Sunday, 5 October 2014

End of another financial scam?

Merryn Somerset Webb in her blog, cites another case of a bank being forced by the courts to give up an attempt to charge a customer several hundred pounds for running up an "unauthorised" overdraft and wonders why they still try it on like this. As she points out, the moment the bank honours the debit, they are authorising the overdraft. They could just say no. It's hard to resist the conclusion that it is just another scam to get customers to pay for "free" banking.

it would surely be better to refuse payments beyond an agreed limit, and instead send an instant text to the account holder saying something along the lines of “We have had a request for a payment that would take your overdraft beyond the agreed limit. If the payment is urgent please contact us immediately to discuss your options.” she points out, but the banks still appear to yearn for the time before the coming of the internet, when everything had to be sent in the post and cheques really did take almost a week to clear, instead of electronic payments having to be artificially held up. They still don't do e-mail, so it is unlikely that they would send you a text about an exceeded overdraft limit. Why should they, when they can keep stumm, fine you and then charge you interest on the fine?

The banks may want to live in the past, but, with luck, the present might just be catching up with them.


Lola said...

The banks as currently designed by regualtion are just one giant cartelised scam system. End of.

Rich Tee said...

The trouble is that any time that a bank executive suggests that people should pay for their banking they get hounded into submission.

Providing banking services like cash machines costs money and they have to get it from somewhere.

I don't personally have any problem with paying a £5 - £10 monthly admin fee on a current account if it stops this unauthorised overdraft business and stops cross-selling of other products.

But the rest of the British public apparently don't agree.

Mark Wadsworth said...


I messed up once, and I had £50 left in the bank with 3 direct debits going out, £60, £20 and £10.

The bank paid the £60 and charged me £25 penalty, paid the £20 and charged me another £25 and so on with the £10.

I pointed out to them that if they'd paid the £10 and the £20 first, there'd only be one penalty but they were having none of it.

So I shut down my account with that bank and opened one up elsewhere.

Bayard said...

Mark, Natwest did to my brother what his bank did to Mr Foster-Burnell. As a family, we were all lined up to remove our accounts from that branch of NatWest en masse, which would have meant that they would have lost more than ten accounts in one go, but they caved in before we had to.

Mark Wadsworth said...

B, well done you. Perhaps that's the way forward? Form little groups (or indeed larger groups) of "users of bank XYZ" and if Bank XYZ takes the piss out of one member, everybody else threatens to leave?