Bank Charges Consumer Charter

[steven4064]

Bank charges should be stayed.

The act of reclaiming bank charges has been put on hold while we await the high court decision. Considering the banks are estimated to have paid out over £500 million in penalty charge reclaiming so far this year; this tacit admittance of a problem means it is inappropriate to put a hold on those reclaiming, without putting a hold on the banks continuing to pay out.

Shouldn't this also incluse a request/demand that if there is a moratorium in claims there should also be a moratorium on charges? (ie £0 not £5 pendingthe outcome of the case)

 

Also, I have a business account with NatWest where I have to pay (preumably a fair price) for each transaction. They charge me 38p for paying a DD via BACS. It cannot cost them more than that NOT to pay it!

[steven4064]

Some comments from another thread:

So, is that it then, it's £5?

 

http://www.consumeractiongroup.co.uk/forum/announcement.php?f=&a=108

 

I think £5 is a hostage to fortune. It might be about right for bouncing a cheque which is done manually, but for DDs and SOs which are done automatically the figure should be a tenth of that.

 

The cost to the bank of a customer going overdrawn is zero because they charge interest at nearly 30%.

 

Clearly these letters and our defaults do have a cost, but it is still far short of £5 and it's also less than 50p.

 

Data processing is cheap, somewhere in the order of between 0.2 to 0.6 of a penny per record or between £2 and £6 per thousand records if done by an external company - and remember, these companies also make a profit on that too. The banks do it in-house and therefore enjoy cost savings there.

 

Then, if the bank send a letter (many do not) the paper and the envelope have a cost, as does the postage. Paper is around £3 per thousand sheets and white DL window envelopes are £11.49 per thousand from a well known stationery supplier, so it is doubtful the banks pay anything like this for their paper and envelopes.

 

So the total cost per letter? Approximately 1½ pence for the paper and envelope, 34 pence for postage and maybe ½ a penny to process the data. They are printed, folded and inserted by machine at a cost of a fraction of a penny each again, as the process is fully automated.

 

There simply are not armies of operators sitting hunched over terminals keying in data all day to manually pay or decline cheques or DD's. Only in a small minority of cases does a person actually do anything - the vast majority of bounced payments are completely automatic.

 

I think that if we are allowing a "mark-up", the we are agreeing with the bank that it is ok to flout the law on penalty charges, and open the door to a very dangerous way. Let's say the sum is set at £5... For how long? 6 months, 1 year? Then it will go up again, and again, and again, and before you know it, voila, we're back to paying £20, £30, and guess what? It has been agreed that it was ok to apply a mark-up on penalties!

 

Talk of signing a pact with the devil...

 

In most business a 10-15% markup is acceptable, in retainling it can be 100%. So my estimate of 38p becomes 76p - let's go with that

[steven4064]

Indeed how much must it cost them to send out all that junk mail with offers?

And I'm certainly not going to pay for that!

[steven4064]

• Five pounds is a fair maximum amount for bank charges. The banks have been charging £30 for bank charges, an amount that is totally disproportionate to their actual costs. Most generous estimates are that £2.50 is the appropriate cost, yet by allowing a five pound charge this gives banks the appropriate 100% mark up which is the typical reasonable markup f any other UK High Street business.I absolutely disagree with 5.00, as that would still be a penalty. Most banks don't send letters these days and according to CYNthesys the cost of the defaults is much less then 2.50.

I absolutely disgree too and even £2.50 is only reasonable if there is manual intervention, for example in handling a cheque. Automated transactions only cost pence.

[steven4064]

It still has the £5 in it!

[steven4064]

The £5 figure is there to prevent the OFT coming up with the ridiculous figure of £12 as it did with credit cards.

But if we had put 50p it would have stopped them coming up with a ridiculous figure like £5