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Personal ‘in-credit’ bank charges - I say no!

5/24/2012

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Andrew Bailey, the soon to be chief regulator of the financial services industry thinks that banks should levy personal customers banking charges for the normal operation of their accounts; http://www.bbc.co.uk/news/business-18186363

I have read his comments but think he has got it wrong. And if my bank believes him and acts on his advice, I’ll move my accounts without hesitation (and I have been my bank for 20 years).

For me the banking industry players need to continue placating customers for the appalling hash they helped make of our economy thanks to their extremely poor risk management practices. And any bank bailed out by the UK tax payer should be abandoned by its personal customers if it proposes to levy charges. The UK taxpayer has paid enough – just think about the Northern Rock losses alone. 

Introducing or increasing bank charges is just not going to improve the public perception of the banking community. If unjustified or over inflated bonuses generated so much negativity in the media or at shareholder meetings, just think what bank charges will inflame. 
 
Mr Bailey is courting controversy and making his name known in the process but I’d remind him about the fiasco and U-turns that occurred when some of our banking community felt it was acceptable to charge personal customers for taking their money out of cash points. 

My bank might not make a lot of money from the operation of my current account, although it will of course benefit in cashflow terms. The money that I save with the institution though gives it plenty of opportunity to generate revenue (by lending my deposits to others) whilst paying me a pittance in terms of interest.  

These days my bank has to do very little to maintain my custom.  I largely manage my affairs myself on-line, in fact I can’t remember the last time I picked up the phone or popped into a branch. I even cancelled the paper  statements and the cheque is becoming a tool of the past. The bank needs to provide me with systems and plastic to access my funds but then those are a prerequisite for any bank to be able to run at all. If I abuse the rules, I can expect to be charged and that is actually okay with me. 
 
How common is my situation and perspective?

In a speech, Andrew Bailey mentioned mis-selling, seeming to suggest that those dubious selling practices could be driven by banks needing to profit more from personal customers. Would levying increased personal bank charges have changed that? I doubt it very much, greed is greed!  

The banking community is being aggressively pursued for some £9 billion in compensation and do you know what I think? I think the industry is getting its comeuppance for acting immorally/dishonestly and it’s deserved! If the banks want to recoup those losses by charging for in-credit banking then they can **** *** – to put it ambiguously.  

A game of Hangman anyone?

I am struggling to think of another body that can make such a mess of their core activities, get bailed out when they get it wrong, continue to pay the bosses so highly and then think about charging customers more to make good their mistakes.

Well maybe politicians but that’s a rant for another day.

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