What would be a fair charge?

[hagenuk]

As my 'letters', automatically generated and signed by a computer, are then stored on disc whilst an email is sent out to me to alert me to its presence I can say that the total cost is a near 0p as makes no odds.

 

If your letter, automatically generated and signed by a computer, is then collated, folded and stuffed into an envelope which is put into a mailsorted sack for RM to collect, then the cost will not exceed 50p per item, including depreciation on the plant.

 

Don't get me wrong, I'm all for the bank recovering their costs, as long as those costs are the TRUE costs and not some figure plucked out of thin air.

Around ten years ago I worked for a company that used to print, stuff and sort statements, bills, invoices etc (not for the banks but for telco's and other companies with a larger customer base) and we used to charge £11.60 per thousand for printing and stuffing. The paper was £3.16 per thousand and the envelopes £13.16 per thousand, total £27.92 per thousand. These are actual figures from a customer who used us for around 20,000 pages per month so in fact the costs are somewhat higher as this was considered a small customer.

 

The £11.60 per thousand was a "service charge" that included receiving the customer data in an agreed format (disk, tape, optical etc.) formatting, collating, merging and printing. The printing was done on IBM laser printers capable of printing 140 sheets per minute and the sorting and stuffing was done using KERN multi-mailers that could sort, stuff and seal 7000 envelopes per hour.

 

As I mentioned, these costs were for what was considered a small customer so the prices were not as keen as they could be yet still the cost per finished envelope was less than 3p!

 

Postage was extra depending on how the customer wanted it sending but was at Royal Mail published rates.

 

I suggest it is also safe to assume that this process has become easier and therefore cheaper as technology in this area has advanced in the last ten years.

[hagenuk]

Just quickly going back to checking at the atm.

Karnevil- I agree to a point but if you as an individual are knowledgeable about banking(I'm not saying the opposite is the case), you would know that a cheque is calid for 6 months from the date of issue, and if not cashed then technically you have entered into a contract with shop/ company/ individual that it is funds available to you. The advice I have always given to people is not to destroy switchreceipts until they have cleared your account. So if I have £40 for example and I use £20.00 for switch and I check the balance immediately and it says I still have £40 surely I don't take out more than £20.

I'm not saying the charges are fair but financial knowledge is key to avoiding bank charges.

 

If only it were that simple then nobody would get charged, ever. But its not that simple and the banks deliberately exploit that fact. Not many of us have the time to constantly check our balances and simple errors are, by definition, easy to make and suddenly we are stung for charges that can quickly add up to hundreds of pounds.

 

An example. My wife cancelled three direct debits. Two are accepted but for some reason the third, for £85 gets paid. She writes a cheque for £17 which bounces. £38 charge. It gets represented and bounces again, a second £38 charge. Due to the £161 that is now missing from her account (2 x £38 and the original £85) a cheque for £414 is returned, again twice and again another £76 in charges is debited along with £28 for an unauthorised overdraft. So in the space of a few weeks £265 has been taken and two cheques have been unpaid.

 

In this instance we were able to recover it all due to the DD guarantee, but not without having to quote it verbatim to the manager, as the bank protested at first that it was not their fault and we would have to contact the DD originator to reclaim the £85 DD that was erroneously paid!

 

Now this was a bank error and we caught them red-handed so to speak but how many times has this happened and gone unnoticed? How many times have the banks attempted to pay things the day before, sometimes even hours before they know salaries get paid in? I do not expect you to condone much less admit this practice but we know it goes on. I know of a guy who got paid weekly, had worked at the same firm for over 20 years and banked with the same bank. You'd think they would know when he got paid, yet regular as clockwork, every Thursday he'd get a slew of returned items and he got paid on Friday. He was constantly battling to keep afloat. His account was suspiciously devoid of activity until the day before payday, funny that.

[hagenuk]

I think at present, if the figures we have speculated about are even remotely accurate, the refunds in relation to the profits are so small as to be immeasurable.

I remember reading some years ago an annual return for Sky and commenting at the time that this company turned over so much that, for convenience the financials were rounded off to the nearest £1 Million.

I am sure the banks do care about profits and do count every penny but less than £1.2 Million returned on profits of several billion pounds is insignificant and it will have to increase by a considerable amount before it becomes important enough for them to do anything about it.

Bear in mind also that the profit on these charges is made almost from thin air, there is no “cost of sales” involved in creating a charge for returning a DD for example or bouncing a cheque, particularly as many banks do not even write letters anymore.