[Sussex] Bank charges, important court case

[Nic James Ferrier]

Andy Smith <andy at lug.org.uk> writes:

> They definitely are charging more than the costs and making a profit
> off it, of that it seems there can be little disagreement.  However,
> if the customer agrees to those conditions then whose fault is it?
> I don't see what is so bad about a penalty charge because if you get
> penalised then you really are less likely to do it in future.  It's
> a bit strange to me that the banking code should prohibit this --
> since it does it's also a bit odd that any bank dares to charge more
> than a few pounds these days!

There are well understood ways to work out profit. Agency costs are
considered to be reasonable between 5 and 25% depending on the
business. Depending on the shop a markup of 100% on the wholesale
good's price is accepted to be reasonable.

But the banks are charging 15 x what it costs them to handle
debtors. At the same time we can see that increasing debt is not
mitigated by them on the risk side, they actually seem to encourage
it.

And the money they are making does not seem to be passed on to
consumers in better services. Who would agree that banking has got
simpler in this country? Clearing times seem to go up with every new
level of computerization.

Is this reasonable? No it is not.

While I agree that bank consumers need to learn to manage their
finances better that does not mean that the banks have carte blanche
to profiteer.



The really strange thing about banking in this country is that, while
all the banks offer very homogenous business practices and while they
stand together over things like inflated bank charges, no cartel can
ever be found. It is as if they somehow manage to ALL be the same via
osmosis.

Perhaps that will be the next argument to the OFT: "Actually, it's
simply that we are so effective that we've eveolved osmosis based
decision making."

And I'm pretty sure the OFT will accept that (I used to work for the
OFT).

-- 
Nic Ferrier
http://www.tapsellferrier.co.uk