Bank robbery
January 25, 2007 12:22 PM Subscribe
How often can a customer walk into a bank and take a whole till full of cash, till and all? Well, that's what Declan Purcell did (okay, actually bailiffs acting on his behalf) after the Royal Bank of Scotland failed to comply with a court order to refund him 3400 pounds in bank fees.
It's like a license to rob banks!
posted by Astro Zombie at 12:24 PM on January 25, 2007
posted by Astro Zombie at 12:24 PM on January 25, 2007
You would need a lot of help, actually. 3,400 pounds is almost two tons.
posted by hal9k at 12:25 PM on January 25, 2007 [2 favorites]
posted by hal9k at 12:25 PM on January 25, 2007 [2 favorites]
I don't suppose that anyone knows if something similar has been tried in the US?
posted by Kattullus at 12:40 PM on January 25, 2007
posted by Kattullus at 12:40 PM on January 25, 2007
I am in the process of taking my bank to court for the same reason at the moment. Court date is February 20th.
(This man is my new hero)
posted by armoured-ant at 12:43 PM on January 25, 2007
(This man is my new hero)
posted by armoured-ant at 12:43 PM on January 25, 2007
he branch manager was told that the items would be sold unless RBS came up with the money owed to Mr Purcell. Only when the manager gave an undertaking that the debt would be paid did the bailiffs leave.
I am confused... so all that Mr Purcell got was yet another promise that the debt would be repaid? What good did this do?
posted by calhound at 12:45 PM on January 25, 2007
I am confused... so all that Mr Purcell got was yet another promise that the debt would be repaid? What good did this do?
posted by calhound at 12:45 PM on January 25, 2007
£28!? That's $55!
Our American banks are not taking full advantage of what could be a much larger profit center. As a concerned stockholder, I want to know why American bank customers go comparatively unraped in this respect.
posted by Methylviolet at 12:49 PM on January 25, 2007
Our American banks are not taking full advantage of what could be a much larger profit center. As a concerned stockholder, I want to know why American bank customers go comparatively unraped in this respect.
posted by Methylviolet at 12:49 PM on January 25, 2007
It was the first such promise he'd gotten--the bank had ignored everything else, even the court date.
posted by MrMoonPie at 12:49 PM on January 25, 2007
posted by MrMoonPie at 12:49 PM on January 25, 2007
Kattullus, I have a hard time imagining an American court signing out a warrant of execution (or whatever the American equivalent is) for a private person to take an action like this against like this against an FDIC member organization.
Which is actually too bad. Because this feel like Justice!
(And is it just me, or does this whole thing sound like it could have come from an early Guy Ritchie movie?)
posted by quin at 12:50 PM on January 25, 2007
Which is actually too bad. Because this feel like Justice!
(And is it just me, or does this whole thing sound like it could have come from an early Guy Ritchie movie?)
posted by quin at 12:50 PM on January 25, 2007
242.86 stone sterling. The man's worth more than his weight in silver!
posted by noble_rot at 12:54 PM on January 25, 2007
posted by noble_rot at 12:54 PM on January 25, 2007
calhound : "so all that Mr Purcell got was yet another promise that the debt would be repaid?"
No, not another promise, a first promise. The bank, from what I gather, had never indicated it had any intent whatsoever to pay him.
posted by Bugbread at 12:54 PM on January 25, 2007
No, not another promise, a first promise. The bank, from what I gather, had never indicated it had any intent whatsoever to pay him.
posted by Bugbread at 12:54 PM on January 25, 2007
I don't suppose that anyone knows if something similar has been tried in the US?
posted by Kattullus at 2:40 PM CST on January 25
I'm sure it has.
Well, let me qualify that: I can't say the exact factual scenario has occurred, but there is certainly plenty instances of people executing on judgments and going and collecting anything that satisfies the amount they are owed. That includes banks, although sophisticated entities tend to pay up before the sheriff comes knocking.
But there are plenty of instances of assets being seized in satisfaction of judgments, so I am sure there is an instance somewhere of a small town bank getting stuff seized.
posted by dios at 12:56 PM on January 25, 2007
posted by Kattullus at 2:40 PM CST on January 25
I'm sure it has.
Well, let me qualify that: I can't say the exact factual scenario has occurred, but there is certainly plenty instances of people executing on judgments and going and collecting anything that satisfies the amount they are owed. That includes banks, although sophisticated entities tend to pay up before the sheriff comes knocking.
But there are plenty of instances of assets being seized in satisfaction of judgments, so I am sure there is an instance somewhere of a small town bank getting stuff seized.
posted by dios at 12:56 PM on January 25, 2007
I really can't express in words how gleeful this makes me. He should have videotaped it.
posted by Skorgu at 1:09 PM on January 25, 2007
posted by Skorgu at 1:09 PM on January 25, 2007
"I don't suppose that anyone knows if something similar has been tried in the US?"
Well, not a bank but another business - a computer company.
Man sues Dell and wins, hires baliffs to seize property from offices in mall.
posted by Mutant at 1:11 PM on January 25, 2007
Well, not a bank but another business - a computer company.
