Former senior NatWest executive says bounced cheque cost £4.50p

[Conniff]

Whilst looking for information on something completely different for one of the other forums, I was side tracked by something that came up in google, this speech in Parliament last year. It is a party site, but don't let that put you off.

 

It really is superb and the sort of speech that all MPs should be making.

 

As a little taster:

 

“This problem arises from the banks using poverty as a source of profit? a great deal of profit. The bank commission of BBC 2’s “The Money Programme”, which included eminent business academics and a former senior NatWest executive, concluded that the absolute maximum administrative cost to a bank of processing a bounced cheque, the most labour-intensive of the processes in question? is £4.50.

 

and

 

They are mugging their customers, and the OFT and the Government are letting them get away with it. If a backstreet lender were doing the same, the OFT would close it down within weeks, so what is being done?”

 

 

Liberal Democrats - House of Commons (Westminster Hall) - Bank Penalty Charges

 

 

P.S. Now I can't remember what I was looking for.

Edited January 7, 2009 by Conniff

[eviltwin_sco]

P.S. Now I can't remember what I was looking for.

i know that feelinggg

 

brilliant find though

 

it totally reiterates what we knowwwwwwwwwwww and have been fighting would have been nice to have him on the bbc cant pay wont pay

which should have been called cant pay CANT PAY blood - stone! (wont pay implies you have a choice)

[Conniff]

I see it has gone now, wish I had quoted the whole speach.

 

And I never did remember what I was looking for.

 

Found it again - Liberal Democrats - House of Commons (Westminster Hall) - Bank Penalty Charges

 

if anyone is interested.

Edited January 7, 2009 by Conniff

[eviltwin_sco]

i found this but not sure if this si someone else quting without recognition or source

 

Evening Times: News

 

his problem arises from the banks using poverty as a source of profit—a great deal of profit. The bank commission of BBC 2’s “The Money Programme”, which included eminent business academics and a former senior NatWest executive, concluded that the absolute maximum administrative cost to a bank of processing a bounced cheque—the most labour-intensive of the processes in question—is £4.50. For all other items, such as unauthorised overdrafts or bounced direct debits, the commission concluded that the absolute maximum, in this electronic age where everything is done automatically through a computer, is £2.50. However, the average charge is approximately £30. Some are as high as £38, and they are charged every time people make what the banks consider to be an unauthorised transaction. That is a substantial profit for the banks, which rake in some £4.5 billion, without even taking account of the similar examples that the Federation of Small Businesses found in business banking accounts.

Almost all of what is charged is profit, not costs. It is profit at the expense of hard-up customers. It is the biggest bank robbery in Britain, and it involves the banks robbing their own customers, especially their poorest ones. A common response when the practice is described is that there should be a law against it; but there is a law, or there are laws. First, under common law, disproportionate and punitive charges have always been illegal. In layman’s terms, if a consumer breaks the contract the other party—the bank, in this case—cannot impose a charge greater than the reasonable estimate of its loss. That common law has been unchanged for 100 years, and numerous cases in the higher courts have confirmed it. However, we can go further. The rights in question are protected by statutory instrument. The Unfair Terms in Consumer Contracts Regulations 1999 made that clear.

[eviltwin_sco]

Liberal Democrats - House of Commons (Westminster Hall) - Bank Penalty Charges

[eviltwin_sco]

oh you i had to go to the full house of commons debate which conclude in a less inspiring terms

Ed BallsMember of Parliament for the Normanton constituency

Ed Balls: As a result of the Cruickshank report, there is now a regular review of the banking code—the voluntary, good practice code for UK financial institutions, to which all the major banks signed up and which was first established in 1991.

Mike Young, a former senior Bank of England official, is conducting the triennial review of the banking code this year. As part of that, he has written to stakeholders to seek views on possible changes to the code. He has asked stakeholders to consider the following:

“Are the requirements about how lenders deal with people who get into financial difficulties clear enough?”

He is examining whether or not the banking code requirements, to which banks sign up voluntarily, are sufficiently clear and onerous to ensure proper protection for some of the people the hon. Gentleman mentioned.

Which resulted in Banking Code 2008

http://www.bba.org.uk/content/1/c6/01/30/85/Banking_Code_2008.pdf

[Conniff]

Now there's a man who certainly lives up to his name.

[noomill060]

Balls talks nothing but bollocks.