OFT may compromise on bank fees

[livelylad]

A look to the future: Its TESCO baby.

 

 

Seeing the writing on the wall you would think that most banks would like to take market share by stopping all charges on their accounts. However they will not do this. they will comply with the FSA regs on the issue to the letter.

 

However at some point customers will still be fed up of paying even £12. The problem is that when you're selling fresh air its difficult to retain customer satisfaction.

 

At some point someone (I reckon Tesco) will wade into the retail banking market and start mopping up all the customers who currently hate their bank. Their account will be good: with a clubcard, no overdraft fees AND it will pay interest. They will do well. Too well. The rest of the banks will mutter. Then they will try and follow suit. It wont work. By then we'll all be banking at TESCO.

 

The crux of the matter is that banks are currently sending customers away with an empty shopping bag that they are paying through the nose for. Tesco know that this does not fly. They would rather make lots of little bits of money from you. This will drive down margins and banks profits. Tesco will become Britains biggest bank. The bank execs will wonder at what point they went wrong.

 

Banks: You've seen the writing on the wall. Don't say you had no warning. This will be seen in the future as a crucial fork in the road.

 

 

Tesco uses RBS at the moment for CC etc.

[alecmac18]

Haha. The underlying brand never matters.

[bruce47]

Great idea plant the seed in there heads!!!!

 

 

 

A look to the future: Its TESCO baby.

 

 

Seeing the writing on the wall you would think that most banks would like to take market share by stopping all charges on their accounts. However they will not do this. they will comply with the FSA regs on the issue to the letter.

 

However at some point customers will still be fed up of paying even £12. The problem is that when you're selling fresh air its difficult to retain customer satisfaction.

 

At some point someone (I reckon Tesco) will wade into the retail banking market and start mopping up all the customers who currently hate their bank. Their account will be good: with a clubcard, no overdraft fees AND it will pay interest. They will do well. Too well. The rest of the banks will mutter. Then they will try and follow suit. It wont work. By then we'll all be banking at TESCO.

 

The crux of the matter is that banks are currently sending customers away with an empty shopping bag that they are paying through the nose for. Tesco know that this does not fly. They would rather make lots of little bits of money from you. This will drive down margins and banks profits. Tesco will become Britains biggest bank. The bank execs will wonder at what point they went wrong.

 

Banks: You've seen the writing on the wall. Don't say you had no warning. This will be seen in the future as a crucial fork in the road.

[alecmac18]

Haha - Tesco needs no seeds planting.........they've been eger to get on with this for a while....but this may be just the right time if they can get systems in place etc...........

[tifo]

2. Banks will have to offer customers a 'basic' bank account that has a solo or electron card and cannot go overdrawn under any circumstances.

 

Not true. I have a Solo card and i've still got charged, so 'under any circumstances' is not true.

 

There is NO bank account at the moment where you will not get charged for returned payments.

[alecmac18]

There will be at some point......and soon......bet on it.

[bruce47]

If the banks do agree lets say £12 per item as a charge and you can't claim this back then what reason would they have to withdraw from the test case and pay the claims now?

 

Surley they would prefer to wait until the test case has finnished which could be several years and then say right we set the limit at £12 as the test case is only for if the unfair terms and conditions apply not how much should be charged.

 

Wouldn't be suprised if the banks wait until the OFT publishes its findings in Dec 07 then the banks agree with what they say is a fair amount which is most prob going to be around £12 as with the CCards and then settle the claims, but i expect a lot of people would still go through the courts for the full amount as with CCards. But i guess a lot of people would just take the offer and the banks would save ££££££££'s

 

Or drag the test case on as long as poss then agree to charge £12

[alecmac18]

Ha Ha,

 

Thats the best bit.....they won't withdraw from the test case initially.......but they will offer to settle claims that are outstanding.....which means that if you have a case in court you will have to take the offer or wait until they formally drop the test case (which I reckon will be late 2008)8)8) This senario would solve a lot of problems.

 

Which is why.....if your case is in court......you will have to take the cash....or wait......

[alecmac18]

And it will be sooner than Dec 07.

[alecmac18]

Remember: Banks CANT drag this one out. There are too many negatives in doing so. Stratigically they have to move forward. Think what the consumer reaction will be in 3 months time? I can see demo's on the streets, outside branches etc etc........much better to just pay and get it over with.....all they need to agree on now is a figure.

 

Also: Say it does go to court. The banks would probably get a 'fair' ruling of £2-3 and I would want 5 years worth of interest @ 8% for waiting. The banks get off the hook cheaper this way.

 

And: Put it this way - how many people do you you think consider their banks a safe place to go for a mortagage at the moment. They are losing trust big time.

[lookinforinfo]

If there is not going to be a Court case, then what is to stop us going to Court and reclaiming all our charges since Judges are not hoodwinked by the banks over this "service" the banks are apparently providing.

The Courts will need proof that £12[if that is going to be the OFT target figure] is the actual cost to return a cheque etc and if they cannot do that then banks will still lose regardless of any directive from the OFT.

[cajdad]

If there is not going to be a Court case, then what is to stop us going to Court...............