Man sues Dell and wins, hires baliffs to seize property from offices in mall.
posted by Mutant at 1:11 PM on January 25, 2007
Yeah, ok, this was the first promise that Mr Purcell got, but the story says:
...on December 10 the court ruled in Mr Purcell's favour. It ordered RBS to pay the charges and £120 court costs.
So what I'm understanding is that Mr Purcell and the bailiffs are enforcing a judgement against the bank by the court. I guess I misunderstood the ability of third parties to enforce a judgement.
posted by calhound at 1:20 PM on January 25, 2007
...on December 10 the court ruled in Mr Purcell's favour. It ordered RBS to pay the charges and £120 court costs.
So what I'm understanding is that Mr Purcell and the bailiffs are enforcing a judgement against the bank by the court. I guess I misunderstood the ability of third parties to enforce a judgement.
posted by calhound at 1:20 PM on January 25, 2007
Yeah, my bank charged me $37, even though my checking account promised me no minimum balance requirement! LIARS! Apparently they mean no minimum POSITIVE balance requirement. jerks.
posted by Green Eyed Monster at 1:31 PM on January 25, 2007 [1 favorite]
posted by Green Eyed Monster at 1:31 PM on January 25, 2007 [1 favorite]
oh man, i live so close to that branch of RBS, wish i'd been there
posted by cardamine at 1:38 PM on January 25, 2007
posted by cardamine at 1:38 PM on January 25, 2007
I am in the process of taking my bank to court for the same reason at the moment. Court date is February 20th
armoured-ant, good luck. if you get to use the bailiffs, let me know
posted by cardamine at 1:41 PM on January 25, 2007
armoured-ant, good luck. if you get to use the bailiffs, let me know
posted by cardamine at 1:41 PM on January 25, 2007
This is a big movement in the UK at the moment. See here.
posted by srboisvert at 2:04 PM on January 25, 2007
posted by srboisvert at 2:04 PM on January 25, 2007
The man opened and maintained an account with the bank, knowing what their fee structure was, and judging by the total amount of the penalties (which, admittedly, are rather large on an individual basis), seems to have regularly gone into overdraft or to have bounced checks. (So, possibly he ended up causing some degree of harm to the merchants he did business with or costing them chargeback fees.) Now he wants a refund? Boo hoo.
posted by Midnight Creeper at 2:11 PM on January 25, 2007
posted by Midnight Creeper at 2:11 PM on January 25, 2007
Midnight Creeper : "The man opened and maintained an account with the bank, knowing what their fee structure was, and judging by the total amount of the penalties (which, admittedly, are rather large on an individual basis), seems to have regularly gone into overdraft or to have bounced checks. (So, possibly he ended up causing some degree of harm to the merchants he did business with or costing them chargeback fees.) Now he wants a refund? Boo hoo."
He's certainly not asking anyone to feel sorry for him. He is, instead, accepting either his money, or fax machines/registers/etc. in equivalent value, in exchange for fees which he claims are illegal, and which a cursory inspection of evidence indicates is a valid claim.
So, good for you, you can maintain the right not to feel sorry for him, so you're happy. And he will get his money, so he's happy. Everybody wins.
posted by Bugbread at 2:17 PM on January 25, 2007 [1 favorite]
He's certainly not asking anyone to feel sorry for him. He is, instead, accepting either his money, or fax machines/registers/etc. in equivalent value, in exchange for fees which he claims are illegal, and which a cursory inspection of evidence indicates is a valid claim.
So, good for you, you can maintain the right not to feel sorry for him, so you're happy. And he will get his money, so he's happy. Everybody wins.
posted by Bugbread at 2:17 PM on January 25, 2007 [1 favorite]
The man opened and maintained an account with the bank, knowing what their fee structure was
Likewise the bank is knowingly operating in a country with laws that render its agreement moot.
posted by srboisvert at 2:36 PM on January 25, 2007 [3 favorites]
Likewise the bank is knowingly operating in a country with laws that render its agreement moot.
posted by srboisvert at 2:36 PM on January 25, 2007 [3 favorites]
This is why I never bank at the Royal Bank of Scotland. The canny man puts his money into sheep, or the First Presbyterian Bank of Scotland (said with a thick accent).
posted by Mental Wimp at 2:49 PM on January 25, 2007
posted by Mental Wimp at 2:49 PM on January 25, 2007
"What's twenty quid to the bloody Midland Bank?"
posted by Mayor Curley at 3:00 PM on January 25, 2007 [1 favorite]
posted by Mayor Curley at 3:00 PM on January 25, 2007 [1 favorite]
Mental Wimp: I'm sure the average sheep could fit at least £50,000.
posted by Mercaptan at 3:35 PM on January 25, 2007
posted by Mercaptan at 3:35 PM on January 25, 2007
I love this part:
"A spokesman for RBS said: "We are looking into this as a matter of urgency, but early indications suggest that unfortunately due to an administrative error, the bank failed to defend the claim leading to a default judgment being obtained on the branch and a resulting warrant."
They think the problem is that they don't show up in court. They conveniently ignore the bigger problem, which is that they're being sued for obscene, usurous bank charges that necessitate them going to court in the first place.
posted by Civil_Disobedient at 3:57 PM on January 25, 2007
"A spokesman for RBS said: "We are looking into this as a matter of urgency, but early indications suggest that unfortunately due to an administrative error, the bank failed to defend the claim leading to a default judgment being obtained on the branch and a resulting warrant."
