Banks

[jrtv]

Why do banks charge a fee on " insuffient funds " when they know there is not enough ?

[stevie21]

Because they can. Because they're a business, not a charity and they exist to generate profits for their shareholders.
Because they make business decisions based on financial information (we're �30 richer and jrtv is �30 poorer) rather than exclusively based on common sense.

Similarly, why do customers make transactions when they have 'insufficient funds' ?

[STAH]

Good point stevie which I fully support.

[Coobeastie]

Banks are very quick to jump on you if you make a mistake and charge you for it but if they make a mistake - nothing.

Just before christmas a cash point swallowed my card. I rang up and the bank cancelled one of my other cards belonging to a completely different account, they then eventually cancelled the correct card. Result I went about 3 weeks without having access to either of my accounts and all I got was a fob off letter.

[jason1980]

Banks charge a fee on insuffient funds because you are trying to make a transaction where it is your own responsibility to make sure there is funds available. I do disagree with these charges though because they use everyones money to trade and invest with overnight. However much you've paid in over the years they have used to trade with and profited from that money giving you back only what you've paid in. Cheques only take 1 day to clear, they use the balances on cheques to trade with also only 1 day after you've paid it in. Once they've played with it they give it back 2 days later. Banks make money in variety of ways using balances of money that they have in stock from what us consumers pay in - these charges are unnecessary. I also have had charges because a Direct Debit comes out on the 30th of the month, I paid money in early morning of the 30th of the month, but I got a charge because the banks clear direct debits at 2.00 am.

[stevie21]

jason1980 - cheques don't take one day to clear. Show us all a reliable source that says they do.

One way of looking at your "30th of the month" complaint is that if your phone rings at 2am and then you answer it at 9am, I wouldn't expect that you've reacted in time.
The same goes for your Direct Debit bouncing, although there's nothing to stop the bank checking your balance later in the day before making a final decision on whether or not to bounce it.

[jason1980]

steve:

heres a link about something similar: http://www.moneyforums.co.uk/ptopic3.html

and the important one: http://www.bized.ac.uk/dataserv/chron/news/2361.htm

I didn't make it clear that I am qualified in acountancy through the AAT and covered banking in great detail. The point I was making was that banks make money on the time delay of a cheque clearing. In other european countries the banks clear cheques after 1 day. In terms of the value a bank has in funds, the cheque value is added in 1 day but not added to the account holder. Like I said, Banks use our ordinary deposits to make huge profits which is why some charges are unnecessary.

[jason1980]

Also my "30th of the month" complaint is that if a direct debit comes out on the 30th and I pay money in on the 30th then it's still the 30th. I think a charge is necessary if I didn't pay money in before hand and including the 30th so a charge should be applied instantly on the 31st given that if I pay cash into my account on the 30th it has cleared into the account instantly. The direct debit comes out at 2am but money cant be paid in until 9.30am, the point is the direct debit is not for the 29th.