 

The Courts will need proof that £12[if that is going to be the OFT target figure] is the actual cost to return a cheque etc.

 

 

If the test case doesn't go ahead we'll presumably be able to go ahead with our claims, as before. And the banks will then continue to pay up in full, as before (but maybe after some initial blustering), because they still won't allow these claims to be determined in court.

 

So, the courts won't need proof of the banks' costs, because the claims won't be heard in the courts.

[Gogivit]

I thought the above articles were very interesting.

 

Why don't we petition Tesco to open banking facilities!

 

Tesco is so big, the banks would become worried.

[tifo]

Tesco is so big, the banks would become worried.

 

Not big enough to be a serious bank on its own.

[alecmac18]

Are you kidding. Tesco is plenty big enough.

[tifo]

Are you kidding. Tesco is plenty big enough.

 

Yes, as a grocer, which is their main line of business.

 

In terms of the share of the business that does banking, it's tiny compared to the real banks.

[alecmac18]

There are only so many new stores you can open.......then what do you do?

 

Put it this way......if Tesco WERE thinking of going into the UK banking market.......then now would be a good time to go about it. Hey....they could even buy Northern Rock (which is undergoing a bank run at this very moment)

 

Northern Rock customers queue for cash as crisis hits high street - Telegraph

[Deso]

Tesco are in bed with the RBS group (which are huge when you look into what brands they deliver e.g. Churchills, Privilege, Direct Line,Lombard, Mint, One Account, Streamline, Worldpay etc).

They are actually considered to be the financial arm of TESCO (or would TESCO be the supermarket chain of RBS?)

[tifo]

If the banks won't do it themselves, they are probably not going to allow Tesco or other clients for whom they provide the banking back-end to do it.

 

Think about it, if Tesco, Asda etc were to suddenly offer free in-credit banking with low borrowing rates and £2.50 penalty charge, it will affect the banks like RBS themselves, from whom Tesco will take customers.

 

Are the big banks gonna allow their lucrative profits to be taken by the likes of Tesco?

[Deso]

No chance! As you say Tifo, they stand to lose too much, and I doubt if TESCO would "bite the hand that feeds it" so to speak. Without RBS there is no Tesco Personal Finance.

[alecmac18]

Well.....if Tesco put together their own back end systems then there would be no problem. But plenty of organisations would offer solutions. Do we not have the most competitive financial services market in the world? If RBOS wouldn't play ball....then someone would. If no one would then Tesco could build it themselves. Its not like they are short of the capital and the right access to skills and staff.

 

or they might just buy an bank....Northern Rock, A&L?

 

This is what their account should look like:

 

Free everyday account - no overdraft - no ability to go into one. If there is no money in your account - the direct debit or transaction bounces or is rejected - no charge.

 

1. Clubcard points on every purchase

 

2. Tiered interest on credit balance.

 

3. Pay money in (free) and withdraw ant Tesco and Post office and any cash machine.

 

4. Free withdrawals, deposits, transfers, foreign transactions, bill payments etc....a genuinely FREE account.

 

 

Called......The TESCO FREE account.

 

They could make their money on the cross selling, the fact that clubcard points would tie you to the Tesco brand, and the difference between deposit interest and invested amounts. Easy. Peasy.

[tifo]

Well.....if Tesco put together their own back end systems then there would be no problem.

 

It's not easy or as cheap ... as you think.

 

And Tesco are first and foremost a grocer of 'pile em high sell em low' products. That's what they're good at and it makes them very good money so why risk spending money on volatile financial markets?

 

They would never make themselves a bank, not in the UK anyway.

[tifo]

This is what their account should look like:

 

Free everyday account - no overdraft - no ability to go into one. If there is no money in your account - the direct debit or transaction bounces or is rejected - no charge.

 

1. Clubcard points on every purchase

 

2. Tiered interest on credit balance.

 

3. Pay money in (free) and withdraw ant Tesco and Post office and any cash machine.

 

4. Free withdrawals, deposits, transfers, foreign transactions, bill payments etc....a genuinely FREE account.

 

 

Called......The TESCO FREE account.

 

"Now available in your local store and post office. Just show your Tesco till receipt to the value of £50 or more to receive our FREE paying in and withdrawal facilities", much like you need to show to receive a discount on your Tesco petrol now.

 

Small print : "to qualify for our FREE account you must spend a minimum of £200 per month at Tesco. Monthly charges apply otherwise. Charges could apply at any time to any service at a rate specified by Tesco".

 

Now that's more like what it might look like ....

[alecmac18]

"Small print : "to qualify for our FREE account you must spend a minimum of £200 per month at Tesco. Monthly charges apply otherwise. Charges could apply at any time to any service at a rate specified by Tesco".

 

sigh.......yeah.......stilll........ahhhhhh sod this......I'm leaving the country..........I've had enough.

 

 

(and keeping all my money in gold bullion and cash)

[alecmac18]

In other news: I have it on good authority that the local County Couts are being bombarded with request for stays to be lifted and they are none too happy with doing all the work. They will now be putting pressure on the FSA to come up with a solution to allow claims to progress - this may be the straw that broke the camels back (so to speak) - in getting rid of teh FSA waiver.