They think the problem is that they don't show up in court. They conveniently ignore the bigger problem, which is that they're being sued for obscene, usurous bank charges that necessitate them going to court in the first place.
posted by Civil_Disobedient at 3:57 PM on January 25, 2007
I knew this person who deposited a check, and it took 2 weeks to clear. So they started writing checks thinking the money was deposited. In the end, the bank bounced each check 3 times, charging 3 overdraft fees. When the total was over 2,000 dollars, she was promptly arrested and severed 4 months in jail waiting on her court date for check fraud.
She was found guilty and released on time served, even though she didn't have intent to commit fraud, very bad situation.
posted by IronWolve at 4:11 PM on January 25, 2007
She was found guilty and released on time served, even though she didn't have intent to commit fraud, very bad situation.
posted by IronWolve at 4:11 PM on January 25, 2007
After being charged £20 for a £10 overdraft, 30 year old Michael Howard of Leeds changed his name by deed poll to Yorkshire Bank PLC Are Fascist Bastards. The bank has now asked him to close his account, and Mr. Bastards has asked them to repay the 69p balance, by cheque, made out in his new name. (The Guardian) via
posted by patricio at 4:48 PM on January 25, 2007 [2 favorites]
posted by patricio at 4:48 PM on January 25, 2007 [2 favorites]
civil_disobedient & srboivert: the court made no judgment on the merits of the case at all. RBS failed to appear at any hearing (due, they say, to an admin error - and being familiar with bank legal departments that's entirely plausible) to defend themselves so the court entered judgment in default.
That said, I think the OFT will rule against the banks but that unfortunately the result will be free banking for those in credit will disappear. The system was sustainable as long as the majority of people didn't suffer the charges and those who "misused" their accounts subsidised those who didn't. The situation is now reversed, with debtors in the ascendancy, so the subsidy will be reversed too.
The hypocrisy of the Daily Mail having a "Fair Play on Charges campaign" makes me want to vomit
posted by patricio at 4:59 PM on January 25, 2007 [1 favorite]
That said, I think the OFT will rule against the banks but that unfortunately the result will be free banking for those in credit will disappear. The system was sustainable as long as the majority of people didn't suffer the charges and those who "misused" their accounts subsidised those who didn't. The situation is now reversed, with debtors in the ascendancy, so the subsidy will be reversed too.
The hypocrisy of the Daily Mail having a "Fair Play on Charges campaign" makes me want to vomit
posted by patricio at 4:59 PM on January 25, 2007 [1 favorite]
If I were RBS, I'd pay all court-ordered refunds in fax machines.
posted by mullacc at 5:03 PM on January 25, 2007
posted by mullacc at 5:03 PM on January 25, 2007
I am confused... so all that Mr Purcell got was yet another promise that the debt would be repaid? What good did this do?
Well there's now worldwide negative publicity...
posted by Zinger at 5:25 PM on January 25, 2007
Well there's now worldwide negative publicity...
posted by Zinger at 5:25 PM on January 25, 2007
As I read this story iTunes played "If You Want Blood (You've Got It)" by AC/DC.
Awesome.
posted by basicchannel at 5:31 PM on January 25, 2007
Awesome.
posted by basicchannel at 5:31 PM on January 25, 2007
Awesome story! Great post! Right on Declan Purcell, what wonderful cojones he had to seek and receive justice in such a smart way. Good for him! Woo hoo!!!
posted by nickyskye at 8:34 PM on January 25, 2007
posted by nickyskye at 8:34 PM on January 25, 2007
I think I just came in my pants. Debt porn, oooooohh yeah.
posted by lalochezia at 9:20 PM on January 25, 2007
posted by lalochezia at 9:20 PM on January 25, 2007
This is a big movement in the UK at the moment.
Banks aren't legally required to be bastards, are they? So why don't some banks charge low fees, advertise it well, and steal all the customers who are part of this big movement? Or if it's not economically possible to charge low fees, maybe the banks aren't crooks after all.
posted by pracowity at 1:17 AM on January 26, 2007
Banks aren't legally required to be bastards, are they? So why don't some banks charge low fees, advertise it well, and steal all the customers who are part of this big movement? Or if it's not economically possible to charge low fees, maybe the banks aren't crooks after all.
posted by pracowity at 1:17 AM on January 26, 2007
They're not required to be bastards but the big 5 UK banks made made £32 billion in profit last year so they're not going to start dicking around with the system now just to have bit of competition.
posted by biffa at 2:25 AM on January 26, 2007
posted by biffa at 2:25 AM on January 26, 2007
luriete: "foot: two very, very large stones."
No no, a foot is twelve inches. Two very large stones would weigh twenty-eight pounds.
posted by PeterMcDermott at 2:27 AM on January 26, 2007
No no, a foot is twelve inches. Two very large stones would weigh twenty-eight pounds.
posted by PeterMcDermott at 2:27 AM on January 26, 2007
they're not going to start dicking around with the system now just to have bit of competition.
