trick).

WTF can't he check his account? Why didn't he know what was in it already?

Has he heard of phone banking? Internet banking? Calling his branch/account manager?

Another fuc**ng idiot IMHO. Yet again, someone else who didn't properly manage their money and got stung by charges.

CA_UK.... why don't you try and find an example where the charges were high and the person involved is completely blameless of any financial idiocy.

I’ve just had to go into my branch and practically beg that they extend my overdraft because THEY have charged me over £600 in charges since January. I told them that the reason I was over £1400 short plus the charges was because I had a dispute with the council and they got an AOE for my council tax which was taken all in one go in January. The Abbey told me that they will appeal to their underwriter to extend my overdraft to cover the charges that they have levied. I went into the bank to cancel my direct debits but when the girl realised I was cancelling their (Abbey) insurances then she came up with this idea of appealing to the underwriter.

So its the Council Tax departments fault.

If its a DD that is erroneous then it can be immediately sorted via the DD guarantee.

And if any costs are incurred that the bank won't refund then ask the bank for an invoice for the charges, and send it on to the council along with a letter saying you will take them to court if they don't reimburse you - problem solved, stop your whingeing.

Edited March 31, 2006 by non-FTBer

[theChuz]

Real people!

Real people as apposed to the imaginary sort.

This is what im on about, 'i tried to explain its all the councils fault', ' i could of resolved it on day one but i cared so little about it at the time i couldnt be botherd to make sure the money was in my account'

Is it the banks fault the guy was in disupte with the council, is someones financial mismanagement the banks fault? Is it the banks fault that some guys dad died and it took his ebay purchases over his already expended? overdraft of £900.

Dont get me wrong, i use my overdraft myself, its an agreed overdraft and i understand that if i take money from the bank which is above my agreed limit then i will have to compensate the bank for doing so.

People need to take responsibility for thier actions. Again its not that simple i know there will always be exceptions and no system will be perfect but its the whole.. well ive got a problem therefore other people should help me. 'Other people' owe you f*ck all in this life.

Edited March 31, 2006 by theChuz

[watchinandwaiting]

He will have signed up to these charges when he opened the account (or notified of increased charges, as agreed in the contract he signed on opening the account). If he didn't like what the charges said he should not have gone into an unauthorised overdraft or have not opened the bl00dy account.

These charges are unlawful

Q. I have been charged (£20, £25, £35 etc...) by my bank due to insufficient funds. This was entirely my own fault. Do I still have grounds to start legal proceedings against them for recovery?

A. The law is very clear on this. If you have been penalised for breach of contract by means of disproportionate penalties regardless of how the breach came about then you may have grounds to recover your money.

[non-FTBer]

'Other people' owe you f*ck all in this life.

Maybe you should have that as your sig. I like it.

Some people (Real people) seem to have not learnt that lesson yet!