More? You want more???
OFT backs down on Bank overdraft charges – says that further investigation into bank overdraft charges “would have a very limited scope and low prospects of success”.
The organisation whose slogan reads “Making markets work well for all consumers” has clearly decided that it is too much effort to ummm….make the markets work well for all consumers – see the BBC article here[1].
Having bailed the banks out and crippling our economy for years in the process, having failed to reign in the banks and their negligent pursuit of profit at all costs, having saddled the country with an eye-watering 59.2% of GDP [2] the government and it’s vassal departments have once again failed the people of the UK.
The banks, today
I know the arguments about “people should not go overdrawn” or “they know what they are getting into when they open an account” but, it is the NATURE of the charges, the way they are implemented and the (what amounts to) extortion involved in raking in money from those who plainly do not have it.
If you go overdrawn by even £1 then on average you will be charged £15 “administration” fee and for the most part, this fee is applied for every transaction that you then undertake in an unauthorised position. Fair enough but this amounts to a self-fulfilling, self-generating mechanism because the further overdrawn you go, the less likely or able you are to get out of it – ergo the banks begin to ensure further income and “ownership” of your income.
But that is not the biggest issue because up to that point it could be argued that it’s fair for the banks to charge you for an unauthorised position however, the fact that it costs the banks around £3 to “administer” the overdraft but, they charge you, the tax payer on average £15 means that on each unauthorised position they are raking in £12 for every letter.
Banks levy charges amounting to £2.6bn each year on their overdrawn customers and this makes up a third of their income from running current accounts.
Is THAT “making a market work well for all consumers”?
No.
This is yet another example of the state bowing down in servitude to banks who have no doubt threatened to leave the country or, to reduce their taxable positions as soon as they are able. When will we bite the bullet and stop allowing ourselves to ransom by banks who have so far failed to understand the level of chagrin and anger that people have against them?
Annoyed, u? Nahhhh!
After all, I did not have a say as to whether my tax monies should be used to rescue banks who have been wholly irresponsible and who know that now, they will not be allowed to fail no matter what they do.
Yes, the OFT was defeated in what was universally seen as a bizarre and somewhat suspect decision in the Law Courts but, the OFT should ride the wave of public anger and make another stand, they should look at other ways of engaging in what is a declaration of open warfare between the banks and the public.
The OFT should do what it says on the tin and MAKE markets work for all consumers, not just some or in this case none.
He [OFT Chief Executive, John Fingleton] threatened to ask the government to change the law if the banks did not co-operate, a stance supported by the Treasury.
This shows an interesting change of direction though….maybe we will see a legislative change. Now I am not a fan of using a legislative hammer to crack a nut but this might be a case worthy of such a step.
This mammal say that the state needs to “grow some” in relation to the banks, this mammal says that banks need to be humbled and if that means we lose some big players when they have paid us back and we end up going back to a semi-manufacturing based economy well, THAT would not be so bad.
Pax
References