Maybe not, but if a public figure in this big movement tells everyone to switch to bank X, that bank will do quite well. Are there any such recommendations being made?
posted by pracowity at 3:07 AM on January 26, 2007
Maybe not, but if a public figure in this big movement tells everyone to switch to bank X, that bank will do quite well. Are there any such recommendations being made?
posted by pracowity at 3:07 AM on January 26, 2007
Banks aren't legally required to be bastards, are they? So why don't some banks charge low fees, advertise it well, and steal all the customers who are part of this big movement? Or if it's not economically possible to charge low fees, maybe the banks aren't crooks after all.
This is already the case in the credit card world. Look at all the balance transfer deals. The thing with bank accounts is that they are like home insurance - you sign up and forget about it so the businesses don't really compete. Plus nobody really pays attention to fees because you just assume you won't have to pay them. How many people sign up for something and think "yeah, I am a disorganized shithead so I better shop around for the best deal on overdraft fees."? The banks compete on other more salient factors like interest rates, service and extras. They don't compete in the fine print of a user agreement.
Plus banking as a highly regulated industry with huge barriers to entry which tends to produce oligopolies that informally collude to have high fees. An clear example is bank machine fees. In Canada the fees are pretty much universal. You use a machine from another bank you pay a fee. This is presented as a cost of maintaining a bank machine network. Yet here in England the use of bank machines, regardless of which bank, is usually free. Why the difference?
posted by srboisvert at 3:46 AM on January 26, 2007
This is already the case in the credit card world. Look at all the balance transfer deals. The thing with bank accounts is that they are like home insurance - you sign up and forget about it so the businesses don't really compete. Plus nobody really pays attention to fees because you just assume you won't have to pay them. How many people sign up for something and think "yeah, I am a disorganized shithead so I better shop around for the best deal on overdraft fees."? The banks compete on other more salient factors like interest rates, service and extras. They don't compete in the fine print of a user agreement.
Plus banking as a highly regulated industry with huge barriers to entry which tends to produce oligopolies that informally collude to have high fees. An clear example is bank machine fees. In Canada the fees are pretty much universal. You use a machine from another bank you pay a fee. This is presented as a cost of maintaining a bank machine network. Yet here in England the use of bank machines, regardless of which bank, is usually free. Why the difference?
posted by srboisvert at 3:46 AM on January 26, 2007
pracowity : "Maybe not, but if a public figure in this big movement tells everyone to switch to bank X, that bank will do quite well."
You see this kind of lack of competition in Japan all the time, and, financially, it makes sense, though it may be illegal and/or immoral, I dunno.
Let's say, for example, that there are 5 banks. There are a total of 5 customers. Each bank has one customer. Each bank charges 100 Grobits (a fake unit of currency for simplicity's sake). Each bank thus makes 100 Grobits.
Now, let's say Bank Number One changes their fees to 50 Grobits. Immediately, the other 4 customers will all switch to Bank Number One. Now Bank Number One is making (50 Grobits per customer x 5 customers) 250 Grobits. That's great for Bank Number One.
But now The Second Bank of Brittania, The Tertiary Bank of Anglia, BankFour, and QuintiBank all drop their fees to 40 Grobits, because 40 is better than their current new income of 0. Now the customers all start switching around.
After a while, things stabilize at a fair market price of, say, 20 Grobits. That's enough for the banks to survive, and it's the best deal for customers. Each bank now has 1 customer, and, charging 20 Grobits, each bank is now making 20 Grobits.
So, by taking the first step in dropping prices, Bank Number One has gone from having a steady income of 100 Grobits, to having a short spike of very high (250 Grobit) income, but ending with a steady income of 20 Grobits. They have, in short, cut their earnings significantly.
If the banks discuss this, it's called "collusion", and is illegal. If they don't, but they just reason it out, well, IANAL, and I don't know if it's still collusion or not, and if it's still illegal. So, legally speaking, I dunno if what they're doing is kosher or illegal. But motive-wise, to the question "why don't they?", the answer is "because doing so would result in a decrease in income".
posted by Bugbread at 4:18 AM on January 26, 2007
You see this kind of lack of competition in Japan all the time, and, financially, it makes sense, though it may be illegal and/or immoral, I dunno.
Let's say, for example, that there are 5 banks. There are a total of 5 customers. Each bank has one customer. Each bank charges 100 Grobits (a fake unit of currency for simplicity's sake). Each bank thus makes 100 Grobits.
Now, let's say Bank Number One changes their fees to 50 Grobits. Immediately, the other 4 customers will all switch to Bank Number One. Now Bank Number One is making (50 Grobits per customer x 5 customers) 250 Grobits. That's great for Bank Number One.
But now The Second Bank of Brittania, The Tertiary Bank of Anglia, BankFour, and QuintiBank all drop their fees to 40 Grobits, because 40 is better than their current new income of 0. Now the customers all start switching around.
After a while, things stabilize at a fair market price of, say, 20 Grobits. That's enough for the banks to survive, and it's the best deal for customers. Each bank now has 1 customer, and, charging 20 Grobits, each bank is now making 20 Grobits.
So, by taking the first step in dropping prices, Bank Number One has gone from having a steady income of 100 Grobits, to having a short spike of very high (250 Grobit) income, but ending with a steady income of 20 Grobits. They have, in short, cut their earnings significantly.
If the banks discuss this, it's called "collusion", and is illegal. If they don't, but they just reason it out, well, IANAL, and I don't know if it's still collusion or not, and if it's still illegal. So, legally speaking, I dunno if what they're doing is kosher or illegal. But motive-wise, to the question "why don't they?", the answer is "because doing so would result in a decrease in income".
posted by Bugbread at 4:18 AM on January 26, 2007
> I am confused... so all that Mr Purcell got was yet another promise that the debt would be repaid? What good did this do?
This is standard practice for bailiff recovery actions in England. The bailiff, acting as a court officer, legally takes posession of the goods (computers, till-full-of-cash etc). They no longer belong to the bank.
The bailiff can remove the goods immediately, but the often chose to use a "walk-in posession order." This means that the debtor signs an undertaking to pay the debt, and in return, they bailiff will not remove the goods and the debtor may continue to use them - but still, they don't own them any more.
If the terms of the agreement are met - the debt is paid as promised - the goods return to the debtor's ownership and it's all over. If not, the bailiff can return at any time, with or without permission from the debtor, and physically remove the goods for sale. Of course, the debtor now owes even more because there is a charge associated with the walk-in possession agreement, and a penalty for not sticking to it.
(pleasantly ironic for a bank to be in that situation, huh?)
This is often used in cases where the bailiff thinks the debtor can probably pay the debt, but just needs a bit of a scare to encourage them. There is a strong incentive for the debtor to pay rather than have goods removed, because to pay a £1000 debt you might need to sell £5000 worth of goods at auction.
posted by thparkth at 5:36 AM on January 26, 2007
This is standard practice for bailiff recovery actions in England. The bailiff, acting as a court officer, legally takes posession of the goods (computers, till-full-of-cash etc). They no longer belong to the bank.
The bailiff can remove the goods immediately, but the often chose to use a "walk-in posession order." This means that the debtor signs an undertaking to pay the debt, and in return, they bailiff will not remove the goods and the debtor may continue to use them - but still, they don't own them any more.
If the terms of the agreement are met - the debt is paid as promised - the goods return to the debtor's ownership and it's all over. If not, the bailiff can return at any time, with or without permission from the debtor, and physically remove the goods for sale. Of course, the debtor now owes even more because there is a charge associated with the walk-in possession agreement, and a penalty for not sticking to it.
(pleasantly ironic for a bank to be in that situation, huh?)
This is often used in cases where the bailiff thinks the debtor can probably pay the debt, but just needs a bit of a scare to encourage them. There is a strong incentive for the debtor to pay rather than have goods removed, because to pay a £1000 debt you might need to sell £5000 worth of goods at auction.
posted by thparkth at 5:36 AM on January 26, 2007
This comment on the linked article really pissed me off:
As a former bank worker I'm constantly stunned by how customers can constantly misuse bank accounts and exploit overdrafts that aren't even theirs. Once the bank acts like a business and charges for their services the account holder cries foul and runs to the ombudsman or their solicitor.
Better financial management would mean they wouldn't be charged in the first place!
Yeah, well -- what do you do when your moron bank deposits a sizeable book advance check into the wrong account, causing your checks and debits to hit your overdraft? And then the bank says "It's not our fault!", to which you reply "Well, I sure as hell didn't get behind the counter and deposit it into the wrong account, did I?"
(I fought that particular piece of stupidity right up to the district manager and got all the fees they layered on me reversed).
Or, in Other Bank Stupidity News: check this out. A supremely popular online yarn company's bank decided that their sock yarn club must be a front for something nefarious, as no one could possibly want to order that much yarn (to the tune of many, many, many thousands of dollars). So they cancelled their credit card processing and forcibly refunded money to all their customers without asking if, say, they wanted to be refunded.
posted by bitter-girl.com at 6:01 AM on January 26, 2007
As a former bank worker I'm constantly stunned by how customers can constantly misuse bank accounts and exploit overdrafts that aren't even theirs. Once the bank acts like a business and charges for their services the account holder cries foul and runs to the ombudsman or their solicitor.
Better financial management would mean they wouldn't be charged in the first place!
Yeah, well -- what do you do when your moron bank deposits a sizeable book advance check into the wrong account, causing your checks and debits to hit your overdraft? And then the bank says "It's not our fault!", to which you reply "Well, I sure as hell didn't get behind the counter and deposit it into the wrong account, did I?"
(I fought that particular piece of stupidity right up to the district manager and got all the fees they layered on me reversed).
Or, in Other Bank Stupidity News: check this out. A supremely popular online yarn company's bank decided that their sock yarn club must be a front for something nefarious, as no one could possibly want to order that much yarn (to the tune of many, many, many thousands of dollars). So they cancelled their credit card processing and forcibly refunded money to all their customers without asking if, say, they wanted to be refunded.
posted by bitter-girl.com at 6:01 AM on January 26, 2007
Maybe not, but if a public figure in this big movement tells everyone to switch to bank X, that bank will do quite well. Are there any such recommendations being made?
I'm not convinced there is that big a movement.
Bugbread explains the main barrier to competition, but I'd also add that people are very conservative about changing banks, is that just in the UK? Bank customers don't change banks often here and aren't easily persuaded to change.
posted by biffa at 6:28 AM on January 26, 2007
I'm not convinced there is that big a movement.
Bugbread explains the main barrier to competition, but I'd also add that people are very conservative about changing banks, is that just in the UK? Bank customers don't change banks often here and aren't easily persuaded to change.
posted by biffa at 6:28 AM on January 26, 2007
That said, I think the OFT will rule against the banks but that unfortunately the result will be free banking for those in credit will disappear. The system was sustainable as long as the majority of people didn't suffer the charges and those who "misused" their accounts subsidised those who didn't. The situation is now reversed, with debtors in the ascendancy, so the subsidy will be reversed too.
Bears repeating. Charges for using your account normally will come into play. That means, charges for any bank transaction (deposit or withdrawal), charges for using a branch, charges for using a cash machine. In fact the only things you are not likely to be charged for is buying things with a debit card and direct debits. You might find an account that has monthly allowances for using the account as long as your balance stays above a certain level. Banks will screw you any which way they can.
posted by asok at 8:59 AM on January 26, 2007
Bears repeating. Charges for using your account normally will come into play. That means, charges for any bank transaction (deposit or withdrawal), charges for using a branch, charges for using a cash machine. In fact the only things you are not likely to be charged for is buying things with a debit card and direct debits. You might find an account that has monthly allowances for using the account as long as your balance stays above a certain level. Banks will screw you any which way they can.
posted by asok at 8:59 AM on January 26, 2007
I've never liked banks, disliked going to them for any reason all my adult life, felt scared of the staff.
But since this is on the topic of banks, I'd like to take the opportunity to plug Commerce Bank in NYC and the East Coast for anyone living in this area. Somehow it got the idea of being a friendly and less expensive bank than the others: open 7 days a week from 7/8 am to 8 at night; free checking account with $100 minimum balance in an account, free Visa check card, no per item transaction charges, minimum paperwork, minimum fuss about anything, friendly staff, coin changing machines, free pens, no glass shield at the counters, greeters at the front door to direct one's business. Somehow they got the idea to be nice to people who put money in their banks.
posted by nickyskye at 9:04 AM on January 26, 2007
But since this is on the topic of banks, I'd like to take the opportunity to plug Commerce Bank in NYC and the East Coast for anyone living in this area. Somehow it got the idea of being a friendly and less expensive bank than the others: open 7 days a week from 7/8 am to 8 at night; free checking account with $100 minimum balance in an account, free Visa check card, no per item transaction charges, minimum paperwork, minimum fuss about anything, friendly staff, coin changing machines, free pens, no glass shield at the counters, greeters at the front door to direct one's business. Somehow they got the idea to be nice to people who put money in their banks.
posted by nickyskye at 9:04 AM on January 26, 2007
Seconding nickyskye's recommendation of Commerce Bank.
I was with them for a number of years while I was living in Philly, and their service was thoroughly excellent. They had an insanely friendly staff that always seemed to be happy to help. And being able to go to the bank on a Sunday rocked!
posted by Mercaptan at 9:41 AM on January 26, 2007
I was with them for a number of years while I was living in Philly, and their service was thoroughly excellent. They had an insanely friendly staff that always seemed to be happy to help. And being able to go to the bank on a Sunday rocked!
posted by Mercaptan at 9:41 AM on January 26, 2007
Personally, I miss the bank I had in Boston: Wainwright Bank & Trust. How's this for an 'about us' page?
The civil rights movement of the 60's has certainly influenced the creation of Wainwright's progressive social agenda. That movement has evolved into a coalition of "rights" issues. Homelessness, affordable housing, HIV/AIDS rights, immigration, environmental justice, economic equality and gay/lesbian/bisexual/transgender equality are all children of the civil rights movement. Through our lending practices, philanthropy, and leadership in addressing many of these areas, we have become a catalyst for social change.
And they're not just saying it, they mean it. When I move back to the Boston region, they're going to be my bank again. Oh yes.
posted by bitter-girl.com at 10:12 AM on January 26, 2007
The civil rights movement of the 60's has certainly influenced the creation of Wainwright's progressive social agenda. That movement has evolved into a coalition of "rights" issues. Homelessness, affordable housing, HIV/AIDS rights, immigration, environmental justice, economic equality and gay/lesbian/bisexual/transgender equality are all children of the civil rights movement. Through our lending practices, philanthropy, and leadership in addressing many of these areas, we have become a catalyst for social change.
And they're not just saying it, they mean it. When I move back to the Boston region, they're going to be my bank again. Oh yes.
posted by bitter-girl.com at 10:12 AM on January 26, 2007
One of the problems with cheap banking is the only places with the capital to do it seem to be supermarkets. And they intall their branches in cube farms at the front of the stores. Which is great if one is wanting to deposit your paycheque but the lack of privacy blows if you want to arrange for a mortgage or loan.
srboisvert writes "In Canada the fees are pretty much universal. You use a machine from another bank you pay a fee. This is presented as a cost of maintaining a bank machine network. Yet here in England the use of bank machines, regardless of which bank, is usually free. Why the difference?"
There is some press about someone in the goverment wanting to make this practice illegal.
posted by Mitheral at 12:10 PM on January 26, 2007
srboisvert writes "In Canada the fees are pretty much universal. You use a machine from another bank you pay a fee. This is presented as a cost of maintaining a bank machine network. Yet here in England the use of bank machines, regardless of which bank, is usually free. Why the difference?"
There is some press about someone in the goverment wanting to make this practice illegal.
posted by Mitheral at 12:10 PM on January 26, 2007
That said, I think the OFT will rule against the banks but that unfortunately the result will be free banking for those in credit will disappear.[...]
Sorry, I don't really understand this logic at all. Even free accounts are profitable for banks (actually if they weren't I don't think banks would offer them in the first place). And no one is suggesting that all bank fees go away, only that they be made more reasonable, at least as far as I understand it.
posted by timelord at 1:08 PM on January 26, 2007
Sorry, I don't really understand this logic at all. Even free accounts are profitable for banks (actually if they weren't I don't think banks would offer them in the first place). And no one is suggesting that all bank fees go away, only that they be made more reasonable, at least as far as I understand it.
posted by timelord at 1:08 PM on January 26, 2007
timelord : "Sorry, I don't really understand this logic at all."
The argument, I think, is that free banking for people who stay in credit is very mildly unprofitable, and the fees charged to those in arrears are what make the bank profitable. However, you can't limit your banking to only accounts for people who overdraw. You wouldn't get many takers for an account at the Terminal Loser Bank of Albion, especially if they weren't offering any better deals than the standard bank down the lane.
So, the free accounts are loss leaders. They're like PlayStation3s or X-Boxes. Each free account actually loses the bank money (much like every PlayStation3 sale or XBox sale loses their respective manufacturers money), but are essential to get the profitable segment, which are the people paying all the fees (in the PS3/XBox example, these would be "the games").
If you're a bank, with 10 users, you can charge each one of them a 10 Grobit banking fee, or you can charge 9 of them nothing, and charge the one guy who is always late/deficient a 100 Grobit penalty. If your case is the latter, you can't just axe the 9 free accounts, because if you do so, person 10 will also leave. But if you make the account fees for person 10 more reasonable, you're going to have to increase fees elsewhere to maintain that 100 Grobit total.
I don't know if that's accurate, but I believe it's the logic behind it.
posted by Bugbread at 1:45 PM on January 26, 2007
The argument, I think, is that free banking for people who stay in credit is very mildly unprofitable, and the fees charged to those in arrears are what make the bank profitable. However, you can't limit your banking to only accounts for people who overdraw. You wouldn't get many takers for an account at the Terminal Loser Bank of Albion, especially if they weren't offering any better deals than the standard bank down the lane.
So, the free accounts are loss leaders. They're like PlayStation3s or X-Boxes. Each free account actually loses the bank money (much like every PlayStation3 sale or XBox sale loses their respective manufacturers money), but are essential to get the profitable segment, which are the people paying all the fees (in the PS3/XBox example, these would be "the games").
If you're a bank, with 10 users, you can charge each one of them a 10 Grobit banking fee, or you can charge 9 of them nothing, and charge the one guy who is always late/deficient a 100 Grobit penalty. If your case is the latter, you can't just axe the 9 free accounts, because if you do so, person 10 will also leave. But if you make the account fees for person 10 more reasonable, you're going to have to increase fees elsewhere to maintain that 100 Grobit total.
I don't know if that's accurate, but I believe it's the logic behind it.
posted by Bugbread at 1:45 PM on January 26, 2007
True, I was probably being a little too flippant about the whole logic part of the argument. But generally I don't think that fees make up the bulk of a bank profits, rather they're more like icing on the cake. Of course this helps make a bank even more profitable...which is, of course, a desirable for the bank.
And by fees I'm referring to simple, one-time charges, such as atm fees, overdraft fees, etc. Not that I'm personally advocating that they be abolished really, annoying as they are...but there certainly is some talk that fees are increasingly unfair.
posted by timelord at 2:03 PM on January 26, 2007
And by fees I'm referring to simple, one-time charges, such as atm fees, overdraft fees, etc. Not that I'm personally advocating that they be abolished really, annoying as they are...but there certainly is some talk that fees are increasingly unfair.
posted by timelord at 2:03 PM on January 26, 2007
Timelord, keep in mind that we're talking about a UK bank, where, from what I gather, there are no ATM fees. Basically, from what I can tell, as long as you don't bounce checks/overdraw/do generally bad stuff, there is no fee. In Canada, on the other hand, from what I gather, overdraft fees are lower, but there are ATM fees, bank transfer deposit fees, etc. I think the argument is that, if the UK drops the fees for bad account holders, it's going to have to institute fees for good account holders, like Canada.
posted by Bugbread at 2:12 PM on January 26, 2007
posted by Bugbread at 2:12 PM on January 26, 2007
(And I certainly don't mean to come across as defending the bank fee structures. I suppose in the end analysis, they probably are unfairly shifting the fee burden onto penalties, but if you make the penalty burden fair, for better or for worse, you're probably going to shift that burden onto non-penalty transaction fees)
posted by Bugbread at 2:15 PM on January 26, 2007
posted by Bugbread at 2:15 PM on January 26, 2007
Just change Grobits to Grabits and your example is more clear.
You are arguing as if the banks were walking the razor's edge of unprofitability and any margin lost must be made up elsewhere. Their 2005 profits were around £8.2bn. It's a Global Fortune 500 company ranked quite high in the banking sector. Their only constraint is what they think they can get away with. Apparently, a 600% markup is within that range.
posted by srboisvert at 2:22 PM on January 26, 2007
You are arguing as if the banks were walking the razor's edge of unprofitability and any margin lost must be made up elsewhere. Their 2005 profits were around £8.2bn. It's a Global Fortune 500 company ranked quite high in the banking sector. Their only constraint is what they think they can get away with. Apparently, a 600% markup is within that range.
posted by srboisvert at 2:22 PM on January 26, 2007
No, I'm arguing that, if the bank is to maintain current profitability, then moving the fee burden is what would happen. And, realistically, banks want to retain their profitability, so that's probably what will happen. If you want to argue "no, that isn't what will happen, because banks are fabulously profitable", I'd counter "and what on earth makes you think that they'd just give up that profitability voluntarily?" If you believe banks are so charitable and generous, then how do you think they got to charging illegally large fees in the first place?
posted by Bugbread at 2:52 PM on January 26, 2007
posted by Bugbread at 2:52 PM on January 26, 2007
Good points all around. I suppose I brought up ATM fees only as an example, but yes I'm aware that UK banks don't charge for ATM use (at least domestically). Of course now we're talking about how much profitability is reasonable, and frankly I don't have much of an answer to that question.
On a somewhat unrelated side note, a lot of UK banks will offer students a free overdraft line, which many will max out w/out much thought. Of course it's only later when they have to pay it off, that they realize how much of a burden it can be (then again...it's not so different from playing the credit card game).
posted by timelord at 3:24 PM on January 26, 2007
On a somewhat unrelated side note, a lot of UK banks will offer students a free overdraft line, which many will max out w/out much thought. Of course it's only later when they have to pay it off, that they realize how much of a burden it can be (then again...it's not so different from playing the credit card game).
posted by timelord at 3:24 PM on January 26, 2007
re: profitability to the banks of in-credit accounts... I was always under the impression that the profit the bank makes from having me as a personal banking customer was meant to be in the interest the are able to make on lending my money to their credit clients... while I can understand them charging me for things I ask them to do (depositing a cheque or whatever) that's not where they should be looking for profitability... if they want more profit from re-lending my money they should be lowering the interest rate I'm paid, or increasing the interest rate of their credit lines...
posted by russm at 11:54 PM on January 26, 2007
posted by russm at 11:54 PM on January 26, 2007
Bugbread is right - sorry for not being clearer. It's all about maintaining existing profitability.
Another example of this sort of behaviour is the evolution of the credit card market in the UK. For many years card issuers offered long 0% interest periods (12 - 18 months) on purchases and also on existing balances transfered from other cards. The thinking was that users would end up spending loads of cash, keep balances beyond the 0% period and then pay a big whack of interest.
However, the ability to transfer balances meant that you could max out one card and then at the end of the 0% interest period simply transfer the balance to a brand new one and not pay interest ever. This concept started getting publicity in finance guides in newspapers and on the internet and "rate tarting" became standard practice. Pretty quickly though the banks felt the pain (Barclaycard profits fell nearly 20% in 2005) and now they've introduced fees on balance transfers and other hurdles. Most have abandoned the 0% offers or have shortened them to a month or three.
The moral (of that rambling story) is that banks will act surprisingly quickly to protect their profitability. If one source of fees dries up don't think they won't (try to) impose new ones on some other service.
posted by patricio at 6:47 AM on January 27, 2007
Another example of this sort of behaviour is the evolution of the credit card market in the UK. For many years card issuers offered long 0% interest periods (12 - 18 months) on purchases and also on existing balances transfered from other cards. The thinking was that users would end up spending loads of cash, keep balances beyond the 0% period and then pay a big whack of interest.
However, the ability to transfer balances meant that you could max out one card and then at the end of the 0% interest period simply transfer the balance to a brand new one and not pay interest ever. This concept started getting publicity in finance guides in newspapers and on the internet and "rate tarting" became standard practice. Pretty quickly though the banks felt the pain (Barclaycard profits fell nearly 20% in 2005) and now they've introduced fees on balance transfers and other hurdles. Most have abandoned the 0% offers or have shortened them to a month or three.
The moral (of that rambling story) is that banks will act surprisingly quickly to protect their profitability. If one source of fees dries up don't think they won't (try to) impose new ones on some other service.
posted by patricio at 6:47 AM on January 27, 2007
Banks aren't legally required to be bastards, are they?
Yes they are. They have a legal duty to maximise profits, and in banking terms that means squeezing everybody dry.
Another good reason they won't advertise lower penalty charges is because a) who wants to advertise for deadbeat customers and b) you can be quietly illegal, but don't go advertising it -- penalty charges above the actual costs incurred are illegal.
posted by bonaldi at 7:46 AM on January 27, 2007
Yes they are. They have a legal duty to maximise profits, and in banking terms that means squeezing everybody dry.
Another good reason they won't advertise lower penalty charges is because a) who wants to advertise for deadbeat customers and b) you can be quietly illegal, but don't go advertising it -- penalty charges above the actual costs incurred are illegal.
posted by bonaldi at 7:46 AM on January 27, 2007
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posted by louigi at 12:23 PM on January 25, 2007